Explain why an understanding of environmental/external (PESTLE) factors is important for all organizations. To run a successful business, it is very important to conduct a background check. on the external environment of this particular industry. PESTLE analysis is widely used to study the political, economic, social, technological, legal and environmental influences of expanding businesses. This helps in decision making and also allows one to become more aware of competitors' movements. PoliticsPolitical factors affect businesses in all types of industries and can have a significant impact if there is a change in government or policies. Changes in government spending or the closure and opening of large businesses are hugely dependent on the UK's international relations with other countries. For example: the accession of new members like Poland can create new business opportunities and have similar effects on EU regulations. Legal changes are closely linked to political changes because laws are frequently changed in a wide range of areas, for example:• Type of government and stability• Freedom of the press, rule of law and levels of bureaucracy and corruption• Trends in matters of regulation and deregulation• Social and labor legislation• Tax policy and trade and tariff controlsEconomicEconomic changes are directly linked to social changes. Business results are associated with a fluctuating economy with a series of general booms and busts. All businesses benefit from an economic boom and lose out in a recession. Other changes in the economy, such as changes in interest rates, wage rates, and the rate of inflation (i.e. general increase in prices), directly affect the results from various industries. Businesses are always willing to take risks to grow...... middle of article ......eory/external-environment/pest-analysis.html#axzz2xmGA7LDr (accessed April 2014)PEST Analysis , 2013 [online ] available at https://depts.washington.edu/oei/resources/toolsTemplates/PEST_analysis.pdf (accessed April 2014) The Guardian, 2013 [online] “Hotel and restaurant boom helps to economic recovery” available at http://www .theguardian.com/business/2013/may/28/hotel-restaurant-boom-enomic-recovery-cbi (accessed April 2014) PEST [online] available at http ://www.oxlearn.com/arg_Marketing-Resources-PESTLE ---Macro-Environmental-Analysis_11_31 (accessed April 2014)Jais business blog [online] 2013, http://jaisbusinessblog.weebly.com/pest-analysis .html (accessed April 2014)Business week daily, [online] 2013, PEST Analysis [online] available at http://www.businessnewsdaily.com/5512-pest-analysis-definition-examples-templates.html ( consulted in April 2014)