Unit 18 - Global Business Environment

This report analyzes the key factors that drive global commerce and trade, the strategic challenges faced by organizations, and the influences of globalization on organizational governance, leadership, structure, culture, and functions. It evaluates the impact of these factors and provides specific examples to support the analysis. The report also discusses the risk and diversification strategies and the supply chain flow that organizations can adopt to overcome these challenges. The Hofstede's culture dimensions theory is used to evaluate the influences of globalization on organizational governance and leadership, structure, culture, and functions.

Unit 18 – Global
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY .................................................................................................................................1
P1 Examine key factors of cost, market, environment and competition that drive global
commerce and trade....................................................................................................................1
M1 Critically analyse the impact that key factors have upon the global business environment
in terms of opportunities and challenges.....................................................................................2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples..................................................................3
M2 Evaluate strategic challenges in context of risk and diversification strategies and the
supply chain flow. ......................................................................................................................5
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions...................................................................................................5
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
.....................................................................................................................................................7
M3 Critically evaluate influences of globalisation in application to appropriate theories and
models relating to organisational structure and culture..............................................................8
P5 Evaluate the different ways decision making can work effectively in a global context........8
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.......................................................................................................9
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome.......................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The globalisation is defined as the way in which it helps the business organisation to
connect with different countries by taking trade and technology into consideration. This is defied
as the process of interaction and integration among the people, organisations and government all
over world wide. The business organisation have a ability to communicate and connect with
other customers in an easy and effective way. This also helps the business organisation in
conducting activities at a international level. It is very important for the business organisation to
be aware of the environment and understand the market in order to expand in other countries.
This is the report which is based on SASOL company which is the fast growing energy and
chemical organisation. The company wants to expand its market in a international level.
(Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018). The various topic which will be covered
in this report are the various key factors which drives global commerce and trade, complexities
and challenges which might be faced by the organisation, different ways in order to expand
market.
MAIN BODY
P1 Examine key factors of cost, market, environment and competition that drive global
commerce and trade.
It is very essential for the company to consider the various factors in order to expand the
business at a global level in an effective way. The various factors which drive the global
commerce and trade are discussed below:
 Technological drivers- it has been analysed that the technological factors helps the
organisation to shape and set the foundation for the innovative globalisation. It is
identified that the technology plays a vital role in the expansion of the organisation in
order market at global level. The globalisation provides with the easy way to connect to
the international market. This is because of the digital platforms and new technology in
the world. For example, it has been identified that the digital marketing is one of the best
way in which the company is able to attract customers at global levels and is able to
connect to them. This also helps the company in reducing the cost.
 Political drivers- it has been identified that the politics can also drive to the global
commerce and trade. The various politics aspects allow the company to conduct their
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business at a global level. Liberalised commerce rules are support the markets to lead for
lowered the tariffs and prevent the foreign direct investment globally World trade
organisation are examine this things, that all countries are follow the traffic rules in right
manner, so that the business is able to conduct in the different countries defectively.
 Market drivers- it is very important for the organisation to analyse this factors which
have a very beneficial aspect for the growth and development of the business
organisation. The market provides various opportunities to develop the business in the
market effectively. In order to expand the globalisation play a major role where the
company is able to be competitive and make their presence within the market. Along
with they also assist the customer by providing lost of variety, they can use global
marketing channels and movement the marketing in some extent to choose the
internationalization. (Hacioglu, U. ed., 2019)
 Cost driver- the cost also impacts in the globalisation where the company is able to offer
the various products and services in the other places as well. As the cost drivers lead to
give the opportunity for the organisation to build at a global scale for the high product
development cost. The companies are able to maintain cost and in order to reduce cost the
companies go for international trade . This is the driver which brings commerce and trade
in an effective and coefficient way.
 Competitive drivers- it has been identified that as the competition is increasing at a
global level which is considered as the key driver and becoming important for the
organisation to choose for the international trade. As the strong independence among the
various countries and foreign direct investment actions are been supported by the various
aspect. As there is competition within the market which allows the companies to make
their presence internationality and this declines in the cost of the products or services
which increase the profits margins for the business enterprise. Due to the computation
companies are focusing of adoption of new technology in order to fulfils the social
responsibility and attract customers. (Ciacci, A., Ivaldi, E. and Soliani, R., 2021)
M1 Critically analyse the impact that key factors have upon the global business environment in
terms of opportunities and challenges.
As it is identified that the various key factors have their impact upon the business
operations while working at a global level. As the globalisation is helping the environment in
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order to spread over the new technology worldwide. As it is identified that due to technology the
company cane expand its market in an effective manner. In context of SASOL as the company
needs to expand its market at global level where the company needs to consider the cost drivers,
market drivers , technological drivers etc. it is identified that technology play vital role in the
expansion and making presence in the international market.(Chukhray, N.I. and Mrykhina,
O.B., 2018)
P2 Explain the complexity of strategic challenges faced by organisations when operating in
a global environment supported by specific examples.
It is very important for the business organisation to analyse the various external factors
which can impact the organisation and its operational activities. There are very uncertainty and
the various aspect such as in nature and the environment with the other countries. The
environment matter a lot for the organisation which need to be analysed in order to have the
growth and success of the business organisation. In order to consider the external environment it
is analysed that the company can adopt the PESTLE analysis model which is essential for the
company in expanding at a global level. This is the model which is used in order to understand
the external opportunities and in order to analyse the various policies which need to be
considered in order to expand in other country. The various factors which can influence the
SASOL company are mentioned below: Political- This is the factor which is related to the various government policies which
need to be followed by the organisation. It is very important for the SASOL to identify
the government policies and interference within the industry. There are various elements
included such as trade restrictions, rules and regulation, policies etc. It is very essential
that the company is able to identify the taxation, trade policies within the country in order
to conduct business in a smooth and effective way. Also the company to be understand
with the trade restrictions and tariffs fees in order to have the foreign trade regulations to
conduct business. This is the factor which can impact the SASOL in their budgets and
other aspect. (Nantembelele, F.A. and Gopal, S., 2018) Economical- This is the factor which is related to the impact of the direct performance
within the world to the operational activities and business enterprise. Such elements
incudes, taxation, inflation rate , interest rates, GDP etc. it is very essential for the
SASOL to analyse and identify the inflations and interest rates in which ever country the
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company needs to expand its market. It is very important that the company identify the
employment rate level so that the company is able to conduct the business operations
effectively and efficiently. (Sinha, D. and Chowdhury, S.R., 2021 ) Social- This is the factor which is related to the surrounding and the company needs to
fulfil their social responsibility in order to conduct the business in the ethical way. It is
identified that there are various elements such as the customers preferences, attitude,
behaviour. As in context of the SASOL the company need to analyse the market and the
people living around in rider to have an adequate working operations. This factor can
influence the company as if people are not ready to accept the products of the company
because of the cultural aspect this can affect the organisation in numerous ways. Technological- This is the factors which plays a major role in the expansion of the
organisation. This is related to the innovation and development within the world which
can influence the business operations. Such elements include artificial intelligence,
digitalisation etc. in order to expand the market for the SASOL the company needs to
adopt to the latest technology in order to attract customers. It is essential that the
company focus on the development of the applications which will assist customers
effectively and enhance the brand loyalty. (Subramaniam, C., Choo, L.S. and Johari, J.,
2019) Legal- As this is considered as the most important factor which need to be considered by
the company in order to expand at a global level. As there are various legal aspect and
this differ from country to country. The changing rule and laws within the local market
need to be considered so that the company is able to conduct the business operations
effectively. It is very important for the company to keep their employees safe by
considering the employment safety act .
 Environmental- This is the factor which is related to the impact of the nature and
surroundings over the business operations. Such elements include climate, weather
conditions, sustainability etc. as the company SASOL is operating with the energy and
chemical it is very essential for the company to reduce the carbon footprint and adopt the
eco friendly techniques in order to be sustainable.
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M2 Evaluate strategic challenges in context of risk and diversification strategies and the
supply chain flow.
It is very essential for the business organisation to have the strategic management within
the company in order to achieve the goals and objectives effectively and efficiently. In order to
reduce the risk and diversification strategies the company needs to manage its supply chain flow
to achieve targets and the growth of the company. It is identified that if the company is able to
manage the conventional supply chain flow which will help the organisation to overcome with
the problem of risk. (Chawla, D. and Joshi, H., 2020)
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
The globalisation assist the business organisation to increase the interaction between the
different culture and in order to hire the talented workforce in order to achieve the growth and
success within the business Enterprise. It has been identified that the culture has a influence
which helps the company to hire the right candidate for the right job title. The globalisation
impacts the business enterprise in both the ways which is positive and negative. As
communications and technology can help the company in order to become effective and efficient
. It is very essential for the company to have a strategic planning in order to handle the business
operations in the different countries effectively. As it is analysed that the governance can impact
the organisation in a direct or indirect way. It helps to spread the new ideas , tools, attitudes,
social networks and many more which affect direct to the governance.
Here in order to understand the the influences of globalisation on organisational
governance and leadership, structure, culture and functions the Hofstede's culture dimensions
theory can be considered which is s framework used to understand the differ net cultures across
the differ net countries and in order to identify the ways SASOL is considering the business
operations across the different cultures. Along with this procedure is used to separate between
the different national and global culture and measure their effect when setting their business.
Hofstede's culture dimensions theory is based on six concept which assist to specify the culture
which are recorded below:
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 Power distance index- this is the index which assist the company to measure the
distribution of power and wealth between the people in a culture, business organisation or
the nation. This is defined as the relationship between the authority and subordinates.
This is the dimension which is concerned with the higher or lower level of power given to
the individual within the organisation. In context of the SASOL it has been identified that
company adapts the inequality and encourage the bureaucracy which shows the high
rank and authority. (Cortés-Pérez, H.D., Escobar-Sierra, M. and Galindo-Monsalve, R.,
2020)
 Masculinity vs Feminity- This is defied as the procedure which is retabled to the
difference between the gender basis. It is very important for the organisation to adopt the
culture where they are both male and female. In order to spend the business in the
international market it is very important fr the company to adopt the culture where the
females are also given with the equal right in order to participate within the decision
making of the organisation.
 Individualism- This is the dimension which is related to the individuality but it is
identified that the organisation believe that team work is important where the individual
interest can lead to the team coordination in achieving the goals and objectives of the
business organisation. This is the culture where the ideas of an individual can meet up in
order to achieve the growth and success of the business s enterprise. (Madsen, H.L.,
2020)
 Uncertainty avoidance index- This is the elements which is related to the the unusual
situation which can be presented by the employees of the business enterprise. This is the
factor or the culture where it helps in identifying the tolerance of the workforce within
the company. This helps in identifying and making preparation of workforce to handle
the tough situation which can arise at any point of time. Long term orientation- This is the culture where the company focus in being long term
oriented in order to achieve growth and success. In order to maintain a strong relationship
and allow the employees to work effectively and enhance their productivity this can be
followed by the SASOL in order to achieve growth and success. The company is able to
analyse the performance of employees in order to be successful within the international
market in which the company is expanding. (Jehanzeb, K. and Mohanty, J., 2018)
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P4 Evaluate the influences of ethical and sustainable globalisation on organisational
functions.
It is very important for the organisation to have the ethical and sustainable values in order
to conduct the business operations in an effective way. It is essential that the SASOL company is
able to sustain for the long term growth by have sustainability in term of financial and the growth
of the company. The ethical practices will help the company to be aware of the various aspect
and all the taxes are paid and the company is working in a sustainable manner to achier growth
and success. SASOLI organisation need to work in harmony with the environment and try to
avoid any ethical implications that may help to increase new techniques and technology.
In order to understand this the model can be used known as McKinsey 7' s model which
will help in order to understand the differ net strategies which need to be adopted in order to
have an effective and efficient working. The various element of the model is discussed below in
context of SASOL:
 Strategy- this is related to the strategy which has ben adapted by the company in order to
achieve the goals and objectives. It is very essential that SASOL organisation is able to
adopt the right strategy in order to achieve the goals and objectives.
 Structure- the structure of the organisation plays a vital role in performing the task
effectively. In order to motivate employees the company need to adopt the structure so
that the working environment is maintained and people are able to understand how the
goals and objectives will be archived within the organisation.
 System- this is defied as the process of the company where the business operations are
conducted . The day to day activities of the company need to be worked in a smooth way
so that the company is able to achieve growth and success. (Sawalha, I.H., 2020)
 Skills- this is defied as the skills of the employees which help the organisation in order to
have growth and development. It is very important for the managers to focus on
developing the right skills within the employees in order to archive the targets of the
company.
 Staff- the staff is the workforce of the company. They are considered as the most
essential asset which helps in achieving the goals of the business organisation. It is
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important that the company is able to hire the right and talented workforce in order to
conduct business.
 Style- this is defied as with the appropriate leadership style which need to eb adopted by
the company in order to have the effective flow of the communication and as well as the
better performance of the company.
 Shared values- This helps the company in order to have the core values which need to be
followed by the company to other to have an ethical way to conduct the business
activities.
M3 Critically evaluate influences of globalisation in application to appropriate theories and
models relating to organisational structure and culture.
The globalisation helps the business Enterprise to enhance their productivity in the
international market. It is very essential that the company is able to adopt the strategic structure
within the company so that they are able to achieve growth and success within the international
market.
P5 Evaluate the different ways decision making can work effectively in a global context.
It is very important for the business organisation to identify the different ways in which
the company can make better decisions on order to expand the market at global level. The
different strategies can help the company to make the strategic decision in order to expand the
market in an effective and efficient way. The various different ways which can help the
organisation to make and work effectively in a global level is discussed below:
 Identify the decisions- This is the first most important aspect which need to be
considered by the business organisation . It is essential that the company is able to
identify the clear problems so that company can make right decisions.
 Gather the information- This is another way in which the company need to gather the
various market information in order to work in an effective and efficient way at a global
level. Through the relevant information the company is able to make an effective
decoction which helps the organisation to achieve growth and success.
 Identifying the best alternative- Also, identifying the best possible solutions to the
various issues which might be faced by the organisation. This plays a major role in the
effective decision making for the SASOL where the company is able to bring
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effectiveness and best possible pathways for the growth and development of the
company.
 Taking necessary actions- After conducting the good research and the company needs to
take the necessary actions where the company need to achieve their goals and objectives
for the company.
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.
In order to enter into the new market , it is very essential for the company to serve to the
local market in order to choose the best possible routes of conducting the business in the
international market. There are various routes which can be adapted by the company in order to
expand their market which are mentioned below:
 Selection of the export system- This is the very most important aspect where the
company need to select the most appropriate export system which can be conducted in
order to expand the market.(Mohapatra, M., Madan, P. and Srivastava, S., 2020)
 Foreign direct investment- this is the strategy which can be adopted by the business
organisation in order to reach the global market. The company can adopt the partnership
with the other companies which are already operating in abroad.
 Licensing strategy- This is the strategy which requires a huge investment. This is
considered as the international engagement in which two or more parties are involved.
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome.
There are various barriers for the company which can be challenging for the company
and they need to overcome with those challenges. In order to remove the language barriers in the
international expansion the company can provide the training to employees so that they can be
trained.
CONCLUSION
From the above report it has been concluded that in order to expand in the global market
it is very essential for the company to consider the several factors which has a influence over the
business operations. It is very essential for the SASOL company to conduct the external analysis
in order to identify the impact of the various factors. There are various barmiers and the drivers
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which influence in the globalisation. In order to overcome with the barriers the company need to
adopt the various ways in which it can make better decisions.
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REFERENCES
Books and Journals
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Hacioglu, U. ed., 2019. Digital Business Strategies in Blockchain Ecosystems: Transformational
Design and Future of Global Business. Springer Nature.
Ciacci, A., Ivaldi, E. and Soliani, R., 2021. A Potential Business Environment of Smart Cities: A
Subjective Approach. In Strategic Outlook in Business and Finance Innovation:
Multidimensional Policies for Emerging Economies. Emerald Publishing Limited.
Chukhray, N.I. and Mrykhina, O.B., 2018. Theoretical and methodological basis for technology
transfer from universities to the business environment. Problems and Perspectives in
Management, 16(1), p.399.
Nantembelele, F.A. and Gopal, S., 2018. Assessing the challenges to e‐commerce adoption in
Tanzania. Global Business and Organizational Excellence, 37(3), pp.43-50.
Sinha, D. and Chowdhury, S.R., 2021. Blockchain-based smart contract for international
business–a framework. Journal of Global Operations and Strategic Sourcing.
Subramaniam, C., Choo, L.S. and Johari, J., 2019. What makes employees want to stay? A study
in the Malaysian manufacturing sector. Global Business and Organizational Excellence,
38(5), pp.33-43.
Chawla, D. and Joshi, H., 2020. Role of mediator in examining the influence of antecedents of
mobile wallet adoption on attitude and intention. Global Business Review,
p.0972150920924506.
Cortés-Pérez, H.D., Escobar-Sierra, M. and Galindo-Monsalve, R., 2020. Influence of lifestyle
and cultural traits on the willingness to telework: A case study in the Aburrá Valley,
Medellín, Colombia. Global Business Review, p.0972150920916072.
Madsen, H.L., 2020. Business model innovation and the global ecosystem for sustainable
development. Journal of Cleaner Production, 247, p.119102.
Jehanzeb, K. and Mohanty, J., 2018. Impact of employee development on job satisfaction and
organizational commitment: person–organization fit as moderator. International
Journal of Training and Development, 22(3), pp.171-191.
Sawalha, I.H., 2020. Business continuity management: use and approach’s effectiveness.
Continuity & Resilience Review.
Mohapatra, M., Madan, P. and Srivastava, S., 2020. Loneliness at work: Its consequences and
role of moderators. Global Business Review, p.0972150919892714.
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