PESTLE analysis & situational audit

PESTLE Analysis

Welcome to our page on Pestle Analysis


PESTLE analysis & situational auditFor a detailed overview of the PESTLE Analysis

PESTLE Analysis – History – Introduction – Templates – HR example – Schools & Education


PESTLE is an acronym for

PoliticalEconomicSocialTechnologicalLegal and Environmental factors,

which are used to assess the market for a business or organizational unit strategic plan


History of the PEST/ PESTLE Analysis

So where did the term PEST or PESTLE derive? What were its’ origins?

The term PESTLE has been used regularly in the last 10+ years and its true history is difficult to establish. having sad this our extensive research and literary search has uncovered a trail.

Francis J. Aguilar

From our research, the earliest know reference to tools and techniques for ‘Scanning the Business Environment’ appears to be by Francis J. Aguilar (1967) who discusses ‘ETPS’ – a mnemonic for the four sectors of his taxonomy of the environment: Economic, Technical, Political, and Social.

Shortly after its publication, Arnold Brown for the Institute of Life Insurance (in the US) reorganized it as ‘STEP’ (Strategic Trend Evaluation Process) as a way to organise the results of his environmental scanning.

Thereafter, this ‘macro external environment analysis’, or ‘environmental scanning for change’, was modified yet again to become a so-called STEPE analysis (the Social, Technical, Economic, Political, and Ecological taxonomies).

In the 1980s, several other authors including Fahey, Narayanan, Morrison, Renfro, Boucher, Mecca and Porter included variations of the taxonomy classifications in a variety of orders: PEST, PESTLE, STEEPLE etc. Why the slightly negative connotations of PEST have proven to be more popular than STEP is not known. There is no implied order or priority in any of the formats.

Some purists claim that STEP or PEST still contain headings which are appropriate for all situations, other claim that the additional breakdown of some factors to help individuals and teams undertaking an environmental scan.

Quite who and when added what elements to the mnemonic is a mystery, but what we do know is that the actual order and words contained are common to certain parts of the world and streams of academic study. The term PESTLE is particularly popular on HR and introductory marketing courses in the UK. Others favour PEST, STEP or STEEPLE.



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