What is the role of political factor atfecting environment?
Answers
Recent political and economic developments and associated changes in the practice and delivery of health and social care have led managers and professionals to recognise the importance and links between problem solving and decision-making skills. In particular, assessing the impact of political, economic, socio-cultural, environmental and other external influences upon health care policy, proposals and organisational programmes is becoming a recognisable stage of health service strategic development and planning mechanisms. Undertaking this form of strategic analysis therefore is to diagnose the key issues that the organisation needs to address.
This form of analysis can be undertaken by reviewing the organisational (external) environment using the PEST-analysis (sometimes known as STEP-analysis), extended to the PESTELI checklist described below. PESTELI Analysis is a useful tool for understanding the “big picture” of the environment in which you are operating, and the opportunities and threats that lie within it. By understanding your environment, you can take advantage of the opportunities and minimise the threats.
What is PEST(ELI)?
The term PEST has been used regularly in the last 20 years and its true history is difficult to establish. The earliest known reference to tools and techniques for ‘scanning the business environment’ is by Francis J. Aguilar who discusses ‘ETPS’ - a mnemonic for the four sectors of his taxonomy of the environment: Economic, Technical, Political, and Social. Over the years this has become known as PEST with the additional letters are: Ecological factors, Legislative requirements, and Industry analysis (Aguilar, 1967).
PESTELI is known as a ‘trends analysis’. The external environment of an organisation, partnership, community etc. can be assessed by breaking it down into what is happening at Political, Economic, Social, Technological, Environmental, Legal and Industry levels. The same checklist can also be applied inside an organisation.
Initially the acronym PEST was devised, which stands for:
Political factors - both big and small 'p' political forces and influences that may affect the performance of, or the options open to the organisation
Economic influences - the nature of the competition faced by the organisation or its services, and financial resources available within the economy
Sociological trends - demographic changes, trends in the way people live, work, and think
Technological innovations - new approaches to doing new and old things, and tackling new and old problems; these do not necessarily involve technical equipment - they can be novel ways of thinking or of organising
The expanded PESTELI, also includes:
Ecological factors - definition of the wider ecological system of which the organisation is a part and consideration of how the organisation interacts with it
Legislative requirements - originally included under 'political', relevant legislation now requires a heading of its own
Industry analysis - a review of the attractiveness of the industry of which the organisation forms a part.