Differences Between Micro and Macro Environment

Differences Between Micro and Macro Environment

Macro Environment is an outside issue that a company cannot manage, that has a direct persuade on the company’s decision making and strategies. Mainly the ‘big picture’ of the market, thus helps puts the analysis into context. Micro Environment is an inside issue within a business that has a repercussion on performance and decision making, however, a business can always manipulate these factors.

The following are the major difference between Micro (Internal) and Macro (External) Environment:

Definition

  • Micro-environment refers to the environment which is in direct contact with the business organization and can influence the usual activities of business direct away. It is defined as the nearby environment, under which the firm operates.
  • The common environment within the economy that influences the working, performance, decision making and policy of all business groups at a similar time is known as Macro Environment. It refers to the common environment that can influence the working of all business enterprises.

Area

The microenvironment is also known as the internal environment while the macro environment is known as the external environment. Micro-environmental area is little and confined within a firm’s internal factors.

A macro environmental area is bigger and broadly spread and includes both firms’ internal and external factors.

Effect

  • Micro Environment does affect the specific group or the company directly.
  • Macro Environment effects each and every of the business entity, not any specific.

Elements

  • Micro Environment elements are Competitors, suppliers, organization itself, market, intermediaries.
  • Macro Environment elements are Population and Demographic, Economic, Socio-Cultural, Technological, Legal & Political and Environmental.

Business process

Micro-environment influences the organization directly. It includes suppliers that contract straight or obliquely, consumers and customers, and other local stakeholders.

The macro environment includes all factors that can manipulate an organization, but that is out of their straight control. A company does not usually manipulate any laws.  It is constantly changing, and the company needs to be stretchy to adjust.

Some other Differences are –

  1. Micro Environment is the environment which is in immediate contact with the firm. The environment which is not specific to a particular firm but has the ability to influence the working of all the business groups are known as Macro Environment.
  2. Micro Environment is also known as the internal environment of business, whereas the Macro Environment is the external environment.
  3. The factors of the Micro Environment affect the particular business only, but the Macro Environmental factors affect all the business entities.
  4. The Micro Environmental factors are controllable by the business, however, the Macro Environmental variables are uncontrollable.
  5. The elements of the Micro Environment affect directly and regularly to the firm which is just opposite in case of the Macro Environment.
  6. The study of Micro Environment is described as COSMIC analysis. Conversely, PESTLE Analysis is a study of the Macro Environment.

Macro and micro-environments play a significant role in environmental scanning. Environmental scanning is then a vital constituent of global environmental analysis. In summary, the macro environment is involved with the industries, companies, markets, clients, and competitors, while the microenvironment can be represented by the suppliers, competitors, and clients.

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