Question

Which of the following statements about the PESTEL analysis is true?

1) It is a framework used to analyze the external macro-environmental factors that impact an organization.
2) It is a framework used to analyze the internal micro-environmental factors that impact an organization.
3) It is a framework used to analyze the financial performance of an organization.
4) It is a framework used to analyze the competitive landscape of an organization.

Answer 1

The PESTEL analysis is a framework used to analyze the external macro-environmental factors that impact an organization, which is the correct answer to the student's query.

Step-by-step explanation:

When assessing which of the following statements about the PESTEL analysis is true, it is important to understand the scope of this analytical framework. PESTEL analysis is explicitly designed to help organizations review critical external macro-environmental factors that might affect their operations. These factors include Political, Economic, Social, Technological, Environmental, and Legal aspects. Therefore, the correct answer to the question is: 1) It is a framework used to analyze the external macro-environmental factors that impact an organization. The PESTEL analysis (Political, Economic, Social, Technological, Environmental, and Legal) is a strategic management tool used to examine and evaluate the external factors or forces that can affect an organization. It helps organizations understand the broader context in which they operate and adapt to changes in the external environment.