Lesson 2:

INDIRECT ENVIRONMENT
FACTORS
QUARTER 1 – MODULE 3
  This environment is primarily

1. POLITICAL concerned with complex laws,

LEGAL regulations and government
ENVIRONMEN
T agencies and their actions
which affect all kinds of
enterprises in varying degrees.
  Thegovernment,
 POLITICAL
LEGAL
in improving the
ENVIRONME
NT standard of living
of the society.
  The general pattern of the
economy can be viewed from
2. ECONOMIC three dimensions:
ENVIRONMEN 1. The economic system
T
2. The general business cycle
3. The economic policies
  The main economic effect
 ECONOMIC is on business organizations
ENVIRONMEN today are usually classified
T as fiscal and monetary
policies.
  Deal with the use of
 FISCAL government spending and
POLICIES taxation to improve the
position of the economy.
  Refer to the use of
monetary instruments
 MONETARY
through the Central Bank of
POLICIES
the Philippines, to influence
the money in circulation.
  The way of life of the
people.
3. SOCIO-  They are made up of
CULTURAL attitudes desires,
ENVIRONMENT expectations, beliefs, degree
of education and customs of
the people.
  This comprises the
innovations and
4.
TECHNOLOGICAL improvements in
ENVIRONMENT methods, machines and
materials.
  Technology has considerable
impact on business by
enhancing competitive
4.
TECHNOLOGICA provision of a variety of
L products, efficiency of
ENVIRONMENT
products, mechanization and
automation of the
organizational system.
 PEST
ANALYSIS
  P – OLITICAL
PEST  E – CONOMIC
ANALYSI  S – OCIAL
S
 T - ECHNOLOGICAL
  Is a management method
whereby an organization can
PEST assess major external factors
ANALYSIS that influence its operation in
order to become more
competitive in the market.
  S – TRENGTHS
SWOT OR  W – EAKNESSES
TOWS  O – PPORTUNITIES
ANALYSIS
 T - HREATS
  These are factors found
SWOT OR within the business
TOWS
ANALYSIS environment in which the
organization operate.
  is a systematic
identification of these
SWOT OR factors and the strategy
TOWS that reflects the best
ANALYSIS
combinations of these
factors.
SWOT OR
TOWS
ANALYSIS