Tools for Developing as a Global Manager

Businesswoman on the phone with a wall of country clocks behind her
GettyImages/ Dave & Les Jacobs

In my article, "Advice for Developing as a Global Manager," I encourage professionals to invest time and energy in studying the cultures of their out-of-country colleagues, team members, partners and customers as part of the formula for success. While face-to-face visits and actual immersion in foreign cultures are the best teachers, there are a variety of tools the developing global manager can employ to gain important context for these new arenas.

This post introduces a framework to help guide your initial foreign market research, P.E.S.T.E.L., where the letters serve as an acronym for: political, economic, social, technology, environment and legal. 

Dig Deeper with a P.E.S.T.E.L. Analysis:

Effective global managers strive to understand more than the superficial information about their client’s or colleague’s countries. While it is easy to identify the basics of a country or region beyond your company's home country borders, including population, demographics, economic size and growth, primary language and religions, it is important to dig deeper to better understand the region and people. The P.E.S.T.E.L. analysis is a tool that will help you organize your initial research efforts. 

The suggested questions by component are intended to help you jumpstart your analysis. You are encouraged to brainstorm with your colleagues to add additional questions in building out your P.E.S.T.E.L.

analysis. 

P=Political:

When attempting to understand the political nature of a country, it is important to take into account form of government, political history and current political dynamics and themes. Here are some starter questions: 

  • What is the prevailing style of government?
  • What is the structure of the government for executive, legislative and judicial.
  • What are the founding principles of the current form of government? (Review the nation's constitution.)
  • How stable is the government?
  • What are the various parties that vie for power?
  • Who is the ruling party and what do they stand for?
  • Who are the minority parties and what do they stand for? 
  • What are the big political issues of the day?

E=Economic:

The economy (free market, managed, government controlled) and economic structure of a country are closely aligned with the nation's political system and approach to governing. It is important to assess not only the current state and projections for economic growth, but to look at the forces and factors impacting growth. 

  • What are the core underpinnings of the economy? Is it a free-market, managed or hybrid?
  • What are the key statistics: size (gross domestic product); growth year over year and trend; employment trends.
  • What is the demographic mix? How are the demographics changing over time? What social issues are emerging as a result of demographic change? How will demographic shifts impact the economy in coming years and decades? 
  • What are the country's primary factors of wealth creation? Natural resources? Manufacturing? Services? 
  • Who are the nation's leading trade partners
  • Which countries is the nation dependent upon for import of natural resources and finished goods? 

S=Social:

Understanding the social structure and trends of a country is important context for conducting business. In this instance, the analyst is looking for a variety of indicators and insights into beliefs, fashions and trends. 

  • What are the dominant religions in the region? How do they impact daily life and business?
  • What are the core beliefs of the people in the nation? 
  • What are the visible customs of the individuals or groups in this nation?
  • What is the population of the nation particularly proud of?
  • How prevalent is class mobility in this nation? 
  • What holidays are celebrated?  
  • What are the current social trends?
  • How are changing demographics impacting social trends? 
  • What is popular in fashion, the arts?
  • What is changing versus prior eras?
  • What are the geopolitical stress points at present?
  • Is the area deemed safe or dangerous for foreign visitors?
  • How are foreigners viewed? 

T=Technological

The review of the technological factors of a region focuses on infrastructure, investment and capabilities. Increasingly, we look at a region's broadband and cellular infrastructure as proxies for technological maturity. 

  • What are the statistics around broadband and internet access and growth?
  • Is there a mature and evolving communications infrastructure for cellular?
  • What are the technology adoption trends in the region and by different groups?
  • Where is the country strong or taking a lead in research and development?
  • What technology initiatives is the government investing in or supporting? 
  • What technologies does the nation export? 

E=Environmental:

The environmental analysis focuses on understanding the natural resources and geography of the region and how they impact economic growth and social characteristics. 

  • What is the geographic environment?
  • What are the natural resources and resource limitations of the region?
  • What are the primary resource exports from the region?
  • What is the impact of industry on the environment in the country? 
  • What environmental challenges does the region face?
  • What is the investment rate and growth in new, "clean" technologies?
  • What aspects of the environment support economic growth?
  • What environmental or resource deficiencies require the country to import to meet basic needs for the population? 

Legal:

Assessment of the legal dimensions of a region range from evaluating the role of the judiciary in governing to understand the legal complexities of conducting business. 

  • What is the basis of the judiciary as expressed in the country's constitution? 
  • Are the courts active and powerful in society?
  • What is the basis of law in the country? 
  • What is the legal environment in the country? Complex? Corrupt?
  • What is the legal complexity of doing business in the country?
  • What is the regulatory environment in the country? 
  • Is the society litigious? Are disputes mostly settled in court? 
  • What is contract law like in the country?
  • Is the basis of business a contract or a handshake? 
  • Is the society respectful of property and intellectual property rights?
  • What is the nature of the employment laws? 

The Bottom Line for Now:

While the questions above are a gross subset of the many you can ask and answer for each of the P.E.S.T.E.L. components, you can see how the developing global manager or analyst will benefit by applying this framework. I encourage you to use my questions as thought-starters and to add-to and expand the list. Maintain an archive of these analyses for future reference and training, and allow others to add to and update the framework over time to ensure currency and relevance.