Mgmt6202 Graded Assignment 1

The University of the West Indies Open Campus
Name of Programme:
Course Code and Course Name: MGMT6202 - Management Essentials 1
Academic Year: 2020/2021 Semester: 2
Assignment: Using the PESTEL Framework, identify which factors have impacted
the sector in which your organization is categorized in your country. Use examples
from the sector and your institution to support your response.
Facilitator:
Course Coordinator: Ms. Claudia Drakes
Due Date for Assignment:
Date Submitted:
Student ID#:
Name of Student:
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INTRODUCTION
The organization that will be used for the purpose of this paper is Easy Corner Villas
(ECV) where I currently work. ECV is located in South Hill, Anguilla, and it commenced its
operations in 1971. The organization offers both hotel and accommodation services and it is in
the hospitality and tourism industry. There are various competitors that ECV faces in this
industry and they include, but not limited to Paradise Villa, Vista Villa, Sand Villa at Long Bays
Villas, Ani Villa Estate and Alegria Villa among others.
PESTEL framework can be used to analyze the external marketing environment of ECV
and determine the elements that impact on the adopted strategy. These elements may also have a
direct effect on the attainment of the institutional goals and objectives. The results acquired from
this analysis are important in the decision making process by the management, which needs to be
accurate to avoid leading the organization in the wrong direction (UWI, 2021, MGMT6202
Module 2 Unit 4, pp44). The factors that are analyzed in this framework include political,
economic, socio-cultural, technological, environmental, and legal factors. This paper will look
into how these factors affect the strategy and the attainment of goals set by ECV.
CRITICAL ANALYSIS
1. Political Factors
Political factors entails how and to what extent the government’s regulations and
activities influence the economy or the particular industry that an organization operates in. these
factors comprise tax policies, labor laws, political stability, government policies, trade
restrictions and foreign trade policies. It is important that managers keep a keen eye on political
factors as they can have an impact on business operations by making the market environment
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either more or less conducive for the organization [ CITATION Ahs18 \l 1033 ]. In Anguilla,
employment laws that are contained in the Anguilla Labour Code of 2015 are an aspect of
political factors that affect the strategy of ECV. This code binds all employers in Anguilla as they
are required to abide by it in the course of their operations. Part 9 of this code summarizes the
annual holiday terms and conditions that employers are required to adhere to. This part states
that at the end of each year of employment, an employee shall be entitled to annual paid holiday
based on the duration that they have been employed [ CITATION GOA15 \l 1033 ]. Hence, while
drawing up the strategy and allocating duties to workers, the management at ECV should
consider that at certain given periods, there shall be a number of workers who will not be
available as they will be on their annual leave. Thus, there should be plans to ensure that there
will be no vacuum in any position that may compromise the operations of the organization and
the overall attainment of goals and objectives. Sammut-Bonnici (2015) states that the
management needs to be up to date with emmployment laws as a political factor as this will be
critical in helping steer the organization in the right direction. Therefore, this factor is important
for ECV as it helps the management in preparing ahead and avoiding stalling of duties as
employees head for their annual leaves.
2. Economic Factors
The economic environment that are prevalent in the market also have an impact on an
organizations. Some economic factors include demand and supply, inflation, and exchange rates.
The main aim of any organization is to maximize on its profitability while keeping its expenses
as low as possible. Any economic factor that may lead to reduced profitability or a surge in
expenses may resut to the organization faiing to achieve its set objectives.
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Economic growth is the amount of money that the general society is earning. It can also
be termed as the process through which the society’s welath surges over a given period of time.
An increase in wealth means that individuals have more finances at their disposal that they can
spend to acquire the services offered by the organization [ CITATION Pre20 \l 1033 ]. In the past
one year, the world has been faced with the COVID-19 pandemic and this has negatively
impacted the economic growth. People have lost their jobs while businesses have closed,
meaning that the flow of finances has not been as efficient as in the previous years. Likewise, the
organizations that do not deal with essential services have been the most affected as people in the
society are now directing their resources on the most essential aspects that they need to survive,
and unfortunately services offered by ECV cannot be termed as essential. With reduced
operations, the management has developed strategies to ensure the institution remains
operational by revising salaries downwards and cutting down on costs, furloughing some staff
members, and seeking financial cushioning through loans. This factor has felt as a double-edged
sword as despite the measures that have been taken to ensure the business remains afloat, this has
been done at the expense of some employees who are now jobless.
3. Socialcultural Factors
These factors are related to the society and cultural affiliation of the market.
Socialcultural factors comprise beliefs, attitudes, lifestyle, education, ethics, and religion of the
people that the organization intends to provide services for. One critical socialultural factor that
impacts on operations and strategy of ECV is the literacy levels within the society. People who
have attained certain literacy levels tend to lead a certain type of lifestyle compared to those who
have not. This lifestyle accordingly leads to them acquiring distinct preferences for services
being offered to them. when an organization determines the literacy levels of its target market, it
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then adopts a strategy that will enable it to tailor its services to satisfy the needs of its customers
[ CITATION Fah20 \l 1033 ]. With a literacy level of 95 percent, the Anguillan society has
developed a unique taste for top-notch services that has made ECV to adopt strategies aimed at
delivering exactly what is needed. Furthermore, the Anguillan population comprises a mixture of
races including Whites, Hispanic, Blacks, Asians, and Mixed. This composition implies that
there is a mixture of cultural beliefs that the strategy adopted by the management of ECV needs
to take into consideration to ensure that no race is sidelined by offering services that collide with
its beliefs or cultural practices. Striking a balance to satisfy all the races while developing
strategies has proven to be a challenge for the management. However, the conceptual skills that
the managers possess have been instrumental in coming up with measures that satisfy every
customer inspite of their belief, attitude, or education level.
4. Technological Factors
As Drakes (2021) stated, technological factors are critical in reshaping management and
determining the direction that the organization takes to achieve the objectives. The current
bsiness world is experencing rapid changes in ters of technology and a need arises for respective
managements to ensure that their organizations are abreast with any recent technological
development that can help in creating and maintaining a sustainable competitive advantage. One
technological factor that has positively impacted on ECV is the use of the internet to market
itself, especially social media marketing. Organizations have realized several benefits as a resut
of incorporating social media marketing in their strategies. One crucial benefit is increased brand
recognition. By being available on social media, organizations makes it easier for potential
customers to find them and get immediate feedback when need arises [ CITATION Jay16 \l 1033
]. Increased brand recognition has a positive effect on sales and revenue and this has been the
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case at ECV. Automation of booking procedures and other crucial operations at the institutions
have also helped in streamlining services and making the customer experience better. This
change brought about by embracing technology has helped ECV to remain as one of the most
preferred Villas in Anguilla.
5. Environmental Factors
The factors considered here are the variables relating to the physical environment.
Environmental factors that can have an impact on an organization include the climate and the
weather, society’s perception of the enviroment, waste management laws, and other
enviornmental policies in the country or region of operations. In the Caribbean region, one
environmental factor that usually affects every sector is natural disasters. Natural disasters cannot
be controlled at all and the only remedy available for organizations is to take precautions aimed
at mitigating the lossess caused by these disasters. An example of the implications that natural
disasters have on the hospitality industry is Hurricane Irma. This hurricane occurred in 2017 and
led to the closure of all hotels in Anguilla. Some hotel facilities were also damaged during that
time and the management incurred unexpected expenses while repairing the damaged facilities
[ CITATION Tou17 \l 1033 ]. Such factors affect an organization negatively and if no urgent
mitigative measures are put in place, may even lead to the collapse of that organization.
6. Legal Factors
These factors refer to how the laws of the land affect the operations of an organization.
These factors may determine whether a business is permitted to sell certain services or products
to the customers. Consumer laws are an example of legal factors. These laws stipulate the
protective measures that are taken to protect customers from fraudulent or exploitative practices
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by organizations[ CITATION Tho16 \l 1033 ]. ECV has to ensure that any practice it engages in
does not violate any consumer laws lest it becomes answearable for its activities. The Consumer
Protection Act outlines what organizations are expected to do and what they are forbidden from
doing as a way of ensuring that the welfare of the consumers is looked after[ CITATION GOA15
\l 1033 ]. This factor is important as it ensures that instutions in the hospitality industry do not
engage in unscrupolous activities that may compromise the welfare of the customers.
CONCLUSION
The survival of any business relies solely on the strategies that the management has put in
place. Indeed, strategies cannot be developed blindly with no information on both the internal
andd external environments. Thus, there is a need to incorporate analysis that will help in
acquiring the necessary information to develop effective strategies. PESTEL framework has
proven to be a crucial approach that organizations can use to study their external environments
and gather important information that can be used to determine the best direction for them to take
as they seek to achieve the set goals and objectives. By gaining a deeper insight of the external
environment, it also becomes easier for a business to identify and exploit opportunities that can
help in further success. For ECV, PESTEL analysis is essential since it helps the management to
identify the specific factors that impact on its operations, either positively or negatively, and then
to formulate approaches aimed at helping it take advantage of the positive impacts and at the
same time, address the negative impacts of the external environment.
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References
Bush, T. (2016). PESTLE Analysis: Legal Factors Affecting Business. Retrieved from Pestle
Analysis: https://pestleanalysis.com/legal-factors-affecting-business/
DeMers, J. (2016). The Top 10 Benefits Of Social Media Marketing. Retrieved from Linkedin:
https://www.linkedin.com/pulse/top-10-benefits-social-media-marketing-jayson-demers
Drakes, C. (2021) Lecture 2: Management Essentials 1 [PDF]. Retrieved from University of
the West Indies Open Campus Graduate Programme Management and Educational
Leadership.
GOA. (2015). ANGUILLA LABOUR CODE, 2015. The Valley: Government of Anguilla.
Papia, F. A. (2020). Social Factors of PESTLE Affecting Businesses. Retrieved from The Strategy
Watch: https://www.thestrategywatch.com/social-factors-pestle/
Pressbooks. (2020). A Firm’s External Macro Environment: PESTEL. Retrieved from Open Text
BC: https://opentextbc.ca/principlesofmanagementopenstax/chapter/a-firms-external-
macro-environment-pestel/#navigation
Sammut-Bonnici, T. (2015). Wiley Encyclopedia of Management. John Wiley & Sons.
Shaw, A. A. (2018). Political Factors Affect Business Environment. Retrieved from Marketing
Tutor: https://www.marketingtutor.net/political-factors-affect-business/
Tourismreview. (2017). Hurricane Irma - The Impact on the Caribbean Tourism Destinations.
Retrieved from Tourism Review: https://www.tourism-review.com/hurricane-irma-hit-
caribbean-tourism-news10296
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UWI OPEN CAMPUS (2021). MGMT6202: MODULE 2 UNIT 4: Foundations of Decision
Making and Planning. University of the West Indies.
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The University of the West Indies Open Campus

Course Coordinator: Ms. Claudia Drakes

Due Date for Assignment:

Villas, Ani Villa Estate and Alegria Villa among others.

employees head for their annual leaves.

customer inspite of their belief, attitude, or education level.

preferred Villas in Anguilla.

same time, address the negative impacts of the external environment.

Drakes, C. (2021) Lecture 2: Management Essentials 1 [PDF]. Retrieved from University of

Sammut-Bonnici, T. (2015). Wiley Encyclopedia of Management. John Wiley & Sons.

Retrieved from Tourism Review: https://www.tourism-review.com/hurricane-irma-hit-

UWI OPEN CAMPUS (2021). MGMT6202: MODULE 2 UNIT 4: Foundations of Decision

Making and Planning. University of the West Indies.

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