Micro environment refers to the immediate and direct environment surrounding a business organization that affects its daily operations, performance, and decision-making. It consists of factors that are within the control of the organization and can be manipulated to achieve its objectives.

Operating Environment
The micro-environment is also called the operating environment because it includes all the actors and forces that directly affect the organization's operations and performance. These actors include:

1. Suppliers: Suppliers are the individuals or organizations that provide inputs or raw materials to the organization for production. They can affect the organization's operations, quality, and costs of production.

2. Customers: Customers are the individuals or organizations that purchase goods or services from the organization. They can affect the organization's sales, revenues, and profits.

3. Competitors: Competitors are the organizations that offer similar goods or services to the same market. They can affect the organization's market share, pricing, and marketing strategies.

4. Intermediaries: Intermediaries are the individuals or organizations that facilitate the distribution of goods or services from the organization to the customers. They can affect the organization's marketing strategies, pricing, and distribution channels.

5. Employees: Employees are the individuals who work for the organization. They can affect the organization's productivity, quality, and customer service.

Conclusion
Thus, the micro-environment or operating environment is an essential aspect of the business environment that affects the organization's daily operations, performance, and decision-making. Understanding and managing the micro-environment can help the organization achieve its objectives and gain a competitive advantage over its rivals.