Explain in brief component of environment ( pestle) with relevant example
Answers
The PESTLE (or PESTEL) Analysis is a tool that is used to identify and analyze the key drivers of change in the strategic or business environment. The abbreviation stands for Political, Economic, Social, Technological, Legal, and Environmental factors. The tool allows the assessing of the current environment and potential changes. The idea is, if the project is better placed than its competitors, it would be able to respond to changes more effectively.
The term has been widely used and the earliest reference can date back to a book by Aguilar in 1967 who discussed ETPS (Economic, Technical, Political, and Social) in his book Scanning the Business Environment. After this publication, came the work of Brown who modified the theory and named it STEP (Strategic Trend Evaluation Process).
This was further modified and became known as the STEPE analysis (Social, Economic, Political, and Ecological factors). Post 1980, the word PESTLE originated along with its variations like PEST, STEEPLE (includes Ethical factors), PESTLIED (includes Demographic and International factors), STEEPLED (includes Demographic and Education factors), etc.
The PESTLE Analysis tool can be used for business planning, strategic planning, marketing planning, product development, and organizational planning. The PESTLE tool provides its users with factors that need to be well researched and brainstormed. These factors are better explained in the next section.
Political: Every project has both internal politics and external politics. The internal politics like team jealousies, cohesive projects, and personal interests occur in all projects and must be considered and managed by stakeholders. The external politics refer to those which the stakeholders do not control. These events include all political events like employment laws, tax policies, trade restrictions, trade reforms, environmental regulations, political stability, tariffs, etc