Globalisation and Organisational Decision Making

The assignment explores the influence of globalisation on organisations, both positively and negatively. It considers various external factors that affect decision-making, such as political, economic, and technological changes. The document also discusses merger and franchising as suitable methods for international business expansion. References to relevant literature and online resources are provided.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
TASK 2............................................................................................................................................3
1.Structure, culture and governance of organisation. Apply McKinsey's 7s model...............3
2.An evaluation of how the above has been influenced by global operations. Applying
Hofstede’s Dimensions of......................................................................................................5
3.An evaluation of ethical and sustainable factors that the organization has to consider in a
global market..........................................................................................................................6
4.Assess how these factors have affected decision making in a global context.....................7
5.Assess which strategic expansion routes the organization took and analyze both advantages
and disadvantages...................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.........................................................................................................................................................9

INTRODUCTION
Globalisation is one of the most recent trends in business world. It can be describing as a
process of communication and integration of individuals, companies and governing bodies all
across the world. SASOL Limited is an energy and chemical organisation which is based in
Africa. Some of the products that respective company deals in are synthetic fuels, chemicals and
electricity. SASOL is now operating in Canada, Mozambique, Gabon and Australia and looking
forward to expanding in other parts of the world. This report will discuss about various factors
that have an impact on globalisation. Addition to this, this file will also study the influence of
digital technology on globalisation. There are various external factors that have an impact on an
organisation such as politics, law, price, etc. which will be discussed in PESTLE analysis.
Furthermore, structure, governance and culture of SASOL Ltd. will also be studied with the help
of McKinsey's 7s model.
TASK 1
Covered in PPT

Globalisation can be described as a mean through which world is connected together. There have
been a certain growth in globalisation from past few years with the help of technology,
transportation and communication as well. On the basis of these kind of concept, an organisation
can easily access their business approaches in different countries. Globalisation has provided a
platform to share ideas, trade and culture internationally. Addition to this, it has provided a wide
platform to for organisations to expand their business in international market. Hence, the key
concept of globalisation is to increase the economic growth of countries addition to the cultural
and social factors. Similarly, SASOL limited is globalising their operations through operating in
different countries and market place with the help of various technological tools such as internet,
transportation, etc.

With the recent changes in market and business trends, globalisation has been playing a
significant role in expansion and revenue earning of business of SASOL. Globalisation has
helped in exploring new market and increasing the number of customers for the company. With
these international business operations, the economy of Africa has also benefit from the
company. However, there are few factors which influence globalisation. These are discussed
below:
Advancement of Technology- It is one of the crucial element of globalisation. Technology has
taken globalisation to a whole new level. It has helped SASOL to successfully reach out new
customers in different parts of the world through effective technology. Addition to this, with the
help of tools such as internet, telephones and other modes, SASOL has been able to provide
knowledge about their product range to targeted customers.
High Competition- It is consisted as an important driver of globalisation. Due to various
competitors in the domestic market, companies like SASOL are tend to expand their business
internationally. Furthermore, the respective company earns good profit by serving products and
services.

Digital technology has played a major role in facilitating globalisation. It has helped SASOL in
many aspect such as transportation facilities, communication technology, information
technology, etc. Thus, to have a better understanding about the impact of these technologies, a
discussion is mentioned below:
Transportation Technology- There are various transportation means available in the
market which facilitates to trade products of SASOL such as fuel, chemicals and gases to other
countries. Some of the major transportation operations are done through airways, roadways,
railways and sea ways. Similarly, one of the most advanced transportation mean that has
facilitated the respective company to transfer these hazardous chemicals are container ships,
super tanks, etc. These tanks helps in transporting large quantity of products through safest
means which helps in lowering down the number or incidents and further loss to SASOL.
Communication Technology- Through this mean of technology, SASOL is able to
communicate with global customers. Some of the frequent used communication technology by
respective company are telephones, voice mails, text message, etc. These modes of technology
helps in direct communication with the respective organisation with the help of which, SASOL is
able to provide more accurate information about the products and services and enhance the
experience of customers.

Internet- Information technology and internet is the most important element of digital
technology. It is a platform which helps in connecting the world and exploring information about
products and services. Thus, SASOL practice this technology through its official website which
is consist of detailed information about products and services which are offered by the respective
organisation. Similarly, the latest changes in the products and other updates of SASOL are also
accessible through internet. Apart from this, internet is a powerful mode of promotion which
helps in attracting more customers and influence their buying behaviour and preferences.
PEST analysis is a tool which helps in measuring the impact of macro environmental factors on
SASOL Limited. It is further discussed below:
Political Factor- SASOL is a chemical and gas company. Hence, it is important for the
respective company to legal frameworks in order to have a smooth running business. Some of the
political factors are taxation, trade regulation, etc. As SASOL operates in different country, it is
important to carefully examine the regulations of each country and follow them wisely.

Economical Factor- SASOL plays a major role in growth of economy of Africa. As it is an
international company with the total number of approx 30,000 employees (#74 Sasol, 2018).
This shows a positive contribution towards the employment growth of country.
Social Factor- This factor studies the culture and lifestyle differences of customers living
in different part of the world. As the products offered by SASOL are technically advanced and
new, respective organisation have a wider scope to provide such products to different countries
and help them improve their lifestyle.

There are various factors of globalisation which have a direct impact on operations and decision
making of SASOL. These are price, currency exchange rate, legal regulations and many more.
Thus, keeping these factors in mind, a discussion is given below:

Changing trends of Technology- It is one of the factor which keeps on upgrading. As
globalisation is highly dependant on technology for communication and transportation. It
sometimes become difficult for SASOL to cop up with the latest technological trends.
Weak Growth of Economy- due to low economic growth in few countries, the spending power
of customers is also weak. This leads to decrease the profitability of SASOL from these markets.
Thus, it is important for SASOL to assess the economic stability of country before investing in
such countries.

M1 Critically analyse the impact that key factors have upon the global business environment
There are various factors which directly impact on international business environment
that includes increasing customer Demands where needs and wants of customers has played a

significant role in facilitating globalisation. The demands of customers increases with their level
of incomes and lifestyle. Also, globalisation helps the customers to explore products and services
which are available in global market. This provides a great opportunity for SASOL to grab more
market share in existing market as well as new market place.
M2 Critically analyse strategic challenges in context of risk and diversification strategies and the
supply chain flow
In this, different challenges which are faced by an organisation includes change in
technology and weak growth of economy. There are different technology aspects in all the
countries it sometimes becomes complicated to maintain and understand these variations for
respective company. Similarly, Countries which are more involved in importing materials and
products will tend to have low employment rate which directly affects the growth of economy.
TASK 2
1.Structure, culture and governance of organisation. Apply McKinsey's 7s model.
Structures- It can be described as a method or a frame in which the divisions are
categorised in the organisation. Thus, organisational structure of SASOL is flat.
Culture- SASOL is an international company which have employees working from
different backgrounds and culture. Thus, it is important to understand the differences between
individuals regarding their beliefs, race, lifestyle and other factors in order to acquire maximum
productivity from the staff members. Addition to this, respective organisation encourage
diversity, transformation and high-performance culture.
Governance- It can be defined as vision, mission and objective of the organisation which
helps in understanding the motive and prime goal of company. Thus, SASOL practise a sound
corporate governance structure which believes in delivering a sustained growth to all the
stakeholder of company. Some of the stakeholders of SASOL are customers, employees,
shareholders, etc.
McKinsey's 7s model is consist of seven elements which are further categorised in hard
and soft elements. These are structure, strategy, system, values, culture, styles and skills (Botha,
Kourie and Snyman, 2014). The respective model is practised to facilitate changes in
organisation, implement further changes and help in merger of companies. Thus, it is further
discussed below:

 Strategy- It is a plan which help in achieving the goals and objectives of the
organisation. Thus, the strategic plan of SASOL helps in attaining the long term
objectives of the company which is to increase the number of sales and revenue. Addition
to this, it help in the company to achieve the competitive advantage for SASOL.
 Structure- It can be defined as method of business division of the company. The
business structure of SASOL if flat. Thus, all the divisional heads of departments such as
finance, HR, marketing report to CEO of the respective company.
 System- It is consisting of the operations of the company. Thus, SASOL is a South
Africa based company which deals in products like synthetic fuels technologies,
chemicals and electricity.
 Style- This element studies the style of leadership that companies follow. Thus, SASOL
Limited follows situational leadership where the leaders of company alter their strategy
and method of leadership as per the changing situations of the company which provides a
scope of flexibility in the management style.
 Staff- SASOL have been operating in nearby 33 countries. Thus, the number of
employees of the respective company is approx. 26,997(Sasol Limited, 2018).
 Skills- The employees of respective organisation are very much professional. SASOL
provides various training programs in order to enhance the capabilities and skill of the
employees which helps in improving the quality of products and services of SASOL.
 Shared values- The core values of SASOL is to provide a healthy working environment
for the employees of company. Addition to this, there has been various strategies
practised by SASOL which are focused in enhancing the dynamic culture of the
respective company.
M3 Critically evaluate global market influences in application to appropriate theories and models
McKinsey's 7s model will assist in evaluating and determining the models which can be
used for analysing company structure, shared value, skills, staff, style, etc. the global market
mainly impact on such factors in order to apply effective theories and models in better manner by
an organisation. The work culture of SASOL is very dynamic. The management has been able to
manage the culture which promotes talents and development of the employees of company.

D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations
Global business environment are directly affect on changes and alterations that are used
by managers for designing, producing and distributing effective products and services among
large number of customers. The major challenges which are faced by an organisation in business
surroundings are huge competition, similarities of products and services. On the other hand, the
opportunities which are created for firm is to gain attention of domestic as well as international
customers towards company products and services.
2.An evaluation of how the above has been influenced by global operations. Applying
Hofstede’s Dimensions of
Structure-
The business structure of SASOL is flat. However, global operations has caused to make
certain alterations in the respective structure. Due to international operations, the respective
company has to expand their organizational structure in order to manage the global operations.
Thus, SASOL is practicing to launch different set up of teams in every country consisting of
every business division such as marketing, IT, finance, etc. which will be responsible for
managing the business operations of that respective country. Furthermore, all these teams will be
reporting to the CEO of SASOL.
Governance-
SASOL believes in the growth of every stakeholder of company. However, the vision,
mission and objective of the respective organization has been altered due to its international
operations. Thus, SASOL is looking forward to be a global leader in chemical and energy
industry. Addition to this, the respective organization is focusing on improving its sustainability
in order to enhance the surrounding environment and help in improving the quality of living of
the society and its customers.
Culture-
Hofstede's Dimensions of Culture is a tool which helps in understanding Cultural values
of individuals as these helps in managing internal environment of SASOL. Along with this, it
helps in maximizing the profit levels of company. Further, these are discussed below:

 Power Distance Index: This element helps in identifying equality or distribution of
authority among SASOL. Thus, it helps in managing the complex hierarchy of the
respective organization and helps in assuring that the authorities are managed properly.
 Individualism versus collectivism: SASOL limited practice collectivism which helps in
managing the operations and other business activities through adequate team work
(Wood and et. al., 2015). This further helps in maximizing the profit and reputation of
company.
 Masculinity versus Femininity: SASOL is using Femininity method as it helps in
having a better relation between the juniors and senior staff members of respective
organization. Additionally, it helps in minimizing he discrimination between men and
women in workplace which motivate employees of SASOL to work up to their full
potentials.
 Uncertainty avoidance index: The uncertainty index level of SASOL is low which
reflects that the work environment of respective organization is very friendly and
comfortable for employees (Peng, 2016).
 Pragmatic versus normative: SASOL Limited is practicing normative approach which
assist them strong values and rights for the employees of respective company. Thus, it
helps in providing a feeling of security to the staff members of SASOL.
 Indulgence versus restraint: SASOL company uses indulgence approach. With the help
of this, employees of respective organization feel free to share their thought with each
other which helps in avoiding any further conflicts and promote problem solving.
3.An evaluation of ethical and sustainable factors that the organization has to consider in a global
market.
Ethics are the set of principles which are derived to assist SASOL in order to operate in
international market in a more effective manner. There are certain factors that needs to be
practiced by SASOL Limited which are discussed below:
Corporate Social Responsibilities: It can be described as the contribution of the
company towards the society. Thus, SASOL should incorporate in more CSR activities which
will help in increasing the reputation of respective organization in the market. SASOL limited
can look forward for donations, involve in community development activities, etc. Along with
this, respective organization can also take certain measures to lower down their carbon emission

and impact on environment which will contribute for a better future and promote sustainability of
SASOL Limited. When performing operations in global market, organization has to consider
this factor as it helps in improving reputation and image of firm in society and also helps in its
long term sustainability in market.
Legislation: These are introduced in order to assure that companies operate in controlled
manner. Thus, by following these frameworks, SASOL can assure profitability and future growth
of company (Cavusgil and Knight, 2015). company needs to follow all the regulations made by
government as it helps in running its business operations smoothly. Consideration of this factor
assists firm in maintaining its long term sustainability in market.
4.Assess how these factors have affected decision making in a global context.
Global business environment carries out various elements which have the power to
influence the decision making of SASOL. Some of these factors are social responsibilities, laws
and regulations, culture, etc. The respective organization is looking forward to expanding its
business in other parts of the world such as Japan, UK, etc. However, every country have their
own cultural values and lifestyle which needs to be noted by respective organization as these
differences leads to raising demand and sales of products of SASOL (Ali and Amin, 2014) .
Thus, respective organization should alter their strategies and promotional activities which will
help in influencing the demand of customers from different backgrounds. The respective
organization can apply culture based promotional strategy which will help in building trust
among customers of new market and help in attaining more clientage for the company.
Similarly, each of these countries have different type of government stability and
regulation frameworks. Thus, it is important for SASOL to follow these laws in order to operate
in different areas of the world. In order to maintain international trade and operations, it is
important for SASOL to asses all the regular frame work and then make further strategic
decisions. The price range of competitors in international market plays a major role in
influencing the price strategy of respective company. Hence, by carefully analyzing the price and
other competitive factors of rivalries, SASOL should decide their pricing in international market.

5.Assess which strategic expansion routes the organization took and analyze both advantages and
disadvantages.
Although there are variety of options available for SASOL Limited to expand their
business, but keeping in mind the nature of business and other influencing factors, the most
suitable method for expansion of organization are mentioned below:
Franchising- In this method, organization operates in new market by opening a
franchise. Additionally, the partner has to pay certain amount to SASOL limited in order to work
with them and use their name for operating business. The major advantage of this method of
expansion is that company don't have to bear the risk of loss alone (Kolk, 2016). Additionally,
the partner is usually well versed with the new market which provides an advantage to respective
company. However, a disadvantage of franchising can be managing the quality of products and
services which can lead to cause a bad reputation of SASOL in the market.
Merger and Acquisition- SASOL can look forward to collaborating with existing
companies in the new market. However, acquisition is also an equivalent option for expanding
the business in new market. Advantage of merger is that SASOL will get an established market
which can help in providing stability and furthermore revenue for respective company. However,
one of the disadvantages can be that such mergers causes interference of others in operations of
the company. Similarly, previous losses of merged company will also affect the profitability of
SASOL Limited.
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome
There are various key barriers and issues while doing business at global level such as
language barrier, cultural barrier, working with multiple currencies and dealing with
infrastructure issues in different countries. They require to overcome with this issues for
understanding language and culture which create barriers. The company need to analyze whole
market and their country culture where they try to conduct business.
D2 Critique strategies that can be adopted by organizations operating in a global business
environment, making valid
It can be recommended that an organization need to adopt international strategy where
they can easily gain attention of large number of customer whether they are domestic as well as
global level people. Such strategies should be adopted by company in order to maintain existence

in the large market place. They require to develop and formulate such strategies which can be
helpful in dealing and doing business at global level.
CONCLUSION
From the above discussion, it can be concluded that globalisation plays a vital role in
growth and profitability of respective company. Similarly, digital technology has a great
contribution in globalisation of businesses. However, there are certain factors which influence
globalisation of organisation in a positive as well as in negative manner. Also, there are various
external factors which impact the decision making of organisation such as political, economic,
technology, etc. which can be maintained through affective plans and strategies. Furthermore,
the respective organisation can opt for international expansion through different methods,
however merger and Franchising are most suitable according to the nature of business of the
company.

REFERENCES
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