Page 30 - DMGT401Business Environment

Unit 1: Indian Business Environment

Notes

Notes PESTLE is an acronym for Political, Economic, Social, Technological, Legal and
Environmental factors, which are used to assess the market for a business or organizational
unit strategic plan

It is important to clearly identify the subject of a PESTLE analysis (that is a clear goal or output
requirement), because an analysis of this type is multi faceted in relation to a particular business
unit or proposition – if you dilute the focus you will produce an unclear picture – so be clear
about the situation and perspective that you use PESTLE to analyze.

PESTLE Analysis on an HR Department or other Internal Function

While the PEST or PESTLE analysis is primarily aimed at looking at the external environment of
an organization, many HR courses ask students to use the PEST or PESTLE analysis model to
look at their own function. In this context we need to imagine that the department (HR) is an
organization in its own right and look outside. Factors to include in your analysis may include
the following:
1. Political

(a) What is the culture of the organization?
(b) How is the HR function viewed by other functions?
(c) Who are the political champions of HR (or its adversaries)?
(d) Shareholder views

2. Economic
(a) What is the budgetary position of the department?
(b) Is more money available?
(c) Are our customers likely to spend more or less money on the services we offer?

(d) What is happening to the financial status of the organization?
(e) Interest rates
(f) Inflation
(g) Salary trends in the sector

3. Sociological
(a) Other departmental attitudes to HR
(b) Population shifts (age profile)
(c) Education

(d) Fads
(e) Diversity
(f) Immigration/emigration
(g) Health

(h) Living standards

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