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CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment

Which statement best describes the micro (task) environment of a business, as distinct from its macro environment?

The micro environment consists of forces like suppliers, customers and competitors that directly and specifically affect a firm's operations. Broad forces like inflation, demographics and laws that affect all businesses generally belong to the macro environment, so they do not describe the micro environment.

  1. AIt consists of forces such as suppliers, customers and competitors that directly affect the firm's operationsCorrect
  2. BIt consists of broad forces such as inflation, demographics and legislation affecting all firms alike
  3. CIt consists only of the firm's employees and shareholders
  4. DIt consists of the global economy alone

Explanation

The micro environment includes the specific actors that interact directly with the firm: suppliers, customers, competitors, intermediaries and the public. Broad forces affecting all firms in general are macro factors, so the second option is wrong.

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