What Are Macro Environmental Factors ?

Macro environment factors refer to all external uncontrollable forces that affect the decision-making, strategies and performance of any organization. Macro environment factors are often categorized using the acronym “PESTLE.” PESTLE stands for political, economic, social, technological and legal factors.

Organizational decisions are highly affected by developments in the legal and political environments. The legal and political macro environment comprises of government agencies and pressure groups that influence organizational operations, tax policies and the national and international laws that may affect the demand and supply chains.

The economic macro environment assesses the availability of purchasing power in an economy, which depends on the current prices, credit availability, comparative foreign exchange rates and business cycles. Economic macro environment factors also affect an organization’s ability to maintain a stable profit. Social macro environment is comprised of beliefs, values, moods, norms, gender and demographics of the population. Trends in the social environment influence the products a company manufactures and its target customers.

Technological macro environment factors affect the quality of goods and services offered by a company. New technologies that provide superior value to satisfying consumer needs stimulate economic and investment activities. Developments in the technological environment also enable an organization to stay modernized and ahead of the market curve.