Major elements of the Mega Environment include the technological element of the mega-environment. This reflects the current state of knowledge regarding the production of products and services. Technology is a particular state of knowledge. It is not ‘things.’ A computer, for instance, is an artefact, or an example of technology, and is not technology itself. Research indicates that technology tends to evolve through periods of incremental change punctuated by technological breakthroughs that either enhance or destroy the competence of firms in an industry.
The economic element of the mega-environment encompasses the systems of producing, distributing, and consuming wealth. In a capitalist economy, economic activity is governed by market forces and the means of production are privately owned by individuals, either directly or through corporations. In a socialist economy, the means of production are owned by the state and economic activity is coordinated by state plan. In practice, countries tend to have hybrid economies, incorporating elements of capitalism and socialism.
Organizations are influenced in any given economic system by a variety of economic conditions over which they have little control, such as inflation and interest rates. The legal-political element of the mega-environment includes the legal and governmental systems within which an organization must function.
The socio-cultural element of the mega-environment includes the attitudes, values, norms, beliefs, behaviours, and associated demographic trends that are characteristic of a given geographic area. Socio-cultural trends can result in important shifts in demand for products.
The international element of the mega-environment includes the developments in countries outside an organization’s home country that have the potential impact to the organization. International factors far beyond the direct influence of a particular organization can have profound effects on its ability to operate successfully.