Macro Environment Challenges Essay Sample

Macro Environment Challenges Essay for UAE Students

The macro-environment talks about the economy of any country as a whole rather than focusing on a single sector. It even briefs one about the hidden problems of any economy. Indeed macro-environment always impacts the decisions made in business in a greater context. The macro-environment can strongly influence investment, lending, and expenditures. Note that it includes fiscal policies, GDP and inflation also it is intimately associated with the cycles of business.

Brief on the Factors of macro environment impacting business

Talking about factors here we have discussed them in detail

The socio-cultural factor

The culture, as well as social ethics, play a dominant character in determining the operation of any company. These two factors are very much accountable for the growth and success the company achieves in the long run.

Example of the cultural factor

Like you can see that in many countries, the retirement age limit is no more confined to 60 years as people are working at a stretch of 5 to 10 years even after 60.

One more thing companies need to deter any kind of business practice that may jeopardize society.

Other matters that need consideration are the following

  • Habits of purchasing
  • Level of education
  • Knowledge about the Heath problems
  • Size and structure of any family
  • Rate of population growth
  • Rate of immigration and migration
  • Expectancy of life
  • SWOT


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SWOT in brief –

Well, when you think of the term Swot then obviously you will have to consider the terms like Strengths, weakness, opportunity, and threats. The first two impact the internal ambience of anti-company, but the latter two are associated with external business ambience.

So here we will talk about the opportunities that mean the favourable factors that a company can enjoy to rule the market

Talking about threats can be anything like political, cultural, or economic. As per experts, it is worth trying to control threats rather than addressing the issue that can benefit the company more.

Technological factor

Technology does not mean enhancement in the computer or IT service. Rather it includes the entire process of manufacturing, products, and robust techniques used to escalate their present being. Now companies with outdated technology need to improvise that because it will benefit the firm.

Otherwise, backdated technology might appear as a threat. It also includes what type of measures you are taking to protect your equipment and tools. Below are the listed technological factors

  • Automated technology
  • Three-dimensional technology
  • Internet connectivity
  • Power and speed of the computer
  • Security like cryptography
  • Wireless connection
  • Installed camera

Economic factor

There is a direct correlation between the market economy and the business. Now the business has to rely on the economy for its production. Later the business sells that very particular service and products to that market only. On the whole, it considers both the production and decisions taken up by the customers.

In such a scenario, the condition of the economic market matters a lot. It is because if there is inflation then the market will see a rise in its profit, interest, and entry of capital. On the other hand, if the market goes through deflation, things might suffer a downfall. Factors included here are

  • Tax
  • Demand and supply
  • Demography

Physical and ecological factor

Any transformation in the physical ambience of nature can affect the business strongly. Like if there is less rainfall in specific regions, then the crops will get devastated. On the whole, it impacts the production and the business has to suffer.

Similarly, ecological factors also influence business and its production. In that scenario, you can consider global warming. Note the other physical and ecological factors are stated below.

  • Change in the climate
  • Pollution level
  • Weather change
  • Presence of renewable and nonrenewable wealth
  • Environmental regulating laws


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Legal and Political factors

Speaking of legal factors it mainly talks about judgments, regulations, and laws. These altogether influence the business environment and its functioning.

The political factor highlights the judiciary, executive, and legislature as the primary branches. It also showcases the particular ideologies a political party in authority holds. The factors are listed here

  • Law of copyright,
  • Law related to employment
  • Law on discrimination
  • Safety and health law
  • Law on export and import

Challenges faced by the macro environment

Some basic challenges faced by the macro-environment are

  • Change in level of income
  • Change in politely and legal environment
  • Challenges about globalization
  • Restrictions on labor
  • Change in the socio-economic sphere

How can businesses fight those challenges?

  • Management of information
  • Responding positively by making the right strategy
  • Having flexibility in an organization
  • Introducing cutting edge services and products
  • Inflation hedging
  • Introducing programs on social and environmental upliftment
  • Networking to build relationships with customers
  • Sharing resources by eating into a relationship with other companies.

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