PLACING ORGANISATIONS IN CONTEXT

When developing business plans and performance,factors that might influence decisions and actions needs to be considered.These factors are the micro and macro factors.Micro factors which are the things within the industry or business, includes finance,people,labour.The ability to cope with these factors will determine the level of influence affecting prices,costs and the ability to meet the needs of the customers.The five recognised forces that affect these aspect of business are-Direct competition,Bargaining power of suppliers,Bargaining power of customers,Threat of new entrants and Threat of subtitute products.These five forces helps us analyse the micro environment.

Macro factor are things that affect all business,they could be the government,taxes,economy or even currency or exchange rates.The government plays an important role in the macro factor affecting businesses.Privatisation which is the transfer of ownership of property or businesses from a public sector to a privately owned entity.It involves handing over control of public funds functions to private companies or organisations.

This act by the government could be an advantage as it promotes the development of private organisations by leveling the play field and ending subsidised competition from within.