Question

In: Operations Management

What are the organisational's macro environment and resources?

What are the organisational's macro environment and resources?

Solutions

Expert Solution

Organizational's macro environment is the environment in the economy itself that has an effect on how all business groups operate, perform, make decisions and form strategies simultaneously. It is quite dynamic implying that an organization has to constantly track its changes. It consists of external factors that affects an organization over which it doesn't have a control.

Following are the External factors-

a Economic factors can effect organization's levels of production and decision making process of customers. For example- interest rates, recession, inflation, taxes, demand/supply, etc.

b Demographic factors are age, education level, cultural characteristics, country, region, lifestyle, etc.

c Technological factors are related to skills and ability that are used in production as well as all the materials and technology that a particular product requires to be made. For example- engine performance & efficiency, automation, internet connectivity, etc.

d Natural and Physical factors are the resources available on earth which can be renewed like forests and agricultural products and which cannot like coal, minerals ,oil, etc. These are important for production. For example- climate change, pollution, weather,etc.

e Political and legal factors are really important for every organization to comply with for functioning smoothly worldwide. For example- employment law, copyright law, health & safety law, import/export law, etc.

f Social and cultural factors are those that are offered by the product of an organization that can have a strong impact on society like production needs to eliminate every practice that is hazardous to society. For example- religion and beliefs, conciousness about health issues, etc.

Organizational resources are all assets that an organization has available to use in the production process. These are combined and used to create finished products.

Types of Organizational resources are-

a Human resources are the employees who work for the organization.

b Monetary resources refers to the money that upper management uses to buy goods and services for the organization.

c Raw materials are the materials used to create products like flour, butter, sugar and eggs are the raw materials used to make baked goods.

d Capital resources refers to the machinery used in the process of manufacturing.


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