Unit 2: Organization's Environment PDF

! ! ! ! ! UNIT!2!–!ORGANIZATION’S!ENVIRONMENT! UNIT 2: ORGANIZATION’S ENVIRONMENT! LEARNING OBJECTIVES Upon successful completion of this unit, you will be able to: 1. Describe the...

! ! ! ! ! UNIT!2!–!ORGANIZATION’S!ENVIRONMENT! UNIT 2: ORGANIZATION’S ENVIRONMENT! LEARNING OBJECTIVES Upon successful completion of this unit, you will be able to: 1. Describe the elements of the organization’s environment, 2. Explain international business environment of an organization, 3. Elaborate the role of business in relation to the economy, and 4. Discuss about economic development. INTRODUCTION ! The location influences business trades. Changes in climatic changes can affect the trade. The consumer reactions to particular offerings can also be an issue. Some environmental factors are: ► Geographical location, ► The climate and weather, ► Waste disposal laws, ► Energy consumption regulation, and ► People’s attitude towards the environment. There are many external factors other than the ones mentioned above. None of these factors are independent. They rely on each other. If you are wondering how you can conduct environmental analysis, here are 5 simple steps you could follow: 1. Understand all the environmental factors before moving to the next step. 2. Collect all the relevant information. 3. Identify the opportunities for your organization. 4. Recognize the threats your company faces. 5. Take action. It is true that industry factors have an impact on the company's performance. Environmental analysis is essential to determine what role certain factors play in your business. PESTEL or PESTLE analysis allows businesses to take a look at the external factors. Many organizations use these tools to project the growth of their company effectively. Factors of Organization’s Environment ***Objective 1 An organization’s macro environment consists of nonspecific aspects in the organization’s surroundings that have the potential to affect the organization’s strategies. When compared to a firm’s task environment, the impact of macro environmental variables is less direct and the organization has a more limited impact on these elements of the environment. Macro environmental variables include sociocultural, technological, political-legal, economic, and international variables. A firm considers these variables as part of its environmental scanning to better understand the threats and opportunities created by the variables and how strategic plans need to be adjusted so the firm can obtain and retain competitive advantage. The macro environment consists of forces that originate outside of an organization and generally cannot be altered by actions of the organization. In other words, a firm may be influenced by changes within this element of its environment, but cannot itself influence the environment. ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! Political Factor This factor is about how and to what degree a government intercedes in the industry or economy. Mostly all the influences that a government has on your business could be categorized here. This involve government policy, political stability or instability, corruption, foreign trade policy, tax policy, labor code, environmental act and trade restrictions. Likewise, the government may have a profound impact on a nation’s education system, infrastructure and health regulations. These are all factors that need to be taken into account when assessing the attractiveness of a potential market. Economic Factor Economic factor is determinant of a certain economy’s performance. Factors include economic growth, exchange rates, inflation rates, interest rates, disposable income of consumers and unemployment rates. These factors may have a direct or indirect long term impact on a company, since it affects the purchasing power of consumers and could possibly change demand/supply models in the economy. Consequently, it also affects the way companies price their products and services. Social Factor This represents the demographic characteristics, norms, customs and values of the population within which the organization operates. This includes population trends such as the population growth rate, age distribution, income distribution, career attitudes, safety emphasis, health consciousness, lifestyle attitudes and cultural barriers. These factors are especially important for marketers when targeting certain customers. In addition, it also says something about the local workforce and its willingness to work under certain conditions. Technological Factor This factor pertains to innovations in technology that may affect the operations of the industry and the market favorably or unfavorably. This refers to technology incentives, the level of innovation, automation, research and development (R&D) activity, technological change and the amount of technological awareness that a market possesses. These factors may influence decisions to enter or not enter certain industries, to launch or not launch certain products or to outsource production activities abroad. By knowing what is going on technology-wise, you may be able to prevent your company from spending a lot of money on developing a technology that would become obsolete very soon due to disruptive technological changes elsewhere. Environmental Factor Environmental factors have come to the forefront only relatively recently. They have become important due to the increasing scarcity of raw materials, pollution targets and carbon footprint targets set by governments. These factors include ecological and environmental aspects such as weather, climate, environmental offsets and climate change which may especially affect industries such as tourism, farming, agriculture and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer. This has led to many companies getting more and more involved in practices such as corporate social responsibility (CSR) and sustainability. ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! Legal Factor This factor may have some overlap with the political factors, they include more specific laws such as discrimination laws, antitrust laws, employment laws, consumer protection laws, copyright and patent laws, and health and safety laws. It is clear that companies need to know what is and what is not legal in order to trade successfully and ethically. If an organization trades globally this becomes especially tricky since each country has its own set of rules and regulations. In addition, you want to be aware of any potential changes in legislation and the impact it may have on your business in the future. Recommended is to have a legal advisor or attorney to help you with these kind of things. Full list of PESTEL factors: Political factors !! Government stability/instability !! Corruption level !! Tax policies !! Freedom of press !! Government regulation and deregulation !! Special tariffs !! Political action committees !! Government involvement in trade unions and agreements !! Competition regulation !! Voter participation rates !! Amount of government protests !! Defense expenditures !! Level of government subsidies !! Bilateral relationships !! Import-export regulation/restrictions !! Trade control !! Lobbying activities !! Size of government budgets Economic factors !! Growth rate !! Interest rate !! Inflation rate !! Exchange rate !! Availability of credit !! Level of disposable income !! Propensity of people to spend !! Federal government budget deficits !! Gross domestic product trend !! Unemployment trend !! Stock market trends !! Price fluctuations Social factors !! Population size and growth rate !! Birth rates !! Death rates !! Number of marriages !! Number of divorces !! Immigration and emigration rates !! Life expectancy rates !! Age distribution !! Wealth distribution !! Social classes ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! !! Per capita income !! Family size and structure !! Lifestyles !! Health consciousness !! Average disposable income !! Attitude towards government !! Attitude towards work !! Buying habits !! Ethical concerns !! Cultural norms and values !! Sex roles and distribution !! Religion and beliefs !! Racial equality !! Use of birth control !! Education level !! Minorities !! Crime levels !! Attitudes towards saving !! Attitude towards investing !! Attitudes towards retirement !! Attitudes towards leisure time !! Attitudes towards product quality !! Attitudes towards customer service !! Attitudes towards foreign people Technological factors !! Technology incentives !! Automation !! R&D activity !! Technological change !! Access to new technology !! Level of innovation !! Technological awareness !! Internet infrastructure !! Communication infrastructure !! Life cycle of technology Environmental factors !! Weather !! Climate !! Environmental policies !! Climate change !! Pressures from NGO’s !! Natural disasters !! Air and water pollution !! Recycling standards !! Attitudes towards green products !! Support for renewable energy Legal factors !! Discrimination laws !! Antitrust laws !! Employment laws !! Consumer protection laws !! Copyright and patent laws ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! !! Health and safety laws !! Education laws !! Consumer protection laws !! Data protection laws INTERNATIONAL BUSINESS ENVIRONMENT OF THE ORGANIZATION ***Objective 2 The international business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization that influences decision- making on resource use and capabilities. This includes the social, political, economic, regulatory, tax, cultural, legal, and technological environments. The political environment in a country influences the legislation and government rules and regulations under which a foreign firm operates. Every country in the world follows its own system of law and a foreign company operating within it has to abide by these laws for as long as it continues to operate there. The technological environment comprises factors related to the materials and machines used in manufacturing goods and services. The organization’s receptivity and willingness to adopt to new technology, as well as the willingness of its consumers to do likewise, influences decisions made in an organization. As firms have no control over the external environment, their success depends upon how well they adapt to it. A firm’s ability to design and adjust its internal variables to take advantage of opportunities offered by the external environment, and its ability to control threats posed by the same environment, determines its success. Economic factors exert huge impacts on firms working in an international business environment. The economic environment relates to all the factors that contribute to a country’s attractiveness for foreign businesses. ► Businesses rely on a predictable and stable mechanism. A monetary system that acknowledges countries’ and economies’ interdependence and that fosters growth, stability and fairness at a global level is important for prosperity, and the operation and growth of companies. ► Inflation, interest rates, and the borrowing costs of companies also contribute to a country’s attractiveness. If a country has a high rate of inflation, its central banks will raise the interest rate, which increases the cost of borrowing for firms. High inflation also makes the value of the revenue in domestic currency fall, and this exposes firms to foreign exchange risks. It is even worse if firms produce in countries of high inflation and then sell products to countries of low inflation, since the input costs are on the rise while the revenue stays stable. ► Absolute purchasing power parity posits that the exchange rate between two countries will be identical to the ratio of the price levels for those two countries. This concept is derived from a basic idea known as the law of one price, which states that the real price of a good must be the same across all countries. As the currency of a country depreciates, its competitiveness is improved since its goods are cheaper than other countries’, helping companies export more. ► Relative purchasing power parity (PPP) is an economic theory used to determine the relative value of currencies, estimating the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to (or on par with) each currency’s purchasing power. It asks how much money would be needed to purchase the same ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! goods and services in two countries, and uses that to calculate an implicit foreign exchange rate. PPP rates facilitate international comparisons of income, as market exchange rates are often volatile; affected by political and financial factors that do not lead to immediate changes in income, and that tend to systematically understate the standard of living in poor countries. Another interpretation is that the difference in the rate of change in prices at home and abroad—the difference in the inflation rates—is equal to the percentage depreciation or appreciation of the exchange rate so that the competitiveness of one country could be maintained. Purchasing power parity (PPP). Purchasing power parity (PPP) is an economic technique used when attempting to determine the relative values of two currencies. It is useful because often the amount of goods a currency can purchase within two nations varies drastically, based on availability of goods, demand for the goods, and a number of other, difficult-to-determine factors. PPP solves this problem by calculating the price of a specific item so that the price is the same when expressed in two different currencies. The equation is stated as S = P1 ÷ P2 where S is equal to the exchange rate of Currency 1 to Currency 2, P1 is equal to the price of a specific item in Currency 1, and P2 equals the price of the same item in Currency 2. Primary Uses One of the most common uses of PPP is in lessening the misleading effects of shifts in a national currency. This is particularly an issue when calculating a nation’s Gross Domestic Product (GDP), which is the market value of all services and goods produced by a country in a specific amount of time. For example, if the riel falls in value to 80% of its value on the US dollar, the GDP as expressed in US dollars will also drop to 80%. There may be long-term effects of using the PPP technique as well. For example, a large retailer may use the equation to find that products can be purchased cheaper in a foreign country. If enough products are purchased at the lower price, over time it may have enough of an impact to increase the price of that product in the foreign country. At the same time, the country that was selling the product at the higher rate may decrease prices once demand slows. The idea behind long-term PPP is that the two countries will eventually offer the same product for the same price, despite the difference in currencies. Disadvantages. Purchasing power parity is, of course, an imperfect device for determining things such as GDP, as the exchange rate will vary based on the basket item used for the index. This effect is lessened by looking at a large sample of commodities, rather than one or two, but this simply minimizes the problem rather than eliminating it entirely. It is also worth noting that PPP lumps items together into broad ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! classes, not taking into account things such as quality a hat is a hat is a hat, and its value in the index remains static, even though a shoddy hat’s value on the international market would be much lower than a well-made hat’s value. ROLE OF BUSINESS TO THE ECONOMY ***Objective 3 Business is hugely important in a country’s economy because it is the main economic engine for the country. Businesses are a very important part of the circular flow of any market economy. They buy resources from households in the resource market and sell to households in the product market. This makes them indispensable to the economy. Businesses also allow the economy to work more efficiently. When businesses compete with one another, they improve their efficiency and help the economy grow. They also help the economy grow through innovations of various sorts. No market economy can thrive without businesses. E The economic growth of a country is produced by business. Business provides services, goods and incomes for both, employees and business holders. The development of a country is sustained by multinational corporations, medium and small sized businesses. This development is usually perceived as being supported by the multinational corporations, but mostly the family businesses and individual entrepreneurs are the greatest contributors to this development. While small size, local businesses are of great importance in the development of a country, offering an income to the majority of people, the multinational corporations are of great importance in the global economy. Many multinational corporations rely on local small business through outsourcing and not all small businesses remain at this level. They could grow and while growing, the local economy is stimulated, because the headquarter of a company which has developed, will not change the location and community. Economic Environment Defined The economic environment consists of external factors in a business’ market and the broader economy that can influence a business. You can divide the economic environment into the microeconomic environment, which affects business decision making - such as individual actions of firms and consumers - and the macroeconomic environment, which affects an entire economy and all of its participants. Many economic factors act as external constraints on your business, which means that you have little, if any, control over them. Let’s take a look at both of these broad factors in more detail. Macroeconomic influences are broad economic factors that either directly or indirectly affect the entire economy and all of its participants, including your business. These factors include such things as: ► Interest rates ► Taxes ► Inflation ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! ► Currency exchange rates ► Consumer discretionary income ► Savings rates ► Consumer confidence levels ► Unemployment rate ► Recession Microeconomic factors influence how your business will make decisions. Unlike macroeconomic factors, these factors are far less broad in scope and do not necessarily affect the entire economy as a whole. Microeconomic factors influencing a business include: ► Market size ► Demand ► Supply ► Competitors ► Suppliers ► Distribution chain, such as retailer stores Importance of Small Business in the Economy ! As we all know that small firms are important for the economy. ! Small businesses employees’ majority of the workforce in any country. ! Every business starts small. ! Small businesses are flexible and respond easily to changes in demand. ! Small firms often cater to local demands. ! In difficult economic times, such as a recession, small business can be an important source of providing employment. ! Small firms provide competition to larger firms through providing customized goods and services. ! Small firms provide niche products and services which a larger firm might overlook. ECONOMIC DEVELOPMENT ***Objective 4 Economic development involves allocating a community’s resources, such as land and capital, to encourage economic growth and increase wealth. This can include adding jobs, increasing business development, and building necessary infrastructure. Innovation, competition, and developing partnerships are among the goals of development efforts on local, national, and global levels. While economic development can focus on the local community, it is different from community development. It seeks to enhance the wealth of a community and can provide the stimulus and money needed for community development. Community development seeks to improve the aesthetics of the community and institute improvements that make it more attractive and enjoyable for residents and visitors. One of the focuses of economic development is to reach out to existing businesses. This can include using fiscal intervention, such as tax breaks, to encourage existing businesses to hire more workers and help spur job growth. Another concern of development officials is the need to retain existing employers. Expanding the business base is also a goal of development professionals. Offers including local, county, or state owned land at reduced rates and tax incentives may provide the incentive necessary for businesses to expand or relocate to the area. Local officials may work with both state and regional chambers of commerce to attract new business. ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! Creating an environment that can provide fiscal stability within a community or region is another goal. Working together, business expansion, retention, and growth help provide the necessary tax revenue for important infrastructure development and improvement. This infrastructure development, such as highways and bridges, can help attract business development in the future and encourage existing businesses to stay. Economic development also encourages entrepreneurship and supports emerging industries. This can be accomplished through the use of private and public resources and investments. Groups specifically assembled to help entrepreneurs plan, start, and grow a new business are an extension of local, state, and national programs, efforts, and ideals. Other efforts of development professionals are aimed at creating a sustainable economic environment. This includes diversifying the types of corporations and businesses within the local, state, or national economy. Another aspect is helping local businesses promote products and services on a larger scale. This can contribute to an increase in sales, profits, and tax revenues. It also helps develop a sense of appreciation and mutual respect between corporations and development officials. In general, economic development is usually the focus of federal, state, and local governments to improve our standard of living through the creation of jobs, the support of innovation and new ideas, the creation of higher wealth, and the creation of an overall better quality of life. Economic development is often defined by others based on what it is trying to accomplish. Many times these objectives include building or improving infrastructure (such as roads, bridges, etc.), improving our education system through new schools, enhancing our public safety (fire and police service), or incentivizing new businesses to open a location in a community. Economic development often is categorized into the following three major areas: ► Governments working on big economic objectives such as creating jobs or growing an economy. These initiatives can be accomplished through written laws, industries’ regulations, and tax incentives or collections. ► Programs that provide infrastructure and services such as bigger highways, community parks, new school programs and facilities, public libraries or swimming pools, new hospitals and crime prevention initiatives. ► Job creation and business retention through workforce development programs to help people get the needed skills and education they need. This also includes small business development programs that are geared to help entrepreneurs get financing or network with other small businesses. ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! There are significant differences between economic growth and economic development. The term “economic growth” refers to the increase (or growth) of a specific measure such as real national income, gross domestic product, or per capita income. National income or product is commonly expressed in terms of a measure of the aggregate value-added output of the domestic economy called gross domestic product (GDP). When the GDP of a nation rises economists refer to it as economic growth. The term “economic development,” on the other hand, implies much more. It typically refers to improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates. GDP is a specific measure of economic welfare that does not take into account important aspects such as leisure time, environmental quality, freedom, or social justice. Economic growth of any specific measure is not a sufficient definition of economic development. ! Local Development The term “economic development” is often used in a regional sense as well (e.g., a mayor might say that “we need to promote the economic development of our city”). In this sense, economic development focuses on the recruitment of business operations to a region, assisting in the expansion or retention of business operations within a region or assisting in the start-up of new businesses within a region. In addition to economic models, the needs of constituency groups guide economic developer’s actions. For example, a local economic developer working out of a mayor’s office may act towards decreasing unemployment by attracting businesses with large labor needs. The economic developer working for the chamber of commerce dominated by banks, real estate agents and utilities will recruit manufacturers with large capital investments (steel and chemical plants). The economic developer working for the state manufacturers association will lobby for more workforce training money. The economic developer working for a university will concentrate on business start-ups, specifically those based on intellectual property developed by the university (biotech). In its broadest sense, economic development encompasses three major areas: o! Policies that governments undertake to meet broad economic objectives such as price stability, high employment, expanded tax base, and sustainable growth. Such efforts include monetary and fiscal policies, regulation of financial institutions, trade, and tax policies. o! Policies and programs to provide infrastructure and services such as highways, parks, affordable housing, crime prevention, and educational programs and projects. o! Policies and programs explicitly directed at job creation and retention through specific efforts in business finance, marketing, neighborhood development, small business start-up and ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! development, business retention and expansion, technology transfer, workforce training and real estate development. This third category is a primary focus of economic development professionals. ! Economic Developers Economic development, which is thus essentially economics on a social level, has evolved into a professional industry of highly specialized practitioners. The practitioners have two key roles: one is to provide leadership in policy-making, and the other is to administer policy, programs, and projects. Economic development practitioners generally work in public offices on the state, regional, or municipal level, or in public- private partnerships organizations that may be partially funded by local, regional, state, or federal tax money. These economic development organizations (EDOs) function as individual entities and in some cases as departments of local governments. Their role is to seek out new economic opportunities and retain their existing business wealth. Contributors or Membership in economic development represents the entire range of the profession ranging from regional, state, local, rural, urban, and international economic development organizations, as well as chambers of commerce, technology development agencies, utility companies, educational institutions, consultants and redevelopment authorities. There is intense competition between communities, states, and nations for new economic development projects in today’s globalized world, and the struggle to attract and retain business is further intensified by the use of many variations of economic incentives to the potential business. There is significant attention placed on the various activities undertaken by economic development organizations to help them compete and sustain vibrant communities. Additionally, the use of community profiling tools and database templates to measure community assets versus other communities is also an important aspect of economic development. Job creation, economic output, and increase in taxable basis are the most common measurement tools. When considering measurement, too much emphasis has been placed on economic developers for “not creating jobs.” However, the reality is that economic developers do not typically create jobs, but facilitate the process for existing businesses and start-ups to do so. ! Top 10 Emerging & Most In-Demand Jobs in the Philippines 2020 1. Data Scientist 2. Application Development Analyst 3. Back End Developer 4. Full Stack Engineer 5. Sales Development Representative 6. Marketing Specialist 7. Recruitment Specialist 8. Administration Manager 9. IT Consultant 10. Accountant Therefore, the economic developer must make sure that there are sufficient economic and community development programs in place to assist the businesses achieve their goals. Those types of programs are usually policy- created and can be local, regional, statewide and national in nature. ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! UNIT SUMMARY The environmental factors of the organization involve better understanding of the threats and opportunities variables and how the plan of action is addressed to obtain and retain competitive advantage. The environmental aspect includes variables, such as sociocultural, technological, political- legal, economic, and international. According to the most common type of analysis, the PESTLE analysis has six elements that a business must be aware of: political, economic, social, technological, legal and environmental. Economic and legal factors are sometimes grouped together, giving five broad elements of the business environment. The international business environment comprises different countries with factors relating to the home environment of the organization. The decision-making on resources management includes social, political, economic, regulatory tax, cultural, legal, and technological environment. The term economic environment refers to all the external economic factors that influence buying habits of consumers and businesses and therefore affect the performance of a company. These factors are often beyond a company’s control, and may be either large-scale (macro) or small-scale (micro). Macro factors include: ! Employment/unemployment ! Income ! Inflation ! Interest rates ! Tax rates ! Currency exchange rate ! Saving rates ! Consumer confidence levels ! Recessions Micro factors include: ! The size of the available market ! Demand for the company’s products or services ! Competition ! Availability and quality of suppliers ! The reliability of the company’s distribution chain (i.e., how it gets products to customers) The role of business to the economy is important for the reason that it is the main economic engine for the country. Business improves through business competitions. The economic growth of a country is produced by business. Business gives services, goods and income to employees and business holders. The economic development involves land and capital for economic growth. Capital is the lifeblood of every business. Finance relates to money. A firm needs adequate funds to meet its working capital and fixed capital requirements. Jobs, business development, infrastructure, innovation, competition, and partnerships are the goals of development effort on local, national, and international. Community development increases the wealth of a community. The significant difference of economic growth from economic development is the growth of national income, gross domestic product, or per capita income. On the other hand, economic development is the improvement in various indicators such as literacy rates, life expectancy, and poverty rates. ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! STUDY QUESTIONS 1.! Define Contingency Theory. 2.! Describe a Leadership of Contingency Theory. 3.! Explain how decision becomes effective in Contingency Theory. 4.! What are the internal and external factors that may lead to the fall or success of the organization? UNIT!2!A!!ORGANIZATION’S!ENVIRONMENTT! 5.! Explain the Labor Code of the Philippines (Presidential Decree No. 442). 6.! Provide at least one (1) example for each factor: political factor, economic factor, social factor, and technological factor. 7.! What are the positive and negative factors of an organization? Identify the method used in determining the factors. 8.! Make your own SWOT and PEST analysis on the IT business that you will be creating. 9.! Why do we need to understand the economic development of our country? 10.! Explain the international business environment and its factors. ! KEYWORDS Business Cycle is!the!upward!and!downward!movements!of!levels!of!GDP!(gross!domestic!product)! and!refers!to!the!period!of!expansions!and!contractions!in!the!level!of!economic!activities!(business! fluctuations)!around!a!longAterm!growth!trend.! Demand is!the!utility!for!a!good!or!service!of!an!economic!agent,!relative!to!his/her!income.! ! Economic System is!a!system!of!production!and!exchange!of!goods!and!services!as!well!as!allocation! of!resources!in!a!society.! ! Infrastructure refers!to!the!fundamental!facilities!and!systems!serving!a!country,!city,!or!area,! including!the!services!and!facilities!necessary!for!its!economy!to!function.! ! Macro Environment is!the!conditions!that!exist!in!the!economy!as!a!whole,!rather!than!in!a!particular! sector!or!region.! Organization is!an!entity!comprising!multiple!people,!such!as!an!institution!or!an!association!that!has!a! collective!goal!and!is!linked!to!an!external!environment.! ! ! ! ! ! ! ! ! ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! IS!ORCO/by:!Cristine!V.!Redoblo,!PhD/Academic!Year!2020A2021!