PESTEL analysis – Context of the organisation

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Context of the organisation

As an addition to our previous published blog about the SWOT analysis, I decided to give you more information on another effective tool for identifying the context of the organization of clause 4.1. Just like the SWOT, the PESTEL is one of the tools that is most used by companies to identify the external aspects of the organization. You’re probably thinking that you don’t need to use both the SWOT and PESTEL analysis, and you’re right as the SWOT analysis already takes care of the external factors. Although, business environmental scanning is best achieved when using both tools in collaboration. It may be a cumbersome task, but it gives your organization the full view of defining the context.

ISO Ask for Context Analysis

The new requirements of ISO 9001:2015 state that you need to carry out an analysis that indicates the internal and external factors that affect the organization. To help you further, I’ll show you examples of each factor so that you can apply them to your business.

(P)olitical factors

By examining the political factors, you should look at government decisions. Legislation and regulations are very important here. A change in these can affect your organization in the upcoming 3 to 5 years. Ask yourself the following questions:

(E)conomic factors

You will have to examine which economic factors may affect your organization. These factors are determinants of an economy’s performance that directly impact your organization and have resonating long term effects. Use the following questions to find out the important factors:

  • How stable is the current economy? Is it in an period of growth or recession?
  • How is globalization affecting the economic environment?
  • Do consumers and businesses have easy access to credit? If not, how will this affect your organization?

(S)ocio-cultural factors

The consumer is mapped out by means of socio-cultural factors. This makes it possible to determine, among other things, how far the power lies with the consumer. The socio-cultural factors can be examined by asking yourself the following questions:

  • Are people changing buying habits?
  • How do religious beliefs and lifestyle choices affect the population?
  • Are there any new social trends?

(T)echnological factors

Depending on the industry, these factors will have more impact or less impact. Assess any big technological developments and determine how they can impact your organisation. These questions can help you further:

  • Are there new technologies that you could be using?
  • Do any of your competitors have access to new technologies that will result in a competitive advantage?
  • Are there other technological developments that could affect your industry?

(E)nvironmental factors

The level at which you should identify environmental aspects will depend on your intended purpose. A company can determine that they have environmental aspects consisting of:

(L)egal factors

This factor takes into consideration all legal aspects. This point is closely related to political factors but focuses more on the actual laws and not on the political directions of a country or region. This can include:

  • Are their new environmental permitting requirements for your sector?
  • Could any industry-specific regulation affect your organization?
  • Are there changes in employees’ law?

TIP:

Do not collect large amounts of data without properly analyzing and understanding them first. After that you can carefully consider which factors are important to your organization. This allows you to create an actionable plan that is prepared for upcoming changes.

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