BSTD Grade 10 Week 6 Macro Environment

GUATENG BUSINESS STUDIES GRADE 10 NOTES MACRO ENVIRONMENT CHAPTER 4
BUSINESS STUDIES
GRADE 10
TERM ONE
CHAPTER FOUR
WEEK 6
MACRO ENVIRONMENT
2021
1
TABLE OF CONTENTS
TOPICS PAGES
Exam guideline for the macro-environment 3
Meaning of the macro environment 4
Features of the macro environment 4
Reasons why the macro environment can be a challenge to 4
businesses
Description of the features of the macro environment and challenges 5
This chapter consists of 6 pages
2
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT

PURPOSES
 Define/Elaborate on the meaning of the macro-environment.
 Briefly explain the reasons why the macro environment can be a challenge to
businesses.
 Define/Give practical examples of each component/feature of the macro environment
 Briefly explain the reason why each component/feature poses a challenge to
businesses.
 Identify the components of the macro environment from given
scenarios/statements/case studies/cartoons/pictures.
 Conduct research on the impact of the macro environment on businesses
(Enrichment).
1 Macro environment/External environment
Meaning of the macro environment/External environment

 The micro-environment includes all the forces/events and circumstances that affects
the business and its market environment.
 This is the environment that is located outside the business.
 The business cannot control this environment but it can influence it.
 It is also known as the external environment
 The macro environment is always developing and changing
 Businesses have no control over this environment as it poses challenges to
businesses.
2 Features the macro environment

 Physical/Natural environment
 Economic environment
 Social, cultural and demographic environment
 Technological environment
 Legal environment and political environment
 International /Global environment
 Institutional environment
3 Reasons why the macro environment can be a challenge to businesses

 The macro environment is always developing and changing.
 Management in businesses have no control over the macro environment.
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4 Description of the features of the macro-environment and challenges posed by each feature
Features Description Challenges to businesses
Physical/Natural  These are forces that are present in the natural  The physical location of a business has a large effect on
environment environment such as the natural the success of the business.
resources/pollution/ increased cost of energy/  Manufacturing businesses dump their waste materials that
infrastructure. impact negatively on the physical environment.
 Businesses that use raw material to transform  The awareness of pollution and environmental damage
them into useful products such as clothing and provide new challenges for businesses.
electricity need nature for their survival.  Some natural resources are scarce and expensive e.g.
sources of energy are expensive.
 The scarcity of natural resources has a negative impact on
the production costs and results in high prices of goods
and services.
Economic  The economic environment includes all those  Economic changes affect business, if the rand becomes
/Environment factors that affect financial matters e.g. interest weaker, businesses are more likely to be able to export
rates/inflation/business cycle etc. product successfully.
 Interest rates are the charges people and  If interest rates increase, it means the business will pay
businesses pay for the cost of borrowing money. more monthly instalments to the bank for the loan taken.
 A high inflation will mean that consumers will have less
money to spend on goods/services.
 Inflation refers to the general increase in the prices
of goods and services in the economy.  If taxation goes up, businesses will be charged more on
their profit, and people will have less money to spend on
buying goods and services.
 If exchange rates influence trade international trade as it
becomes expensive to buy raw materials and machinery
from overseas.
Social, cultural  The social environment involves people.  Social issues such as poverty, HIV/Aids, unemployment,
and demographic  The cultural and social environment can be defined low levels of literacy and crime can affect consumers’
environment as the sum total of the languages /values/cultural spending, the productivity of the employees and the
norms/preferences/religions and beliefs. profitability of the business.
 The demographic environment refers to the  Social and cultural diversity have the potential to create
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composition of a country’s inhabitants e.g. their conflict in the workplace.

age/residential areas/skill level/income level etc.  Employees from different cultural backgrounds may have
different cultural norms/preferences/beliefs etc.
 South Africa has a large number of people who are poorly
educated and unskilled. This means that businesses may
have few customers.
Technological  These factors include the development of new  Many businesses may not be able to succeed without
environment technological products and services. internet connectivity.
 The rise of information technology such computers  The availability of online shopping decreased the demand
and communication technology allows for a rapid for some products from conventional street stores and
flow of large amounts of digital information/ ICT. service businesses.
 IT systems can be hacked by
fraudsters.
Legal  The legal component of the macro- environment  An unstable government and poor relationship between
environment and consists of the legislation that has been passed. the government and the business creates a negative
political  The government plays a large role in the political environment.
environment development of policies and legal frameworks.  Some political decisions such as government levies, tax,
 The legal system through the courts, has power to interest rates and inflation influence businesses.
oversee: employment, tax, trade mark rights,  Changes in government salaries can have an impact on
patent rights, intellectual property. the spending patterns of consumers.
 Government employs a large number of  Businesses are affected by legislation such as the
consumers. National Credit Act, Consumer Protection Act,
Employment Equity Act, Basic Conditions of Employment
Act etc.
International  Globalisation refers to an increase in trade and  Globalisation result in increased competition from
/Global investment between countries. businesses around the world which sell their goods to
environment South Africa.
 Businesses are expected to understand the cultures of
foreign people.
Institutional  This refers to the three spheres of government e.g.  The provincial government has an indirect impact on
environment local, provincial and national government. businesses through its role in providing services such as
health, housing and education.
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BSTD Grade 10 Week 6 Macro Environment

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GUATENG BUSINESS STUDIES GRADE 10 NOTES MACRO ENVIRONMENT CHAPTER 4

This chapter consists of 6 pages

CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT

1 Macro environment/External environment

Meaning of the macro environment/External environment

2 Features the macro environment

3 Reasons why the macro environment can be a challenge to businesses

composition of a country’s inhabitants e.g. their conflict in the workplace.

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