8605-426 Understanding the Macro-economic Environment

Unit Overview

8605-426 Understanding the Macro-economic Environment is a unit within the ILM Level 4 modules that focuses on building the understanding of the macroeconomic environment to ensure that the leaders are able to suit the organisation and its activities to the changing environment. The organisation exists in a macroeconomic environment that determines its success in terms of financial and market abilities. The macroeconomic environment involves some of the policies and regulations that have been put within the industry or economic setting, including the domestic fiscal and monetary policies.

These factors shave a significant impact on the ability of the organisation to effectively manage its resources to achieve the preset organisational goals and objectives. They have an implication on the creation of policies and procedures within the organisation as they inform the ability of the organisation to acquire and manage finances as well as the need to ensure that these processes conducted within the organisations are aligned with the changes in the macroeconomic environments and strategically place the organisation in a better place of continue being productive within the current and future settings.

The main purpose and aim of this unit is to help the learners to understand the impact of macroeconomic environments on the organisation and ensure that they can put up interventions to facilitate sustained adaptability and performance of the organisation within this environment. The unit is taught in 25 hours of guided learning and has a credit value of 7 within the overall ILM Level 4 Module.

Suitability of the Unit

Leaders need to ensure that they master the different factors that may affect the performance and productivity of the organisation. The macroeconomic environment, which refers to external economic factors, could significantly affect the organisation’s performance with the current markets and hence influence its ability to achieve both strategic and financial objectives that have been designed within the organisation.

This makes it necessary for leaders and stakeholders within the organisations to conduct effective learning processes that build their capability and skills in understanding the impact that these factors could have on the organisation. 8605-426 Understanding the Macro-economic Environment I a unit that is designed to serve this learning need. The unit is mainly signed to serve the needs of organisation leaders, including middle-level managers who are responsible for developing strategies and policies within the organisation.

However, the consent of this unit also suits top management, who make critical decisions on the organisations and external consultants who are tasked with the duties of supporting decisions making within the organisation. The units suits them as it provides them with an understanding of the different factors within the external economic environments that could influence the performance of the organisation in their current context. This makes this unit important for stakeholders responsible for developing strategies and plans that are aimed at aligning the organisations to existing market conditions to ensure it remains productive.

Learning Outcomes

Upon completion of the unit, the learners should be able to:

• Evaluate the impact that the current domestic economic environment has on the organisation in terms of accomplishing the set objectives

• Identify the impacts of the current domestic fiscal and monetary policy on the organisation in terms of short to medium-term impacts

• Evaluate the international economic environment that influences the organisation in this context

• Understand the impact of the international fiscal and monetary policies and their implications for the organisation in the short to medium term

Key Learning Areas

8605-426 Understanding the Macro-economic Environment is designed to ensure the learners understand the macroeconomic environment and its impacts on the organisation in terms of performance and productivity. As such, the unit covers two aspects of internal and domestic economic environments that could impact the organisation. These factors contribute to determining the ability of the organisations to successfully achieve their goals and objectives in the local and international markets. Some of the areas of focus in the unit include:

Domestic Economic Environment

This area of focus evaluates the macroeconomic theory and indicators of macroeconomic conditions that could affect the performance of the organisation. Some of the main factors included in this area of study include the national income, GDO economic growth, inflation and other economic factors developed within the organisation.

In this area, domestic policies that support globalisation, multinational corporations, industrialisation and strategies of outsourcing are also covered from the context of domestic policies. Additionally, the learners are taken through the impacts that government interventions in terms of fiscal and monetary policies that are developed by the Bank of England and interest rate within the country could have on the organisation in the short to medium terms.

International Economic Environment

The modern society is characterised by significant internationalisation of activities within the organisations. This area of learning covers the impact that the international economic environment could have on the performance of the organisations. It includes various aspects of international markets, including the exchange rates, terms of trade and trends using international trade that could affect eh organisation.

There are different fiscal and monetary policies that have been set out in the international markets to facilitate the interactions and trade between different organisations. This area of learning covers such policies, including international treaties, in influencing and impacting the organisation in this performance and productivity.

Evaluation

8605-426 Understanding the Macro-economic Environment focuses on examining the external economic factors that affect the performance of the manager in their managerial roles and hence impact the organisation. Upon completion of the unit, the learner should be able to achieve the set learning goals. These goals are evaluated using written word assessment where the learner shows their understanding of theoretical and practical concepts learned within the unit.