See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/272184190

Macroenvironment

Chapter · January 2015

DOI: 10.1002/9781118785317.weom090501

CITATION READS

1 8,000

1 author:

Tanya Sammut-Bonnici
University of Malta
94 PUBLICATIONS   185 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Wiley Encyclopedia of Management - Vol 12 Strategic Management View project

IOT Internet of Things View project

All content following this page was uploaded by Tanya Sammut-Bonnici on 30 October 2017.

The user has requested enhancement of the downloaded file.

macroenvironment
Tanya Sammut-Bonnici
The macroenvironment consists of variables that
are beyond the control of an organization, but
which require analysis to realign corporate and
marketing strategy to shifting business environ-
ments. The major forces in the macroenviron-
ment are viewed to be political, economic, social,
technological, legal, ecological, demographical,
ethical, and regulatory.
The mnemonics of the macrovariables have
given rise to the nomenclature of analytical
tools such as PEST, PESTEL, or PESTLE,
which include environment and legal elements,
STEEPLE, which includes ethics, and
STEEPLED, which adds an analysis of demo-
graphic factors. An increase in awareness of
environmental or ecological issues has encour-
aged the implementation of another version of
the PEST framework – the STEER analyt-
ical tool, which incorporates ecological and
regulatory factors.
The objective of macroenvironment analysis is
to help organizations recognize major develop-
ments and future implications. Macroenviron-
ment analysis is conducted in conjunction with
SWOT analysis to identify possible threats to the
organization’s operations and the opportunities
for further expansion.
The structure of the analytical tools employed
to view the macroenvironment implies that
organizations are reactive to their environment.
Some organizations may be instrumental in
shaping their environment and act as game
Wiley Encyclopedia of Management, edited by Professor Sir Cary L Cooper.
Copyright © 2014 John Wiley & Sons, Ltd.
View publication stats
changers when they introduce major technolog-
ical innovations. Other companies are influential
in establishing new technological standards,
policy making, and legislative processes.
An organization’s environmental analysis can
be biased in terms of the level of focus given
to different factors of the macroenvironment.
Strategists may review their business environ-
ment by creating cognitive maps, which act as
tools to process knowledge. These frameworks
are shaped mainly from personal experience.
Individual and collective cognitive maps within
an industry can be indifferent to significant
economic indicators and market signals during
a time when an industry is changing rapidly.
Cognitive inertia, unless reexamined by regular
reviews of incoming information that refresh
the strategist’s understanding of the business
environment, can lead to the decline of an
organization.
See also cognitive map; marketing environment;
micro environment; SWOT analysis
Bibliography
Hodgkinson, G.P. and Sparrow, P. (2002) The competent
organization, Open University Press discusses
the importance of rationality and intention,
Buckingham.
Jobber, D. (2004) Principles and Practices of Marketing, 4th
edn, McGraw-Hill, London.
Kotler, P. (2003) Marketing Management: Analysis, Plan-
ning, Implementation and Control, 11th edn, Prentice-
Hall, Englewood Cliffs, NJ.