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Welcome to Week 2

In strategy, the environment means everything and everyone outside the organisation (Lynch, 2012).
© Coventry University. CC BY-NC 4.0

This week, we will look in detail at the following:

  • The PEST model
  • Drivers of globalisation
  • The two types of institutions; informal and formal

Let’s begin by defining exactly what we mean by the term ‘macro environment’.

…the part of the environment over which the business can rarely exert any direct influence but to which it must respond.
(Stonehouse et al. 2000: p.104)
Globalisation is creating a complex and dynamic macro environment in which organisations must operate, but at the same time it generates risk and uncertainty within the environment.
Globalisation can be defined as the integration of economies, industries, markets, cultures and policy-making around the world. It describes a process by which national and regional economies, societies, and cultures have become integrated through the global network of trade, communication, immigration and transportation.
The article by Mike Collins, ‘The Pros And Cons Of Globalization’ (2015), will help you complete the task below.

Your task

Answer the following questions and share your thoughts and comments in the discussion area.
  • Does globalisation create a standardised rule of doing business?
  • What do you think are the main risks in taking a globalised strategy?

References

Collins, M. (2015). The Pros And Cons Of Globalization. https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#745430a1ccce

Stonehouse, G., Hamill, J., Campbell, D. and Purdie, T. (2000). Global and Transnational Business: Strategy and Management. Wiley.

© Coventry University. CC BY-NC 4.0
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An Introduction to Macro Environmental Analysis and Business Strategy

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