Contextual Variables Concept
In management terms, are considered as contextual variables all elements not controlled by the organization and which form its macro environment, this is, all elements that even far from the organization and non controllable by it, affect its performance, its strategy and its decision process.
Are examples of contextual variables the economic context, demographic, social, political-legal, technologic, etc.:
- Economic context: includes variables as economy growth, inflation rate, unemployment rate, exchange rate, evolution of private consumption, savings rate, among others.
- Social-cultural context: includes variables like social stability, lifestyles, social values, religion and own culture.
- Political-legal context: includes political stability, economic policies, labor legislation, legal framework, tax system and incentives policy.
- Technologic context: includes all technologic innovations either at the level of the product, either the process, legislation about patents protection, investigation incentives and development, etc.