ExpertMedium2 marksMultiple Choice
ACCA · Question 07 · Syllabus A: The business organisation and its external environment
[Section A] A commercial agricultural firm is analyzing its external environment using the PESTEL framework. The government has recently announced a new subsidy program for farms that transition to zero-emission electric tractors, while simultaneously introducing strict penalties for excessive groundwater extraction. Under which PESTEL categories do these two developments primarily fall?
[Section A] A commercial agricultural firm is analyzing its external environment using the PESTEL framework. The government has recently announced a new subsidy program for farms that transition to zero-emission electric tractors, while simultaneously introducing strict penalties for excessive groundwater extraction. Under which PESTEL categories do these two developments primarily fall?
Answer options:
A.
Economic and Social
B.
Political and Environmental
C.
Technological and Legal
D.
Social and Technological
How to approach this question
Break down the scenario: Government subsidies = Political. Groundwater/Emissions = Environmental.
Full Answer
B.Political and Environmental✓ Correct
Government subsidies and taxation/penalty policies are classified as Political factors (though they have economic consequences). Regulations regarding emissions and natural resource usage (groundwater) are classified as Environmental (or Ecological) factors in the PESTEL framework.
Common mistakes
Classifying government subsidies purely as Economic. While they affect finances, the decision to grant them is a Political factor.
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