Strategic management

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Sanmitra Sanjeev Ratnaparkhi

107 Points Posted on 08 April 2014

Will somebody explain me that whether the environment (highlighted portion) means, here, all that is political, legal, economic, .........?

Question:-

The term PESTLE analisis is used to describe a framework for analyzing the micro-environmental factors

Answer:-

Incorrect:The term PESTLE Analysis is used to describe a framework for analysis of macro environmental factors. IT involves identification of political, economic, socio-cultural, technological, legal and environmental influences on an organization and providing a way of scanning the environmental influences that have affected or are likely to affect an organization or its policy. The advantage of this tool is that it encourages management into proactive and structured thinking in its decision making.

Replies (2)

harish ragav

student-IPCC

320 Points Posted on 09 April 2014

A macro environment is the major uncontrollable and external factors influencing decision making and affects the strategies and performance of an organization. Factors that are included economic, legal, political, demographics, social conditions, natural forces, and technological changes. Some examples are competitors, disastrous weather, change in interest rates, and government regulations.

They may be general forces within the macro or remote environment, which consists of political-legal, economic, socio-cultural, technological forces – usually called PEST. Political-legal force influences strategy formulation through government and law intervention. For example, the environment law requires the world’s automobile manufacturers to reduce emission of green house gasses, and therefore these manufacturers have to reformulate their product strategy. Economic force influences strategy formulation through economic growth, interest rates, exchange rates and the inflation rate.
for eg : Socio-cultural force is about the cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.

Hope u got the point. feel free to ask further more queries..

Regards,

Harish Ragav