Macro and Micro Economic Factors



Macro and Micro Economic Factors

Various public and independent research institutes as well as researchers have created and used different methodologies and tools to study local competitiveness issues. However, most of these studies focus on economic factors of place competitiveness; other areas such as social, historical, cultural, legal, political, environmental etc. aspects receive no or minor attention (Philips, 2008). The research aim is to go by referring to basic theories and concepts of plant's competitiveness indicating the process of formation of plant's activity's competitiveness and suggesting the key factors and elements of micro and macro environment that affect the competitiveness of a plant's operation.

Diversity of the methodologies and narrowness of the scope of the studies make the understanding, comparison and management local competitiveness factors in different businesses very complicated (Huffington, 2009). Although the importance of competitiveness of business economies is widely acknowledged, still there is a big lack of efforts to create methodologies and techniques to analyze the subject.

The environment is a complex combination of the economic system, political system, legal restraints, society, industry, labor relations, customer expectations, markets, competition, technology, culture, history, infrastructure, state of the economy, shareholder demands, natural environment, labor conditions, and so on (Rubin, 2009). We can classify these factors into five categories of the physical environment, political and legal factors, economic factors, social and socio-cultural factors, and technological factors (Elliott, 2008). Alternatively we can consider inherent or macro factors that give the infrastructure and framework, and competitive or micro factors that are set by the industry and market.

The key problem addressed by this essay is that contemporary scientific discussions do not provide a clear definition of the concept “plant competitiveness”, the most important factors influencing plant's competitiveness are not defined and the system to operationalize comparable and acceptable plant competitiveness factors does not exist (Philips, 2008). The essay is based on a research, which aimed to prepare a plant competitiveness model indicating the process of formation of plant activity's competitiveness and suggesting the key factors and elements of micro and macro environment that determine competitiveness of a contemporary plant.

The transition from microeconomics to macroeconomics is generally couched in terms of perspectives (Elliott, 2008). Having looked at the micro behavior of individual actors (households and firms), macroeconomics gains its relevance by focusing on the 'bigger picture'. 'Bottom up' decision making is replaced by 'top down' investigation and the temptation is to radically separate the macro analysis from that which has gone before.

In common with all other organizations, we can classify the factors in ABC Complete Kitchens' business environment as physical environment, political and legal factors, economic factors, social and socio-cultural factors, and technological factors (Huffington, 2009). Because of the nature of its primary operations in plant's operation, the physical environment is likely to be more important than in many other industries.

Like micro, the entire macro framework is built on the presumption of rational calculators attempting to maximize their prospective returns. No matter how far a given concept seems to ...