Learn how political, economic, social, technological, legal, and environmental (PESTLE) factors can have far-reaching effects on businesses worldwide. Prepare for the SHRM-SCP certification exam with this comprehensive explanation.
Table of Contents
Question
A natural disaster results in a major disruption to a country’s manufacturing of goods that are exported worldwide. Far-reaching effects to other countries include disruption of global supply chains changes to import policies, and new regulations. What term best describes this kind of breadth of effects?
Answer
Political, economic, social, technological, legal, and environmental (PESTLE)
Explanation
The term that best describes the breadth of effects resulting from a major disruption to a country’s manufacturing due to a natural disaster is Political, Economic, Social, Technological, Legal, and Environmental (PESTLE).
PESTLE is a framework used to analyze the macro-environmental factors that can impact an organization’s performance. When a significant event, such as a natural disaster, disrupts a country’s manufacturing capabilities, it can have far-reaching consequences for businesses and economies around the world.
Here’s how each element of PESTLE relates to the scenario:
- Political: Changes in import policies and regulations may be implemented by governments in response to the disruption.
- Economic: Disruption of global supply chains can lead to economic instability, affecting trade, prices, and economic growth.
- Social: The event may cause shifts in consumer behavior and demand for certain products.
- Technological: Businesses may need to adapt their technologies or find alternative solutions to maintain operations.
- Legal: New regulations and legal requirements may be put in place to address the challenges posed by the disruption.
- Environmental: The natural disaster itself is an environmental factor that has triggered the manufacturing disruption and its subsequent effects.
Understanding PESTLE helps organizations assess the potential impact of external events on their operations and develop strategies to mitigate risks and adapt to changing circumstances. By recognizing the interconnectedness of these factors, businesses can make informed decisions and navigate complex global challenges more effectively.
SHRM Senior Certified Professional (SHRM-SCP) certification exam practice question and answer (Q&A) dump with detail explanation and reference available free, helpful to pass the SHRM-SCP exam and earn SHRM-SCP certification.