The recent world financial crisis has had an immediate impact in most business

sectors. This is a macro environment force which businesses have little control
over. Discuss other macro environment forces and the effects thereof that
Southern African businesses are exposed to.

The macro-enironment, also known as far or remote environment, consists of the forces
at work in the business environment which will shape the industries and markets in
which an organization compete. It can be subdivided into global and local macro-
environment.

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Figure 1 showing elements of the Macro-environmental Forces

Global macro-environment deals with the global trends whereas local environment
deals with the changes and trends at the level of an individual country.

The macro-environment forces can be categorized using the STEP analysis; Socio-
cultural, Technological, Economical and Political and Legal.

 Socio-cultural Factor

It consist mainly customs, lifestyles and values that characterize the society in which an
organization operate. These factors determine whether the organization cancan obtain
resources and deliver the goods and services within a society.

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  Technological Factor

This factor is applicable for development of strategic plans. Changing technology affects
the demands of a firm¶s products and services, production process and raw materials.
This either creates an opportunity for the firm or threatens the survival of these products
and the firm itself.

 Economic Factor

It depends within which economic system the firm is operating. This includes the
Balance of Payments, business cycle, distribution of income within the population and
governmental fiscal and monetary system.

SOCIOCULTURAL FACTORS TECHNOLOGICAL FACTORS

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able 2 Showing the major groupings of forces at work in macro-environment and the
variables associated with it.





  Political and Legal Factor

It is an environment where political and legal decisions are made. The political parties in
power influence the business practices. The Legal factor determines what can be done
or not at a particular part of time.

The effects thereof that South African Businesses are exposed to are as follows.

Following the recent governmental (Mauritian Government) decision to ban smoking in

public places, changes have been reflected in many organizations. The marketing
strategy of Tobacco Industry has been modified. Strong publicity promotions of health
disasters caused by cigarettes have changed the attitudes of customers. Also, legally,
the customer will be heavily fined if he is caught soking in public places.

In the early 2000, the Cyber City was set up at Ebene (Mauritius) to expand the
Business in Services via Call Centers and Business and Process Organization (BPO).
The investing firms will get the benefit of having employees who can communicate in
both French and English. The vision of the government being to promote Mauritius as a
Cyber Island, many facilities were put at the disposal of firms who want to train there
personel to acquire knowledge in Computer field and the number of Computer
Graduates have increased. All sorts of facilities are given to the general public to buy a
Personal Computer (Loans at low interest rates). The Computer Business has
expanded through the years now.

Higher Educational level means higher income and a better living. A more educated
workforce means less training. Purchase of goods and services have increased and
undesireable working conditions (overtime, night shift etc«) is unacceptable by highly
educated workers.

Due to world financial crisis, the Mauritian Textile Industry is suffering a lot and there
was no delay for the consequences to show up. Many industries have shut down and
many workers have lost there jobs. Shibani Inwear is the latest one to close down
leaving about 500 employees unemployed.

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  International Factor

The removal of quotas on export of Sugar from Mauritius to other countries has had an
impact on Sugar Industries. Decisions were taken to close down some Sugar Industries
so as to reduce cost of production. Given that price of Sugar has decreased in the
global market, we have to limit the cost of production by investing in new technology ±
mechanization. There Voluntary Retirement Scheme, the main component of the
strategic plan of the sugar sector, was put forward by the government to rightsize the
labour of the industry so as to meet the actual requirements and economic realities.