Unit 1: Topic 1 - Understanding the Business Environment Flashcards
External Influences & the PESTLE analysis
What does ‘PESTLE’ stand for ?
Political
Economic
Social
Technological
Legal
Environmental
What can the PESTLE analysis be used for ?
To understand key external factors that an influence a business & their opportunities.
Describe the ‘Social Chapter of the Maastricht Treaty’ and state who this was rolled out by…
The Social Chapter of the Maastricht Treaty was a Political agenda that set out basic rights surrounding employment such as living / working conditions, minimum wage, social security and training.
Labour gov signed chapter during their governing between 1997-2010.
Give 2 examples of political factors that affect businesses.
- Brexit 2016
- Education Policy (Labour 1997-2010)
- Social Chapter of the Maastricht Treaty
What is Brexit & how could this external political factor affect businesses ?
Brexit - EU referendum held under Conservative government for the UK to leave the EU.
Lack of clarity surrounding how to plan for change = complex agreements around trading & UK participation.
Describe the ‘Education Policy’ and explain 1 positive + negative of this.
(Political) Education policy = Labour agenda to ensure at least 50% of young people can access university.
+ More degrees, higher paid jobs
- Businesses less able to recruit on a lower pay / min wage, more training needed, may recruit more from oversees.
What kind of PESTLE factor is Inflation & how cold this impact employers?
Economic Factor
Inflation - Increased prices / services / goods.
Impact on employers: increased cost of raw materials = increased prod/service cost and may affect wages.
Give 2 examples of Economic factors.
- Inflation (2022/23)
- Country (Recession: 2008-09)
- Country ( Time of growth)
Politic can affect economics.
True / False
True
Economic Factor:
Give an example of an industry affected by the 2008/09 recession and how they were impacted.
Car industry affected - some organisations forced to merge e.g., Porsche & Volkswagen, leading to restructuring.
Impact = Restructuring, pay cuts, reduced working hours, concerned about job security.
In 2022/23 inflation lead to increased cost of living including but not limited to fuel price, groceries and services.
True / False
True
Give 2 examples of Social factors.
- Changing trends
- Multicultural society
- Changing shopping habits
Social trends & norms have helped to shape our workplace environments / cultures.
Failure to remain flexible and meet to norms that allow everyone to thrive will lead to poor reputation / organisational restructuring.
Social trends
Workplace
Flexible
Thrive
Reputation
Structure
What PESTLE factor would having to produce information in several languages be the impact of?
Social Factor
Impact of multicultural society
Give an example of a change in shopping habits and explain how this could impact a business…
Increase in online shopping….
Impact = 24 hour staff to cater, picking staff / packing staff ect.
