CAT / FIA FBT Syllabus A. The Business Organisation, Its Stakeholders - External Analysis - Notes ^{1 / 7}

The main components that an organisation should study in order to carry out an external analysis (PEST analysis) are:

Organisational decisions are strongly affected by developments in the political environment.

The political environment has its own system or framework. It regulates society therefore it regulates the system.

A political environment will have the following changes affecting a business:

Policies and Laws (for example laws regarding housing, education, defense, healthcare, energy and environment)
Taxation
Local Councils
Authorities
Overall conduct of its economic policy

Laws come from a number of sources. Common law, parliamentary and government regulations are derived from it.

The legal environment affects all companies, for example:

factors	examples
general legal framework	basic ways of doing business, negligence
criminal law	theft, insider dealing, bribery, deception
company law	directors & their duties, reporting requirements
employment law	dismissal, minimum wage, equal opportunities
health & safety law	fire precautions, safety procedures
data protection	use of information about employees/customers
marketing & sales	laws to protect consumers
environment	pollution control, waste disposal
tax law	corporation tax, income tax, sales tax