Pest Analysis as a Tool for Refining and Focusing Contexts for Information Systems Research

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ECRM 2007: 6th European Conference on Research Methodology for Business and Management Studies

Using PEST Analysis as a Tool for Refining and Focusing Contexts for Information Systems Research Guo Chao Alex Peng, Miguel Baptista Nunes
Department of Information Studies, University of Sheffield, Regent Court, Sheffield, S1 4DP, UK, Abstract It is common for inexperienced researchers and research students to aim at investigating very wide contexts such as countries (e.g. China, India, UK), regions (e.g. the Arab Countries) or even continents (e.g. Africa). Such studies in Information Systems (IS) are not only unrealistic and potentially unfeasible, but may result in findings that are neither significant nor meaningful. Research supervisors often face difficulties in explaining and resolving these common pitfalls in research proposals. This paper proposes the use of Political, Economic, Social and Technological (PEST, also often referred to as STEP) analysis as a tool to identify narrower contexts and focus research questions around feasible and meaningful regional contexts. It illustrates this process with the results of an analysis carried out as part of an ongoing PhD research project. The project aims to investigate the barriers and risks associated with the post-implementation of Enterprise Resource Planning (ERP) systems in Chinese companies. PEST analysis was used to define an appropriate region in China (i.e. Guangdong), as well as the type of company to be studied, namely State Owned Enterprises (SOE). This analysis was followed by a set of SWOT analyses in order to identify a suitable sector, namely the electronic and telecommunication manufacturing sector. The paper also shows how the researcher reviewed, compared and synthesised large amounts of literature and statistical data when constructing arguments and standpoints. This approach helped to develop a profound understanding of the Chinese context and has proved to be a valuable decision-making tool when selecting an appropriate Chinese region, a type of company and an industry sector in which to conduct the research. It resulted in the redefinition of the research question and in data collection and analysis that is more likely to produce useful, meaningful and generalisable findings. Keywords PEST or STEP analysis, Information System, Enterprise Resource Planning (ERP) System, China, Chinese Companies.

1. Introduction
“La prima tentazione dello studente è quella di fare una tesi che parli di molte cose. Se lo studente si interessa di letteratura, il suo primo impulso è quello di fare una tesi dal titolo La letteratura oggi. Dovendo restringere il tema, vorrà scegliere La letteratura italiana dal dopoguerra agli anni sessanta. Queste sono tesi pericolosissime. Si tratta di argomenti che fanno tremare le vene e i polsi a studiosi ben più maturi. Per uno studente ventenne si tratta di una sfida impossibile. O farà una piatta rassegna di nomi e di opinioni correnti, o darà alla sua opera un taglio originale e verrà sempre accusato di omissioni imperdonabili.1” Eco (1977)

The above quotation of the renowned humanist Umberto Eco reflects the general concerns of supervisors when having to guide their research students in focusing and placing boundaries on their research topics (Bell, 1993:15; Cornford and Smithson: 2006: 29-53) . Eco puts these concerns extremely elegantly. He states that inexperienced researchers and research students are always too ambitious and want to include a multitude of issues and topics in their studies. An ambition hat is well known by social sciences and humanities supervisors. He gives an example of an Italian literature research student. Eco suggests that such a student would first be tempted to choose a title such as: the literature today. When asked to focus, the student would probably choose something like: the Italian literature from the post-war to the

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