LO6

Question 1

What is PESTLE

Answer 1

Political
Environmental
Social
Technological
Legal
Environmental

Question 2

Political

Answer 2

These factors determine the extent to which a government may influence the economy or a certain industry.

For example, a government may impose a new tax or duty due to which entire revenue generating structures of organizations might change.

Political factors include tax policies, Fiscal policy, trade tariffs etc. that a government may levy around the fiscal year and it may affect the business environment (economic environment) to a great extent.

Question 3

Environmental

Answer 3

The business cycle
Exchange rates
Interest rates
Inflation

Question 4

Social

Answer 4

Social factors can include population growth, focus on public health, age distribution, wealth/wage distribution, career attitudes, cultural norms and expectations, health consciousness, and popular trends

Question 5

Technology

Answer 5

new technology
ICT such as the internet, mobile apps, and social media
augmented reality (AR)
production
marketing
e-commerce technology
automation
data management practices

Question 6

Legal

Answer 6

As laws change or are introduced, businesses are impacted in different ways. This can include:
- Training employees of the changes and how they impact their work
- Costs of making changes (processes, documentation, etc.)
- Legal advice
- Efficiency reduction as the business adapts to new laws
- Potential fines if the business doesn’t keep up with changes in the law

Question 7

Environmental

Answer 7

From climate and weather to the availability of resources, environmental factors impact businesses. Considerations include:

• Sustainability: Meeting the needs of current generation without compromising the needs of future generations
• Tax practices: Governments add taxes and costs to businesses on wastage, emissions, recycling, etc.
• Ethical sourcing (supply chain): From sustainable resources to deforestation, how a business sources their supplies is important under environmental practices
• Pollution & carbon emissions: A tariff/tax is added to CO2 emissions in many countries, as well as costs for the safe and environmental disposal of waste can be expensive