Are all six elements of PESTEL important to every organization? Why or why not?

Posted: January 22nd, 2023

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Are all six elements of PESTEL important to every organization? Why or why not?
Post a substantive response to all parts of the initial discussion prompt.
1)According to the text, Table 3.1 PESTEL, it says “PESTEL analysis is a popular framework for organizing these factors and trends and isolating how they influence industries and the firms within them.” It represents the political, economic, social, technological, environmental, and legal aspects of an organization. Within the organization the political factors targets certain things like the tax policies and stability of government. This is important because you need to make sure your organization is following the government requests of your business and that you pay your business taxes. Economic factors targets the interest rates, unemployment rate, and the growth of the economy. This is important because you want to make sure your organization is beneficial to your local community. You need to make sure your prices are what your local consumers can afford to help your business stay successful. Social factors in my opinion play a huge role in any organization because it targets demographics. You need to know what age group, ethic mix, etc. is in your local community because you need to know what you’re selling. For example, if you sell canes and walkers that targets the elderly and I sell it in a younger age community then I will most likely go out of service. Technological factors help with any advancements in service industry. This helps because it helps improve the necessity needed and to perform transactions, keep inventory, advance in marketing, and much more. Environmental factors is important because depending on the organization it helps the business to be built in certain materials to be able to stand through natural disasters and weather patterns certain states know they go through annually. Legal factors includes laws that protects employees, safety, discrimination, and more. This is important within an organization because unfortunately no one is able to watch everyone’s move or know what they are thinking so laws needs to be enforced and practiced. Also employees needs to know what their job offers so they know how to report certain things and what they should know they are supposed to receive in the workplace.
2)There are six elements important elements to PESTEL, per the author: “the PESTEL framework (Political, Economic, Socio-cultural, Environment/Ecological, and Legal)” (Strategic Management p. 53), the 6th element is the competitive environment of the industry. Moreover, the six PESTEL elements are important to every organization because all organizations are affected by all of them regardless of the companies’ structure. For example, a small business may not realize they are being affected by an environmental/ecological change since they are an e-commerce company, but all companies can be affected by it directly or indirectly; for instance, in this e-commerce example, the owner is not affected directly by a change in rent since they don’t have a physical store, but if the rent of the company they purchase the sources from gets their rent raised, they would simply pass that cost to the small business owners and it would still affect them. Additionally, companies will ultimately be affected by one of the 5 elements since the competition prices will change so would the company themselves to continue competing amongst themselves.

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