11.1 International Environments

Today’s global/international world of work is constantly changing. PEST (political, economic, social, technology characteristics) analysis is often used to help companies lead and manage their companies. PEST is a type of audit of the company’s environment and the influences politics, the economy, social/culture changes, and technology changes have on the company. It allows HR departments to respond and adapt to the changes. It is useful to:

• Give companies a “heads up” to opportunities, and warning about threats to the company
• Offers what is happening at a global level related to changes, so companies can adapt
• Gives companies an opportunity to plan for risks and create risk management plans
• Offers views of new or difference markets so companies can make decisions related to facts (Mind Tools, 2022).

Political Characteristics

The company needs to analyze the countries labour market and its laws, property rights, taxes, business policy, regulations, elections, and patents.

Economic Characteristics

The company needs to review the state of the country’s economy (growing, stagnate, declining). They need to look at the exchange rates, people’s incomes, unemployment rates, education levels and availability to develop skills, and credit available.

Sociocultural Characteristics

The company needs to assess if the population of the country is growing or declining, review the demographics ie age of working population, health care, education and social mobility. They need to understand the employment patterns, job market trends in the country and globally, and people’s attitude toward work. The social attitudes and social taboos need to be investigated and have there been changes in recent years. They need to explore people’s religious beliefs and lifestyle choices.

Technology Characteristics

The company needs to know what technology advances are available in the country, and how they would affect the company. They need to know if some technologies are available that can advance the company and its products/services. They need to identify what educational facilities have research departments. They need to understand the people’s work patterns in the country. They need to research if there are technology companies that the company can work with and learn from.

“11.1 International Environments” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.