business environment

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MODULE 2MODULE 2

Economic Perspective and Business Environment

Summary of Module Content:

This module has considered two key interests, namely the economy and

the business environment. In the first part, the economy was viewed

from two perspectives, from a microeconomic perspective and

macroeconomic perspective. While the microeconomic perspective is

centred on consumers and businesses, competition and supply and

demand, the macroeconomic perspective involves fiscal and monetary

policy as means to effect a change in the economy.

The second part of the module focused on three types of business

environment: micro, meso, and macro. Again, these are different views

on the same issue – the business environment. This module introduced

the first tools for environmental scanning; PESTLE analysis, which is used

to analyse macroeconomic forces that cannot be controlled by the

business, and industry analysis, which looks at forces, and factors that

shape the industry and affect competitiveness within it.

It is important to understand which factors managers can control and

which ones they can only monitor. Going forward, students should pay

special attention to which type of business environment they are

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analysing to choose the correct method of analysis.