ACCA Study E-books available
ACCA Exam Study Text
ACCA Paper F1 - Exam Study Text - Accountant in Business
ACCA Paper F2 - Exam Study Text - Management Accounting
ACCA Paper F5 - Exam Study Text - Performance Management
ACCA Paper F9 - Exam Study Text - Financial Management
ACCA Paper P3 - Exam Study Text - Business Analysis
ACCA Practice Questions and Answers
ACCA Paper F1 - Practice Questions and Answers - Accountant in Business
ACCA Paper F2 - Practice Questions and Answers - Management Accounting
ACCA Paper F3 - Practice Questions and Answers - Financial Accounting
ACCA Paper F5 - Practice Questions and Answers Diagnostic Tests - Performance Management
ACCA Paper F9 - Practice Questions and Answers Diagnostic Tests - Financial Management
ACCA Paper P3 - Practice Questions and Answers - Business Analysis
ACCA Revision Mnemonics and Charts
ACCA Paper F5 - Revision Mnemonics and Charts - Performance Management
ACCA Paper F8 - Revision Mnemonics and Charts - Audit and Assurance (International)
ACCA Paper F9 - Revision Mnemonics and Charts - Financial Management
ACCA Paper P3 - Revision Mnemonics and Charts - Business Analysis
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Differences between Macro Economics and Micro economics
This is a question often asked by students studying ACCA Paper F1.
What is the business environment? The environment consists of those factors that can affect an organisation's operations and the work of the ACCA Accountant, but which its management have little or no power to influence or control. An organisation can be thought of as an open system which is influenced by a complex political, economic, social and technological structure of variables that can change. Many of these variables will bring threats and some will give rise to opportunities.
We see from this that an organisation’s business environment is the set of elements that affect the organisation, but are not controlled by it. Though clearly relevant to the organisation, they are regarded as falling outside its boundary (in other words, factors which are external to the organisation). Obviously, there are some factors within the organisation over which management have little control and some writers refer to these as forming part of the internal environment.
An organisation’s environment can be split into (a) micro-environment and (b) macro-environment depending on the business domain it stakes out for itself.
Macro-environment
Those components of the environment that affect many businesses in the economy as a whole and may potentially affect a particular organisation but whose relevance is not specific at a particular time. They are broad forces (PESTEL - political, economic, social, technology, ecology and legal). The effect of macro factors is usually less immediate and dynamic than direct ones.
Micro-environment
The micro-environment is that part of the business environment which is directly relevant to an industry or market and is therefore relevant for the organisation is achieving its goals.
It usually contains:
- customers (or usually known as market)
- competitors
- stakeholders
but depending on the organisation’s domain can include other factors.
So for example, a company, helped by ACCA specialists, may well develop a competitive strategy or a marketing strategy (which relate to micro-environmental factors) but is unlikely to pursue political or social strategies, which are more general, or macro.
The knowledge contained in this free ACCA study tip is examinable in the ACCA Paper F1. For more information and knowledge on ACCA F1, see the full list of ACCA E-books available from TonySurridge.
