Revisiting Political, Economic, Social, Technical, Legal, and Environmental (PESTEL) Analyses

One of the many advantages and benefits of searching for and selecting a research topic is that we can acquire a surprising awareness and expand our knowledge about a wealth of potential topics.? Some of the categories of knowledge acquisition include the searching for and study of models, tools, and resources.? Some of our college courses have laser focus on a comparatively narrow set of objectives.? If we are studying trigonometry, for example, we can expand beyond the formulas and explore applications or the biographies of great mathematicians, but subjects such as Business Ethics and International Business inherently have more breadth and depth.?

Some of the most well-known academic models worth adding to your research repertoire include PESTEL, the Maslow hierarchy, Tuckman’s teamwork model, Porter’s Five Forces, SWOT (Strengths, Weaknesses, Opportunities, and Threats), and the?GLOBE?cultural project. ?The PESTEL (Political, Economic, Social, Technical, Legal, and Environmental) analysis method can be applied to many research topics to make sure that we cover those important six categories of thought. The Bright Hub Project Management (2025) website provides an interesting history of the?PESTEL?method. Unlike other famous business models such as?Maslow’s?hierarchy of needs,?Tuckman’s?teamwork model, and?Porter’s?Five Forces, the PESTEL analysis is not named after a researcher or professor such as Dr. Pestel. Similar to the?SWOT?analysis, but without a catchy “swat-like” mnemonic (unless we think of the mortar and pestle for cooking up a good recipe), the PESTEL analysis encourages business analysts to leave no stone or pebble unturned. Also, the PESTEL model has had an evolving history with predecessor models sporting “less memorable” acronyms such as ETPS for Economic, Technical, Political, and Social factors in the 1960’s. In the 1970's, the model evolved into STEP for Strategic Trend Evaluation Process and STEPE for Social, Technical, Economic, Political and Ecological. In the 1980’s and beyond, analysts have fashioned PEST, PESTLE, STEP, and STEEPLE analyses. Tis no wonder that the PEST version has been eradicated by the never-ending and ever-evolving tag line perfecting process of marketing minds.? Please click on the?Maslow’s?hierarchy,?Tuckman’s?teamwork, and?Porter’s?Five Forces, and?SWOT?analysis links for more information (especially if any of these popular models are new to you, or just vaguely familiar). ?The Global Leadership and Organizational Behavioral Effectiveness (GLOBE) project with country clusters and cultural constructs (dimensions) adds a layer of meaning that seems to deserve a category that stands alone in unique importance.? In one sense culture blends all of the other categories into an all-encompassing perspective.

Untouchable Topics

Politics and Religion are often considered “third rail” (untouchable) research topics, but the political environment in a prospective candidate country for possible corporate expansion or for continuing operations in a country that has suddenly or gradually become unstable is certainly worth looking at from a planning perspective.? Politics and religion are certainly good reasons to keep business and organizational plans company private or For Official Use Only (FOUO), but we have all witnessed ethical scandals that have led to litigation where company emails and other documents are subpoenaed for legal review with prosecuting and defending attorneys looking for evidence of wrong-doing or proof of due-diligence.? As “untouchable” as Politics and Religion can be, sometimes we are most intrigued and most passionate about sensitive and difficult topics – difficult in the sense of maintaining academic distance and an objective open minded research perspective.

Corporations competing in certain volatile sectors (for example, the environmental and energy-related industries) have a compelling need to address all six of the PESTEL factors (and maybe even the Religious dimension for PERSTEL analysis). Who knows? Maybe someone will call the model the Professor Piellusch PERSTEL analysis. We do have several countries with theocratic governments and apparently an increasing number of countries that don’t believe in the separation of church and state.? We certainly seem to have more local and global citizens who don’t subscribe to the separation of Religion and Politics.? Sometimes analysts have to carefully probe untouchable “elephant in the room” questions and topics.? Without getting too far afield from PESTEL or PERSTEL, ironically even Science and Environmental issues have even become increasingly politicized in the 21st?century.? Climate Change is still being politicized for example as some political critics oppose wind power for cosmetic reasons rather than scientific recognition of the decreasing supply of fossil fuels and the prescient view of Professor Hubbert and his Peak Oil theory.

Green Building

The?Sakarya University Journal of Science?published an interesting article in 2019 entitled?Strategic Factors Affecting Green Building Industry: A Macro-Environmental Analysis Using PESTEL Framework. According to Ulubeyli et al. (2019), green building (GB) has become politically and environmentally important if not essential for any company expanding operations where they need to construct a new factory.? Many companies have recently built or conceptualized new mega-buildings with solar panels on their rooftops. However, Ulubeyli et al. point out that GB has significant inertia to overcome in order to convince more and more countries and companies of the inherent advantages of GB for health, safety, comfort, and environmentally sound building. Globalization case studies of missteps abound in the area of expanding business into a new region.? One example would be Home Depot expanding into Japan.? Unlike the U.S. and Canada, Japanese homes tend to be small and the “do it yourself” home building culture does not seem to be strong in Japan.

During their PESTEL analysis, Ulubeyli et al. (2019) explored the impact and importance of six groups of factors. The Political subfactors include subvention (government subsidies), tax policy, political stability, and customs – macro-economic factors. The Economic subfactors are real estate prices, interest rates, exchange rates, inflation rates, and average income per capita – mid-range and micro-economic factors.?Ulubeyli et al.?analyzed the following Social subfactors: quality of life perception, customer needs and habits, education level, population growth rate, and demographics. The researchers also looked at the very important Technical subfactors of having qualified construction contractors, necessary materials, automation capabilities, innovation potential, and a qualified workforce.? Environmental subfactors include energy infrastructure, ecological sustainability, waste management, material recycling, geographic location, and environmental applications. Legal subfactors include environmental regulations, and LEED (Leadership in Energy and Environmental Design)?complications, consumer regulations, and any import barriers. Not surprisingly, the Ulubeyli ?team considered Technical and Environmental subfactors to be the most important.? Related topics include the recent dismantling of USAID programs and some of the catastrophic effects of the abrupt termination of USAID funding.

Esty and Winston (2006) make similar sustainability points to the Ulubeyli et al. (2019) article in their book entitled?Green to Gold: How Smart Companies Use Environmental Strategy To Innovate, Create Value, and Build Competitive Advantage.?For example, Esty and Winston point out that the new World Trade Center has been built to LEED standards. Etsy and Winston also note that IKEA has become a leader in the green space with their catchy “IWAY Evaluation Checklist,” which includes emissions, waste, chemicals, safety, child labor, working conditions, forest sourcing, compliance, and several other areas (p. 203). Green can indeed be golden with IWAY, PESTEL, and LEED leading the way forward.

According to the Green Building Education Services (GBES) website (2025), almost all organizations constructing new corporate buildings now strive to earn a LEED rating. These ratings have designations of Silver, Gold, and Platinum, which are awarded and monitored by the U.S. Green Building Council (USGBC). Being able to publicize Silver, Gold, or especially Platinum status is a marketing and environmental plus.? Ironically, unethical conduct always seems to appear as some companies and individuals have been charged with Greenwashing defined as making Green claims that are exaggerated or blatantly false.

Megafactories

The world has long been captivated by building vertical structures such as the Chrysler building, the Empire State Building, and the ill-fated World Trade Center in New York City. Dubai’s Burj Khalifa is currently the world’s tallest skyscraper. Saudia Arabia’s Jeddah Tower was scheduled for completion in 2020, but delayed by the pandemic. (Many construction projects have been delayed by the COVID-19 pandemic.) Perhaps more fascinating from the business point of view are the mega-factories emerging in carefully selected locations across the globe. According to visualcaptialist.com (2025), China is taking the lead with ion-battery factories of immense dimensions. China is also leading the world in adding solar panels on the rooftops of essentially all new factory buildings.

Concluding Thoughts

Perhaps one way to make the PESTEL analysis more relevant in 2025 is to rename the analysis to MESTEL and consider Medical issues – especially with a resurgence of global health issues with the dismantling of USAID. However, Ulubeyli et al. point out that the political factors of the PESTEL analysis focus on the macro-economic influences of the political environment. In other words, the PESTEL model focuses on the effects of the political climate and not the ideology such as liberal, conservative, democratic, or autocratic. Let us apply PESTEL analysis to the 2025 clouds and see through to blue sky ahead for skyscraper as well as factory operations.? Research topics are all around and the more we search for compelling and timely topics, the more we learn.

References

Bright Hub Project Management. (2025). A review of PESTLE analysis history and application.?https://www.brighthubpm.com/project-planning/100279-pestle-analysis-history-and-application/

CNN. (2018). Jeddah Tower: What does the world's next tallest skyscraper look like now??https://www.cnn.com/style/article/jeddah-tower-saudi-arabia-new/index.html

Esty, D. C., & Winston, A. S. (2006). Green to gold: How smart companies use environmental strategy to innovate, create value, and build competitive advantage. New Haven: CT: Yale University Press.

Ulubeyli, S., Kazanc?, O., Kazaz, A., & Arslan, V. (2019). Strategic Factors Affecting Green Building Industry: A Macro-Environmental Analysis Using PESTEL Framework. Sakarya University Journal of Science, 23(6), 1042–1055.?https://doi.org/10.16984/saufenbilder.474824

visualcapitalist.com. (2025). China is leading the charge: Lithium-ion megafactories in China to grow capacity 6X by 2020.?https://www.visualcapitalist.com/china-leading-charge-lithium-ion-megafactories/

Link to earlier LinkedIn version:

https://www.dhirubhai.net/pulse/pestel-versus-pestilence-michael-j-piellusch-ma-ms-dba/?published=t