Explain how the following sub-environments of the macro environment impact an organization/business: 1

1. Economic Environment

Two economic factors affect business models: 1) demand and 2) supply. Demand is how able and willing a consumer is of buying what a business offers, while supply is the ability of a business to meet consumer needs. Money in circulation directs consumer demand. On the other hand, banks determine how much businesses and consumers can borrow.

Another key economic aspect that affects a business is the rate of income and employment found in start-up companies. The rate of employment regulates demand and the purchasing power of individuals.

2. Technological Environment

Technology as an important tool for improving business operations, especially when it comes to developing digital marketing strategies through which companies can sell their products and services. When an employee is more efficient, he or she is more productive, and when a business is more connected with its customers, the more chance it has of building a strong customer loyalty base.

3. Socio-Cultural Environment

Socio-cultural factors include social attitudes, beliefs, educational opportunities, legal structures and political ideologies. Here, the focus is on family members, friends, colleagues and the media, which can affect individuals' attitudes, choices, interests and opinions. Cultural factors that affect business include fashion and lifestyle trends, often inspired by blogs and other forms of social media. These can lead to an increase in demand for certain goods and services.

4. International Environment

Businesses interested in taking their products and services to the international level typically conduct research as to which countries will offer the most favorable labor conditions opportunities for profit, taking into consideration factors like inflation, interest, investment and savings rates. Governments can help international businesses by enacting polices that promote globalization.