PEST Analysis: Strategies And Challenges In An Organization
Organizations have its own strategies and challenges that affect its operations both positively and negatively. It is common for managers to assess each of these challenges closely. The aim is always to take better decisions for the organization’s progress. These challenges can include factors reflecting social, technological, economic and political/ regulations directly or indirectly affecting organization’s functions. Managing and overcoming these challenges require successful managers to have a conceptual knowledge of all business functions.
“Though structure and leadership play a large role in business success, external factors can also shape your company's potential. One method for systematically discovering and quantifying those factors is the PEST analysis” (Arline, 2014).
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The economic factors specified can include the exchange rate, inflation, unemployment, rate of interest, trade cycle and many more.
Exchange rate
Exchange rate is mostly considered in international market. Also there are many other cases in which the exchange rate affects the growth of a business. Hence, exchange rate can be said as value for which the currency of a country can be exchanged for another country’s currency.
Unemployment
“An economy witnesses a number of business cycles in its life. These business cycles involve phases of high or even low level of economic activities” (Business Cycle, 2013). During high periods, jobs tend to be overflowing, since companies need more workers to keep up with demand. When unemployment is low, consumer spending tends to be high because most people have income to spend, which is good for businesses and helps drive growth. When unemployment is high, consumer spending tends to be low because unemployed people don't have excess income to spend.
Interest
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