Difference Between Micro (Internal) Environment and Macro (External) Environment

Main Difference

The business environment is an essential atmosphere for the different business purposes for the companies and the organizations. One organization can’t flourish outside the business environment. An organization working in isolation suffers as different factors, and elements of the business environment are missing in it. There are two types of business environments; macro environment and microenvironment; they are distinguished from each other by contact with the business organizations and influence on it. As we know that micro means small, the microenvironment refers to the business environment that is quite specific as it is direct contact with the particular business. On the other hand, as we know that macro means large, the macro environment refers to the business environment on a larger scale, which has no direct contact or direct influence on the specific business. The microenvironment is more specific as it comprises of the elements that are directly in contact with companies (business). Contrary to this, the macro environment is general which has the indirect impact on every of the business entity.

Comparison Chart

What is Micro (Internal) Environment?

The microenvironment is the business environment in which the corporations are directly in contact, and it has a direct influence on the business entity. The microenvironment is also known as the internal environment; it comprises of the elements like competitors, suppliers, organization itself, market, intermediaries. It has more specific implication as it has a direct effect on the specific business entity. The factors or the elements of the microenvironment are also specific in nature, following that they can be easily controlled. In other words, we can say that microenvironment is the type of business environment that a company is surrounded off, this type of environment has a direct and regular effect on the business entity. The study or analysis done on the microenvironment is called the COSMIC analysis (acronym derived from the name of elements of microenvironment). The suppliers, in this case, are those who provide the raw products and other commodities to the firm so that they can manufacture the useful products. And the other important element of this environment is a competitor; which refers to the firms and companies in the market which offer the substitute or near substitute products and try to gain more of the market share regarding sales.

What is Macro (External) Environment?

The macro environment is the business environment which is not surrounding the business enterprises, but it has a direct influence on each of the entity. As we know that macro means large, in this type of business environment the factors and elements are studied on a global scale or larger scale, which doesn’t affect the specific business but all the businesses. In a more compact way, we can say that in this case, it can happen that one business entity might have a positive effect and the other might suffer. The macro environment is also called the external environment as it doesn’t surround the business entities. Population & Demographic, Economic, Socio-Cultural, Technological, Legal & Political and Environmental are the elements of this business environment, and the study of the environment on this basis is called the PESTLE Analysis. The outcomes or influences of this environment are uncontrollable as they are on the larger scale.

Micro (Internal) Environment vs. Macro (External) Environment

• The microenvironment refers to the business environment that is quite specific as it is direct contact with the particular business. On the other hand, as we know that macro means large, the macro environment refers to the business environment on a larger scale, which has no direct contact or direct influence on the specific business.
• The microenvironment has a direct effect on the particular business entity, whereas the macro environment has an indirect effect on every of the business entity.
• The microenvironment is also known as the internal environment while the macro environment is known as the external environment.
• Microenvironment comprises of the elements like competitors, suppliers, organization itself, market, intermediaries. Population & Demographic, Economic, Socio-Cultural, Technological, Legal & Political and Environmental are the elements of the macro environment.

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