Which environment includes factors that affect a company's immediate working conditions?

The micro environment includes factors that directly influence a company’s immediate working conditions and operations. These factors include stakeholders such as suppliers, customers, competitors, and employees, as well as the company's ability to interact with them. The micro environment is crucial because it encompasses the elements that can be influenced directly by the company, such as its organizational structure, resources, and relationships.

Understanding the micro environment helps businesses develop strategies that align with their operational capabilities and market needs. For example, a company must consider supplier reliability to ensure timely production and customer satisfaction. Employee effectiveness also plays a significant role in delivering value to customers, reflecting the interconnectedness present in the micro environment.

In contrast, the macro environment involves broader societal forces that do not directly impact immediate operations, such as economic conditions, political trends, and technological advancements. These factors influence a company’s strategy and future planning but are not part of the day-to-day working conditions. Similarly, while the competitive environment focuses on the number and strength of competitors in the market, it is still considered a part of the micro environment since it affects how a company positions itself against rivals. The social environment specifically pertains to societal norms and values that influence market behavior, further emphasizing the distinction between environments.