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The Macro- Environment

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by

Musanshi Chitondo

on 5 September 2013

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Transcript of The Macro- Environment

The Macro- Environment
What is the Macro-environment?
*PESTLE*
Political Environment
Definition
: Government actions which affects the operations of a company or business.

These actions may be on local, regional, national or international level.
Business owners and managers pay close attention to the political environment to gauge how government actions will affect their company (Gans, King, Stonecash and Mankiw, 2012).
Influence on political environment is exerted by 3 political institutions i.e. Judiciary, Executive and legislature.
Conclusion
The Macro-environment is a crucial aspect of any firm that wishes to enter a foreign market
Undertaking environmental scanning of the macro-environment helps firm anticipate risks and uncertainty
Anticipating such aspects helps gives firm a competitive advantage as they operate effectively and efficiently.
Presented by:
Musanshi k Chitondo - 22384065
Tumeyo Chipungu - 22893652
Michael G Pepala - 23639113
John Mutama - 23126698

Political
Economic
Socio-cultural
Technological
Legal
Fiji
HOW DID THE POLITICAL ENVIRONMENT HAVE AN IMPACT ON INTERNATIONAL BUSINESSES IN FIJI AND/OR POTENTIAL INVESTORS?
• Respect for the rule of law has declined notably


Refer to figure (a)


• Lack of proper constitution threatens lives of foreign residents
CAUSES OF POLITICAL INSTABILITY IN FIJI
• Ethnic tensions
• Corruption
• National economic decline
• Fiscal mismanagement

Ethnic tension example:

“I-Taukei people cannot always think they can lead the nation because they own the land, it is not right because everyone is treated equally.” Bainimarama

Economic Environment
There are different economic systems that exist:

• Market economy
• Command economy




Economic indicators include:
• Per Capita Income or GDP
• Population
• Gross National Income
• Interest rates

Inflation
• Rise in overall price level
• High inflation will cause high interest rates

Labour Productivity
• Change in technology
• Change in education

Legal Environment
Legal - deals with all the legal issues any company needs when opening a company domestically or across borders
There are 3 main laws that are usually part of some of the legal firm work any company planning cross border or domestic production or operations which are:


LABOUR/EMPLOYEMENT LAWS
: are laws that mediate the relationship between workers, employers, trade unions and the government.

SAFETY LAWS
: is an area concerned with protecting the safety, health and welfare of people engaged in work or employment

TAX LAWS
: tax laws and government tariffs


LABOUR/EMPLOYMENT LAWS
: jobs only privileged to the indigenous people

SAFETY LAWS
: coups and increase in crime and military intervention in private companies

TAX LAWS
: allowance for low government tariffs

EXTERNAL EXAMPLES
• ZIMBABWE'S BUSINESS LAW ON FOREIGN COMPANIES
• ZAMBIAN EMPLOYMENT AND LABOUR LAW
• XENOPHOBIA IN SOUTH AFRICA

Social-cultural Environment
Refers to the immediate physical and social setting in which people live or in which something happens or develops.
It includes the culture that the individual was educated or lives in, and the people and institutions with whom they interact
Starbucks

Australia
Recommendations
• Allow for reformation of electoral laws and the constitution in such a way that they don’t discriminate any ethnic group.Allow for freedom of speech and democracy

• The Fijian government should have clearly stated whether or not there should be a privilege for employment for the indo and indigenous Fijians


•The Fijian government should have Created a balance between the indigenous Fijians and the indo Fijians in order to avoid the violence that generated from it by allowing the two sides to have a more diplomatic way to deal with their differences
•The government should have provided more security and protection to the foreigners and company expatriates who add a lot to their economy through tourism
Refer to figure (b)
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