Introduction
In modern-day business, a lot of factors affect the business such as environment, ethics, teamwork and many more. Considering these factors, the below discussion discusses the macro-environment factors, ethical issues of business and the benefits and challenges of teamwork in business organisations.
Understanding of PESTLE Model
PESTLE Analysis is the most common used model in businesses to identify the macro environmental factors affecting the organisations. it stands for technical, social, political, economic, and environmental factors. The main purpose of this strategic model is to give a bird’s eye view of the entire environment in which organisations operate. The environment is scanned through different angles to keep a track of in order to initiate a plan or idea. The first aspect of this model is political factor deals with the political areas like tax, laws, government and tariffs which affects the business operations. The second aspect, economic factors discuss the economic growth, exchange rates and inflation rate prevailing in a country. Social factors include health consciousness and cultural aspects, population growth as well as other aspects of the society which affects the management strategies of businesses. Technological factors consist of aspects related to technology that affects business such as automation, R&D activity and many more. Legal factors include laws and legislations relating to employment, consumer and health and safety, whereas, environmental factors are inclusive of weather and climate. Thus, considering all these aspects, the backbone of the strategic management is determined leading to formulation of strategies.
Illustrations of application of the model
This model is applied by almost all the organisations to determine business plans and strategies. This model is applied to an American e-commerce and cloud computing company named Amazon. To identify the P of the PESTLE Analysis, it is seen that the Company is governed by political factors in the form of commercial protectionism which involves barrier for foreign firms to enter. Apart from this, a number of assets of Amazon come from abroad which provides a threat to the Company in the form of reduction in tariffs and external imports. On the contrary, trade agreements between Britain and America due to Brexit can be an opportunity. Considering the economic factors, it is seen that the Company’s long term growth is impressive as it caters to the retail industry. The disposable income of the consumers is increasing which provides an opportunity to Amazon. Also, E-retail grew by 23% in 2015. Through applying the cultural aspect on Amazon, it is seen that the majority of the people prefer buying online because of the convenience. However, health consciousness of the consumer is also increasing which is not so beneficial for the American e-commerce company. With regards to the application of this model to identify the technological aspects, it is seen that updated technology can create a great way of success of the Company to cope up with technological trends. Also, the Company introduced a new system of delivery known as HUB which makes the deliveries accessible to customers even when they are not at home. Legal environment of Amazon consists of a federal investigation for non compliance with international law and safety. It has been accused of price errors and frauds. This is an important consideration. Since bog part of the business is based on logistics, therefore, the Company has to comply with gas emission regulations. All the important considerations have been highlighted through the application of PESTLE Analysis on Amazon.
Ethical issues
Each and every business is required to follow ethics in conducting its business. However, sometimes organisations do not apply ethics. In case of Amazon, it is seen that the Company has never published a sustainability report which in turn questions the ethics of the business regarding the environmental impact. This is a major ethical issue for the Company as this affects the profits of the Company. Moreover, the Company has been accused of charging false prices from the customers which have affected the business as customers do not want to relate themselves with the Company which is indulged in fraudulent activities. Thus, ethical issues of Amazon have been the resultant of its ineffectiveness.
Benefits and challenges of team work
The success of business organisations is highly determined by the teamwork as it takes a team to accomplish a common goal. With regards to team work, there are many benefits and challenges attached which in turn affect the success of business. Considering the benefits, it is seen that team work promotes unity in an organisation. Teamwork brings different individuals from different departments and countries which promotes unity. For instance, Amazon consists of employees from different departments, ethnicities and countries which create a sense of unity. Apart from unity, efficiency of the individuals, as well as organisations, on the whole, is facilitated through team work as team work involves strengths of different individuals. In addition to this, innovative ideas are promoted through teamwork. For instance, Amazon has come up with new creative ideas because of the teamwork in diverse groups.
In spite of the benefits, teamwork is characterized by many challenges such as ineffective communication, conflicts, and structural problems. Since a team involves a lot of members, therefore, communication is a major challenge as it is very difficult to communicate with all the team members. Apart from this, conflicts of interest and opinions arise due to team work as people may have different opinions which result into clashes. Another major challenge is the structure which leads to structural problems in the form of unclear objectives, improper work allocation and many more. For instance, due to time difference between the US and Japan, the team members of the sales team of Amazon had to face a number of difficulties as they were unable to discuss with each other.
Conclusion
Through this discussion, it is concluded that business organisations have to consider macro environmental factors to initiate a plan or a strategy that is beneficial for the business. PESTLE Analysis play an important role in determining environmental factors. Businesses are also characterised by ethical issues and team work benefits and challenges.
References
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