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Mathematics & Economics
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Macro and micro economic factors affecting plant operations (Essay Sample)

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the sample is about economics.

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Content:
Macro and micro economic factors affecting plant operations
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Introduction
The style of running business varies from one country to another. Skill and expertise is necessary towards achieving success in plant operations. The chances of succeeding in business are boosted once the business personnel from various cultural backgrounds discover new approach to handle business problems. The ability to create viable solutions through blending the various cultures that exist and analyzing issues from other people’s perspective is fundamental towards achieving immense business success. The business environment is a collection of factors that influence the operations around business. These factors may be within the plants ability to control (internal factors). They may also be uncontrollable (external factors)
Macro and Micro Economic Factors Affecting Plant Operations
Some of the uncontrollable factors include legal, political, technological, cultural, competitive and demographic factors. It is not possible for the plant to control such factors. The business will be affected by these external factors in the same measure the competitive environment affect its operations. The internal factors are within the ability of the plant to control through the process of management. The internal factors may include capital, location of business enterprise, labor, and land among other factors.
While developing a strategy for business it is important to pay attention to the global factors that influence business. The factors are legal, social, economic, technological and political. It is important to understand the factors while developing strategy for business. The social environment relates to the varying structure of the society. The social factors incorporate taste, lifestyle patterns, and people’s behavior. The structure adopted by the society and lifestyle greatly influences the patterns of buying. Factors such as gender and age play a great part in the buying patterns of the society. It is therefore fundamentally important to consider the various macro and micro economic factors in the cause of executing business.
Political factors
This is arguably the most important of all factors. The political environment widely influences the business environment either positively or negatively. A favorable political environment is necessary for business success. Some of the governments are faced with challenges of political instability. Government regimes may be unpredictable, dramatic and at times hostile leading to civil unrest. In such situations the success of business is put under serious jeopardy.
It is likely that the normal day to day business operations may be halted and unexpected strikes witnessed as a result of political instability. A good example is the current situation that was witnessed in Venezuela (Gutiérrez Briceno, T. 2002). The civil unrest experienced lead to closure of many business including banks. Workers went on strike, riots were evidenced, and private entities were robbed of their foodstuffs. The political environment is very sensitive to business success. Even in the presumably stable governments periods of caution are evidenced especially during transition from one administration to another.
Legal factors
Any plant anticipating business success must beware of the legal requirements at the local level and at the international level, where a business engages in international business. The legal requirements governing business activities often vary from nation to nation. The legal variations may be found in areas such as insurance, minimum wage, overtime regulations and maximum number of weeks of working. The rule of product safety standards and product quality test may vary depending with the country in question.
Below are some highlights of legal differences between countries that may significantly affect business (Brown, C. A et al, 1988)
Local content requirements: some of the local laws indicate that a certain percentage of products must be supplied by locals. In such situations, it becomes a requirement for any plant to utilize the locally available production factors. The significance of such a regulation is to ensure that economic activities at the local level are significant and hence more opportunities for the locals. This requireme...
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