Business Environment: Pearson PLC Analysis and PESTLE Framework

This report provides a comprehensive analysis of Pearson PLC, a multinational education and publishing company. It begins with an introduction to the business environment, highlighting both internal and external factors that influence organizational operations. The report then delves into the governance and structure of Pearson PLC, including its history, organizational structure, board of directors, and leadership team. The importance of PESTLE analysis for business organizations is evaluated, explaining how it helps identify significant changes and develop effective strategies. The core of the report applies the PESTLE framework to analyze Pearson PLC's external environment, examining political, economic, social, technological, environmental, and legal factors. Each factor is discussed in detail, illustrating its impact on the company's strategies and long-term objectives. The analysis covers aspects like political stability, economic growth, social trends, technological advancements, and environmental awareness, concluding with a summary of the key findings and their implications for Pearson PLC's future.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Task 1- Governance and structure of Pearson PLC.....................................................................3
Task 2- Importance of PESTLE analysis for business organizations..........................................4
Task 3- PESTLE framework in order to analyse the external environment of Pearson PLC......5
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment suggests external factors, forces and establishments that are on the
far side the control of the business, and they affect the operation of the business enterprise. It
includes competitors, suppliers, customers, government and the factors related to social, political,
environmental, technological, etc. Generally the business environment has been classified into
two categories i.e. internal and external (Belas, 2019). With the help of analysis of effective
business environment internally as well as externally, organization is able to identify its
opportunities and threats, helpful in assembling resources, assist in planning and policy making,
etc.
Pearson PLC is a multinational education and publishing company having their
headquarter in London. It is the largest education company and book publisher as well. Company
owns the GCSE examination board for the UK (Hamilton, 2018).
This report will consist of the governance and structure of Pearson PLC company along
with the importance of PESTLE analysis in context of company. Apart from this, the study will
also highlight the factors influencing the external factors which affect the Pearson PLC
organization effectively.
MAIN BODY
Task 1- Governance and structure of Pearson PLC
Pearson PLC is a British company handles the education and publishing work since 1920.
The company is the largest book publisher and education company in the world. The company
was founded by Mr Samuel Pearson in Yorkshire. The company has its monopoly within the
market place. The company provides content in diversified channels like online books and
services. Organization has its presence over 70 countries all over the world and having more than
22,500 employees as of now. Pearson PLC announces adoption of new structural changes along
with the appointment of new leadership team. Under the new structure- company would organize
around three global lines i.e. professional, higher education and school. Divide their structure
according to three geographic market categories i.e. core, North America and growth. The board
of directors of Pearson PLC includes Sidney Taurel as chairman appointed on 1 January 2016,
Andy Bird is the CEO of the company appointed on 1 May 2020, Dame Elizabeth Corley
appointed on 1 May 2014, Sherry Coutu appointed on 1 May 2019, Linda Lorimer appointed

on 1 July 2013, Michael Lynton appointed on 1 February 2018, Graeme Pitkethly appointed
on 1 May 2019, Tim Score appointed on 1 January 2015 and Lincoln Wallen appointed on 1
January 2016 as non-executive directors. Organization describes that board of directors and
executive leadership bring effective, strong and diverse leadership to various aspect of the
business (Kotaskova, 2019). The leaders are highly committed towards creating long-term
sustainable value for all shareholders, stakeholders which also gives advantages to the society
and world as well. With the effective direction of board of leaders, the company employees is
full of ideas and innovative ways to help millions of person by providing effective learning
content to them.
Task 2- Importance of PESTLE analysis for business organizations
Pestle is an administration model that is used to analyse the external environmental
factors which affects the working of project within the organization, the brand image or value
and the overall functioning of the business externally. Although such kind of factors which affect
the company is not in the control of the organization that is the reason they are known as external
factors. Pestle stands for political, legal, social, economical, environmental and technological
factors. It is basically a tool in order to evaluate the market surroundings or simply just for
following the geographical area situations effectively (Dvoroková, 2017). Though these factors
are not in control but does influence decision-making behaviour of the organization. The external
threats that any establishment potentially faces has been analysed with the usage of this tool.
Pestle analysis plays a significant role in the growth of the businesses. It is helpful in
various ways whether it is an expansion of existing business activities or product line or opening
a new company at new location. It is the key in marketing strategies and planning. With the help
of following points the importance of Pestle analysis has been illustrated:
1. PESTLE analysis can help every business owner in order to identify momentous changes
in terms of political, economical, social, environmental, etc. at the time of start up or
establishing new organization.
2. It helps the companies in order to make effective strategies which helps while planning to
expand their business nationally as well as globally (Oliver, 2018).
3. Internal environment can be handled by the leaders and managers of the company
efficiently but the external factors are not at all in control of company so in order to

overcome from such situations and work according to them efficiently, PESTLE analysis
has been highly important for the company before making any strategies related to the
functioning of the organizational which helps ultimately to achieve desired outcome
(Thompson, 2017).
There are various advantages of Pestle analysis for any organization are: Deeper understanding: In order to achieve deeper understanding of external factors,
Pestle analysis helps in making them easy to understand the factors that effect the
business environment in efficient manner. At the time of development of new products,
this analysis helps in increasing strategical thinking and deeper understanding of various
factors such as advanced technological changes, consumer laws, etc. which affects the
product launch within the market space. Cost effectiveness: Pestle analysis includes certain programs which can help the
organization while managing stimulation and responses. Time and effort are the only cost
of the PESTLE analysis (Klevtsova, 2017). Exploit opportunities: It helps in diffusion of opportunities that arises during certain
period due to external factors. The lower interest rate is an economic factor that creates
an opportunity to enhance the demand.
 Develop alertness: This particular analysis helps teh organizations to become prepared
about the possible threats for their business activities which arises time to time in order to
handle external factors (Ceil, 2018). For instance any changes arises in the market space
like the new and innovative invention is a threat if that particular company is not adapt
the changes in their working style or if would require some time to adopt such changes
within their working culture or in products as well. Hence, at such time company may
lose its market share to its competitors.
Task 3- PESTLE framework in order to analyse the external environment of Pearson PLC
Application of PESTLE analysis can help the Pearson PLC in order to identify major
external environmental factors that helps the company in order to shape the competitive analysis
and strategy in order to support the decision-making process within the company (Eisenberg,
2018). As Pearson PLC looking forward to expanding their business activities, abilities and core

group susceptibility while conducting the pestle analysis is highly significant for developing
strategies in order to achieve long-term objectives. Political factors: In this complete analysis, political factors utilize a strong influence on
the long-term sustainability and lucrativeness of Pearson PLC. The company is present at
various global locations which makes it difficult to adopt changes in political
environment of various different countries. In political environment the strategy of
gaining profit or success in dynamic international business environment in order to
diversify systematic risks of the company. High political stability provides a stable and
friendly business environment to Pearson PLC along with predictable market growth
trends. Frequent changes in government policies harm business performance. With the
help of Pestle analysis Pearson PLC able to study the current market trends as changes in
government may alter the priorities towards the development of different industries.
Bureaucracy and corruption negatively influences the business environment. The
corruption can influence the Pearson PLC business operations through contracting,
licensing, fraudulent deals, etc. On the other hand, entering into the high taxation level
will directly influence the profitability of Pearson PLC (Perera, 2017). Hence, the
organization have to build their strategies while considering the political factor which
influence the Pearson PLC and prepare strategies accordingly in order to achieve
organizational goals. For instance, Pearson PLC is present in different countries, each
having its own political rules. Growing instability in political environment can effect the
other industry growth in order to limit the opportunities available to Pearson PLC. Economic factors: Pestle analysis helps the Pearson PLC in order to analyse economic
factors such as interest rate, foreign exchange, inflation, saving rates etc. as they
influence the overall economic environment of the country. A detailed examination of
these factors affects the growth of particular organization as well as industry as a whole.
The economic development of country directly influences the organizational
performances. With the growth in economy, Pearson PLC identifies various growth and
expansion opportunities. For instance, high GDP growth rate influences the customers in
order to spend more on offered products by the Pearson PLC. The organization will able
to carefully analyse the interest rate and borrowing ability which helps in creating an
attitude of company towards investments done by Pearson PLC. It also includes the

labour market conditions which determine the wage rates and supply of skilled workforce
within the establishment after complete analysis through this framework. This also helps
in global expansion of company strategies which are influenced by financial market
efficiency in which the company operates. The business practices adopts by the company
are influenced by the latest economic structure. Social factors: Pearson PLC considers various social factors in order to conduct macro
environmental analysis such as equality and power distance which describes the
acceptance of hierarchy and income inequality. The increasing inequality in many
countries is altering the power structure which has serious implications for Pearson PLC .
Changes in demographic patterns also influences the organization like migration trends,
ageing population, etc. have importance for company. The organization understands the
people general attitude towards the migration as it able to influence firm ability to bring
international managers to their host countries with the help of social factor analysis with
the help of Pestle (Mizsey, 2017). Culture is considered as important variable for the
company. The observation of social class stratification is also important for the company
in order to fulfil the needs and perception of their potential customers and their
employees as well. Social factor related to online shopping trends also enhanced the
working of the company in order to enhance their profit margin by providing their
services even at the home of the consumers. While knowing the spending patterns and
behaviour of customers, the company is able to strategic their things effectively. For
example, the marketing department of Pearson PLC can use the information recover from
social environmental analysis in order to target customer groups and enhance the appeal
of offered products to their potential customers. Technological factors: The rapid changes occur in technological advancements helps the
organization in order to strategize their planning in order to achieve their long term
objectives and goals through effective decision-making. Technological factors which
influences the Pearson PLC is through social media marketing which helps the
organization in order to leverage the opportunities offered by social media marketing in
order to improve the business performance. For example, company carefully consider the
technological innovations and development level to stay ahead of the competition. The
adoption of new technologies has lessened the life cycle of new product development. In

order to sustain their position, Pearson PLC also have to develop new products according
to the complete market analysis. Organization is able to enhance their market share by
focusing on the emerging technological innovations with the effective analysis of Pestle
framework. Environmental factors: The growing environmental awareness and changing climatic
situations made it an important part of framework in order to analyse the working style of
the organization. Complete study about the environmental issues has been significant for
the Pearson PLC in order to provide their best services which avoid any undesired
circumstances effectively (Tlegen, 2018). With the help of effective recycling and waste
management practices, renewable technologies, complete analysis of weather and
climatic conditions, adoption of green business practices and offering of eco-friendly
products, complete acceptance of environmental regulations to avoid social depletion
helps the Pearson PLC to identify problems related to the environmental factor and
necessary changes needs to be taken in order to avoid further losses for the company ans
environment as well. For instance, Pearson PLC has adopted various norms to protect
their urban area through effective waste management activities.
 Legal factors: Pearson PLC follow the employee and labour health and safety laws in
order to make their firm a comfortable and happy place to work with. With the complete
study about legal factors that needs to be followed, the organization have to adopt certain
strict laws related to labour safety in order to make the brand image in the eyes of their
employees as well as within society. With the effective study of consumer protection
laws Pearson PLC is able to ensures certain quality standard and protect their consumers
from any fraudulent practices. Along with the effectual property regulations, company is
able to protect their company's patent and valuable ides from other competitors. Without
studying this factor, company might lose the competitive advantages which may result in
weaken the position of the organization in market place. For example, Pearson PLC
adopts anti-discrimination laws in order to avoid employer harm as well as the decrease
in brand image.
Thus PESTLE model is an important tool which includes a detailed analysis of external
environment factors that shape the business environment as a whole. From political factor to

legal factor, each individual factor open up various variables which influence the strategic
decision-making process of Pearson PLC.
CONCLUSION
From the above report it has been concluded that business environment affects the
business enterprise effectively with the proper study of internal and external environment
analysis. For the company like Pearson PLC which is the world-famous and largest publishing
and education company has to identify opportunities and know their potential threats from the
effective evolution of external analysis which has been describes with the help of PESTLE frame
work or model in order to give detailed and complete information about the company along with
certain measures taken by the leaders and managers in order to take improvement of actions if
required. This study includes the PESTLE analysis of the company along with practical
examples in order to describe the concept in detail in order to present complete knowledge and in
depth learning of the given task.

REFERENCES
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Online
Pearson, 2021. [Online]. Available Through:
<https://plc.pearson.com/en-GB/company/leadership>.
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