Micro Environment

The micro environment is all the internal factors that influence the performance of the business. The business has full control in this environment 

  1. Business functions
  2. Resources 
  3. Business policy. 

Business functions 

  • Purchasing = buying goods and services need by the business
  • Production = this is all of the products and skills need to create the final product. ( natural resources, labour, capital, entrepreneurial skills)
  • Human resources = HR (human resources) departments main goal is to recruit, employee and work at retaining workers. 
  • Administration = this department collects data in the business then they processes it into information and this information is then made available for general management. 
  • Marketing = marketing’s main goal is to get the product from the producer to the consumer. They are a bridge between the business and the consumer.
  • Public Relations = The PR department build the image of the business to both the consumers and the shareholders. 
  • Financial = This department makes sure that there is enough capital (money and machinery) in the business and that the capital is being used to the best of its ability.
  • General management = the general management oversee all functions in the business they also plan, organise, lead and control.                           


  • Resources are everything that makes goods and services
  • Human resources; financial resources (capital); physical resources (raw materials).

Business policy. 

  • Frame work = this describes the vision, mission, goals and the objectives of the business.
  • Vision = the vision is seen as the road map of the business. When the vision is set the business looks at the history and the present of the business. The vision is where the business wants to be in the future. 
  • Mission = the mission is a refinement of the business’s vision it specifies the core business functions. It is the day to day activities of the business.
  • Goals and objectives = Goals are long term achievements of the business and objectives are short term. Objectives (short term) help in achieving goals (long term) the business has.
  • The organisational culture= these are values and believes within the business. 
  • Organisational structure = The levels of management is defined as the organisational structure. There is a flat organisational structure and there is a tall organisational structure.  A Flat structure is when there is 2 or 3 levels of management. And a tall organisational structure consists of many levels.