BUSI1171

Analyzing countries: the

Pestle Framework

Dr. Angelo M. Solarino

DUBS
Dept. of M&M
The guiding framework

Structure Conduct Performance

External Internal Efficiency and

environment: environment: effectiveness
• Pestle • Organization • Economic
• Industry • (Strategy) performance
analysis • (Differentiation )
• (Collusion)
• (Market power)

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Readings

Hamilton & Webster: The International Business Environment 4e

• 9. The Political Environment
• 11. The Financial Framework

• 7. The Social-Cultural Framework

• 8. The Technological Framework

• 10. The Legal Environment Optional ridings are

located at the end of each
• 12. The Ecological Environment
section

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PESTLE

Political
Economic
Social
Technological
Legal
Environmental

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The Social-Cultural Framework

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Refers to the social and cultural characteristics of:
a group of people…
• in a particular geographical area
• (that are transmitted from generation to
generation).
E.g.,
• Population size, distribution, social stratification
• Age distribution
• Cultural issues
• Crime & Corruption
• Role (or not) of religion
• Education systems, literacy levels 6
Age distribution for Qatar

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https://www.cia.gov/the-world-factbook/countries/qatar/images/220c1393-8dd3-55ae-b56f-d45e85d57423
Age distribution for Japan

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Age distribution for Nigeria

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Q: what can you infer from these graphs?

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How about the UK?

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Migration
Internal or from other countries
Immigrants expand consumer demand for goods
and services.
Immigration leads to more investment.
Both effects result in greater demand for labour and
thus increased wages and employment in the
economy.
→ Generate more revenues for the state
→ Create demands for goods
→ Fill labour shortage
→ Often used as an easy scapegoat….
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https://www.bbc.co.uk/news/57810729
Culture encompasses…..

• Values – including moral/religious beliefs

• Norms – rules of behaviour
• Sanctions – to enforce the norms
• Language
• Diet
• Artifacts (e.g., Dresses)
• And Institutions to transmit the norms and values

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HSBC Ads about Culture

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M&S experience in India

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Another example: McDonald’s in India

NO
beef!

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 CULTURE Schwartz A society that
emphasizes active mastery of the social
Mastery environment and individual’s rights to get
ahead of other people.

recognizes individuals as autonomous

Intellectual entities who are entitled to pursue their own
autonomy intellectual interests and desires.

legitimacy of hierarchical roles and resource

Hierarchy allocation.

the transcendence of selfless interests.

Egalitarian
commit
individuals as autonomous entities who are
Affective entitled to pursue their stimulation and
autonomy. hedonism interests and desires.

emphasizes close-knit harmonious relations, the

Conservatis maintenance of status-quo and avoids actions
m. that disturb traditional order.

harmony with nature.

https://www.pnas.org/content/114/30/7782/t Harmony
ab-article-info 17
 World Value Survey

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https://youtu.be/ABWYOcru7js
What cultural change have you witnessed in the UK?
Where is the UK going next?

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Cultural pendulum

Walsh, J. P., & Solarino, A. M.

(2016). Commitments and Appeals
to Make a Better World: The
Global Compact, Laudato Si and
Our Future. Journal of Corporate
Citizenship, (64), 121-144.
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Changing family structure

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 Other ways to assess the values of a country how poor are treated
Other ways to assess the values of a country
Liberal Model
• low levels of state
intervention
• minimal levels of welfare
provision
• distinguishing between
deserving and
undeserving poor
• people improving their
position through their
own efforts
Corporatist Model
• low levels of state
intervention
• mid levels of social
expenditure
• provides generous welfare
benefits based on
individual contributions
• poverty as inevitable or
due to social injustice
• importance of work
• values dialogue amongst
the social partners
• important role of
voluntary organizations in
welfare provision
Social Democratic Model
• relatively high levels of
state intervention
• relatively high levels of
social expenditure
• generous and universal
welfare benefits
• redistributive tax and
spending policies
• help for those wishing to
work
• dialogue between the
social partners
East Asia Model
• priority given to economic
growth
• relatively low welfare
benefits and low levels of
social expenditure…but
• strong emphasis on
educational provision
• prise improving their
position through their
own efforts
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Perception of time

Languages differ widely in the ways they

encode time.
Languages that grammatically associate
the future and the present, foster future-
oriented behavior
Speakers of such languages: save more,
retire with more wealth, smoke less,
practice safer sex, and are less obese.

Chen, M. K. (2013). The effect of language on economic behavior: Evidence from savings rates, health behaviors, and
retirement assets. American Economic Review, 103(2), 690-731. 23
Cultural tightness
“countries that experienced a lot of threat were
tighter. Some nations experience a lot of
threat—whether it is a high level of natural
disasters, famine, and resource scarcity, or
whether it comes from the constant threat of
invasions from one’s neighbors or from a high
level of population density on one’s soil that
can create chaos”

Gelfand, M. J., Raver, J. L., Nishii, L., Leslie, L. M., Lun, J., Lim, B. C., ... & Yamaguchi, S. (2011). Differences between tight and
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loose cultures: A 33-nation study. Science, 332(6033), 1100-1104.
Social movements

• Black Lives Matter (US)

• Belarus: Lukashenko’s flawed election
• Fights against illiberal democracies (Poland)
• Anti-lockdown protests (UK, US)
• Gender and identities (global)
• Gender and equality
• Cancel Culture (UK, US)
And more…

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The Technological Framework

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What is Technology?

The know-how or…

The pool of ideas or…
The knowledge….

that can be used commercially

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Technology can be measured as:

State of technological development

Technological gap and Technological literacy of workers, consumers

Technology leakage, counterfeiting, piracy

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Patents

IP Facts and Figures (wipo.int) 29

WHICH COUNTRIES SPECIALIZE IN WHICH
TECHNOLOGIES?

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WHICH FIRMS LEAD INTERNATIONAL PATENT
FILINGS?

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Importance for business
The Challenges

R&D no guarantee of success

Shortening of the product life cycle

• Product obsolescence

Different business models

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Technological gap and digital divide

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Statista.com
Technological gap and technological literacy
Technology skills (digital literacy) are computer skills that one must possess to
utilize technology effectively in any academic or non-academic setting.

Technology literacy is the ability to effectively use technology to access,

evaluate, integrate, create and communicate information to enhance the
learning process through problem-solving and critical thinking.

Tech skills without tech literacy = functional analphabetism

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How do firm Innovate?

Internal: External sources:

• R&D departments • Universities
• Research institutes
• Employees
• Individual inventors
• New machinery and • Other firms:
equipment » rivals
» distributors
» customers
» suppliers

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LEGAL & Technological

Protecting Technology
• Patents – exclusive right to exploit an idea
commercially
• Copyright – literature, music TV, film
• Trade marks and designs
• Secrecy/preventing employees working for a
rival company

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Global IPR issues

Chinese copycat
cars: how do they
get away with it? |
Auto Express

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Patent litigations

38| Patexia
Patexia Insight 99: Most Active Companies in Patent Litigation (2021)
Technological embargo
Share of smartphone shipments in Europe 2015-2021, by vendor

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