PESTEL (IV) : Technological Environment

Technology contributes to overall economic growth.

There are 3 ways in which technology can increase total output:
1. Gains in productivity
2. Reduced costs
3. New types of product.

Effects of technological change in organisations:
1. The type of products or service that are made and sold.

2. The way in which products are made (robots, new raw materials)

3. The way in which goods and services are sold. (internet)

4. The way in which markets are identified. (database system)

5. The way in which firms are managed. (IT encourages delayering of organisational hierachy, homeworking and better communication. Greater integration of buyer and suppliers.

6. The means and extent of communications with external clients. (financial sectors go electronic, PC banking)



Impact of recent technological change has potentially important social consequences, which in turn impact business:
1. Homeworking – once people have to be collected together to work in factory, home working is now becoming more important.

2. Knowledge work – Skills related to interpretation of sta and information processes are likely to become more valued than manual or physical skills.

3. Services – Technology increases manufacturing productivity, releasing human resources for service jobs which require greater interpersonal skills.


(source: BPP Learning Media)



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