The Sasol Limited Organisation

GLOBAL BUSINESS ENVIRONMENT INTRODUCTION 3 PART 13 Introduction to the concept of Globalisation 3 Driving Factors of Globalisation 4 The impact of digital technology on globalisation. 7 PART 27 The explanation of the structure, culture and governing the organisation and applying McKinsey's 7s model to overview the organisation.7 Hofstede's dimension of culture9 Evaluating ethical and sustainable factors that affects the company in global market.9 Ethical and sustainable factors affect the decision-making of the company.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Introduction to the concept of Globalisation..........................................................................3
Driving Factors of Globalisation............................................................................................4
The impact of digital technology on globalisation.................................................................5
PESTLE analysis of the Sasol Limited..................................................................................5
Challenges of Globalisation and strategic challenges of Sasol limited..................................6
Recommendations to overcome the challenges......................................................................7
PART 2............................................................................................................................................7
The explanation of the structure, culture and governing the organisation and applying
McKinsey's 7s model to overview the organisation...............................................................7
Hofstede's dimension of culture.............................................................................................9
Evaluating ethical and sustainable factors that affects the company in global market..........9
Ethical and sustainable factors affect the decision-making of the company........................10
Assessment of the strategic expansion and describing its advantages and disadvantage.....10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Global business environment is defined by the environment in which different countries
operate. There are various factor in the environment which influences their decision making on
using various resources which impacts their capabilities. The global business environment can be
categorised into two types of environment such as internal and external(Al-Dhabi 2013). This
report will mainly focus on external environment and the companies operating globally has to
properly understood the external environment to operate effectively and efficiently. The
company which is analysed in this report is Sasol Limited. This is a company producing
chemicals and they operate basically from Sandton, South Africa. German chemist is the one
who built number of plants and they provided bulk of fuel to the military so that they can
conduct their operations. This report will cover the driving factors and impact of digital
technology and strategic challenges of the company and globalisation. This report will also cover
structure, culture and governance and evaluation of ethical and sustainable factors that the
organisation has to consider in the Global market.
PART 1
Introduction to the concept of Globalisation
Globalisation refers to the process in which interaction of companies takes place at
globally. This is very complex and includes various factors which are considered by the
company at the time of expansion. The scope of globalisation has increased due to up gradation
in transportation and communication technologies. In context of Sasol which is considering to
expand their business in Mozambique, Canada and in many countries. So, it is necessary for the
company to understand all the aspects of globalisation so that the company can expand
effectively. The globalisation involves cross-border movement of various goods and services
which increases the interdependence of the national economy. The Sasol is planning to expand
their business which is possible with this globalisation. It allows company to move out from the
border of the country and sell their goods in the other countries. The globalisation is beneficial
for the Sasol as it allow them to grow or acquire high market share in specific industry and
earning foreign exchange which is beneficial for their parent company as well. This also benefits
the country where expansion is taking place as it increase the job opportunities and increase their
standard of living(Alós, Rodrigo and Zacarías2013). The company is required to consider

available resources of the countries where Sasol is planning to expand and the country where
workers are ready to work at a reasonable wage rate should be consider. Foreign Direct
Investment (FDI) is define as a kind of investment which is made by the firm or individual in a
business which is located in another country.
Driving Factors of Globalisation
There are different factors that has derived the concept of globalisation and these factors
are uncontrollable by any firm. These drivers is affecting the potential ability of the
Globalisation over various industries. The factors are described below-
 Government- The rules and regulations related to the cross border movements which are
formed by the government has to be considered while taking a decision to expand in a
particular country. The Sasol is analysing the current trade barrier in the particular
countries which are Australia, Canada etc.
 Cost- The cost factor is an important driver which affect the globalisation. The
companies are required to analyse the cost aspect of the country where company is
planning to produce. The areas where access towards human capitals and the market is
easier need to be selected. The Sasol has analysed the estimated cost of the Australia as
this is the country where they feel they can operate at broad level.
 Competitors- The presence of number of competitors is required to be consider as the
Sasol is expanding in Canada and the number of competitors are more so it is not
favourable for the Sasol whereas the Australia where the number of competitor is less so
it is favourable.
 Market- The needs of the customers and the conditions of the markets is necessary to
analyse that expansion will result in growth or not(Barczyk and Duncan2012). The study
of market is necessary for Sasol to identify the region where the products of company is
highly required. The Sasol has analysed that Australia has more demand in comparison of
other countries.
 Technology- The technology has become advance in the past few years which has result
in improved structure of Global communication and mobility. The Sasol is using
improved technology which makes company achieving their targeted objective.

The impact of digital technology on globalisation.
Technology is the main driver of the globalisation as they are inter-related with each
other. Technology is an important factor for any company if they are planning to expand their
business as because of technology, company can develop connection with people of other
countries through assessment of other network. As the Sasol is planning to expand their business
in various country then the company is require to improve their technology factor so that
company can expand successfully. The technological factors are described below-
 Social media- This is the main factor as it is the main platform which connects people
socially through socially connected websites(.Edwards and Gaventa2014). These sites are
beneficial for any company to promote their product globally. As these sites are operated
by large number of populations over the world. This result in increased sales and
profitability of the company. The emergence of social media is enhancing the process of
globalisation through making communication easier.
 Trade through online sites- In current era, the large number of population prefer
purchase and buying online and almost everything is available at online sites which are
Amazon, Flip kart etc. The Sasol can expand their business by selling their products
online which is available over the world. This is an easy and less costly way to expand
the business globally. The Sasol can attract better customer by using these type of sites as
the customer can easily buy the products from this sites and it increases the sales of the
company as well as profitability.
PESTLE analysis of the Sasol Limited.
This is the tool for the company to consider all the external factors which affects the
operations of the company and then according to that decisions can be formed which will guide
the company in dealing with the external factors . The analysis is described below-
 Political- There are various rules and regulation is present in the economy which
influences the operations of the company(Kirton and Trebilcock 2017). The factors are
rules or legal boundries which impact the operations of the company as company has to
provide equal wages to their workers which increases the production cost of the
company.
 Economic factors- The economic condition of the country is an another factor which
has to be consider by the company before taking any decision of expansion. The demand

and supply of the goods which company is producing has to be consider as if demand is
high the company can expand and if supply is high then company has to take effective
decision(Park, Gunn and Han2012).
 Social factors- The gender, education level of society affect the decision to be taken to
expand in other country. The Sasol has to understand the culture and the understanding
power of the society and according to that production is made.
 Technological Factors- The technology improvement is necessary to applied so that
company can provide better customer services. The Sasol is using the latest technologies
to produce their goods effectively which decreases the cost of goods and that increases
the ability of company to generate profit.
 Environment factors- This involve culture, climate of the country and Sasol is
analysing the climate of the Australia as the suitable climate is necessary for an effective
production.
 Legal Factors- The laws which are made for the goods which company is producing
has to be followed by the company to build strong brand position in the company.
Challenges of Globalisation and strategic challenges of Sasol limited.
There are various challenges are present in the process of globalisation which has directly
impact on the operations of the companies operating in it. These challenges has become strategic
challenges for the company as company is required to form strategy to face these challenges. The
challenges are described below-
 Organisational structure- The different structures of different organisation has become
a serious challenge as the determination of the corporate structure in a new region has
become a difficult task for the Sasol limited. The Sasol has to invest more to form a new
organisation structure in a new region which has become a challenge in their
expansion(RinneSteel and Fairweather 2013).
 Ethical practices- The company has to operate their business in the boundary of ethical
code of conduct which has become a challenge in the expansion as the Sasol has to
operate their business in boundary of all the ethical rules made for the companies such as
using proper safety measures and provide protection to their workforce and several
ethical laws has to be follow by the company to operate in the particular region.

 Legal and regulatory- The company has to face many legal challenges at the time of
expanding their business and Sasol has to follow all the laws which are made by the
government of the country so it has become a main challenge for the company as the
complexity is increased(Kopnina and Blewitt 2018).
Recommendations to overcome the challenges.
The challenges faced by the company is the result of their plan to expand their business
and the company has to face all the challenges if company want to operate at global level. The
company is required to understand all the challenges and reason of the challenges as the
company has to properly formed an easy organisation structure which will help the Sasol in
surviving in a new region. The company has to follow all the ethical rules so that company can
operate and it will benefit the company as it will increase their brand reputation in the new
country. The company has to take proper decisions regarding the challenges and rules which are
made for the company has to be properly followed by the company and proper attention is to be
given to the laws so that no law can be remain unfulfilled(Limwichitr, Broady-Preston and Ellis
2015). The company has to fulfil the demands of the new market so that company can
successfully operate in the market. The company has to use various tools to plan for the
challenges through alignment of culture so that Sasol can reduce cultural differences and proper
keeping the control over safety measures and make sure that resources are channelised properly.
PART 2
The explanation of the structure, culture and governing the organisation and applying
McKinsey's 7s model to overview the organisation.
The structure, culture and governance is an essential factors which impacts the
performance of the companies. These are the base of any organisation which can influence the
behaviour of any organisation. The Sasol has adopted flat structure of in their company which
allows the proper communication between managers and staff. This results in creation of healthy
environment in their company that allows them to achieve their objective. They involve their
employee in decision making process which increases their interest in the company. The Sasol
used governance as an effective tool as they regulate and check the performance of their
employees. To operate effectively the company has to study the process through the work can be
done effectively. The explanation of The 7s model is described as below-

 Strategy- This is the main factor as the company has to form strategies related to
expansion so that they can operate their work effectively in a new country. The Sasol has
to formulate strategies and plan for certainty so that it will result in achieving competitive
advantage. The Sasol is using the strategy which is increasing the role of research and
development so that company can identify the needs of global market.
 Structure- The structure define the process in which company operates. The Sasol has an
easy structure which is flat structure as it involves the employees in their decision making
process and this motivates them to work effectively for the company so that company can
achieve its objective.
 System- This involves the process which company used to produce their goods and the
Sasol has to use easy process and it uses the process which do not waste their resources.
The structure of the company is made accordance with the production system of the
company and proper control is given to the operations of employees.(Rogala and
Bialowas 2016).
 Skills- The employees who are operating the activities of the company has to be skilled
and properly educated so that they can follow all the developed strategies made by the
Sasol limited which is beneficial for the development.
 Staff- Before expansion, the requirement of staff is necessary to be estimated so that
other activities such as training and development programmes can be forecast according
to the need of the employees.
 Style- This is related with the leadership styles and company operates at democratic style
which make their employees to feel valued and they get motivated.
 Shared value- This is concern with the performance of the company and there are the
specified values in the company which is accordance with the corporate culture and
ethical practices. The Sasol is using most of the ethical practices which will benefit in the
expansion.
Applicability-
The assessment of above 7s of model is necessary for the company as they have to
consider their ability so that they can take right decision of expansion(Lust and et. al., 2015).
This is important for the company to enhance their skills and efficiency as if the company is not
able to form the effective plan and strategies then the company will not be able to achieve their

objective(Rugman and Verbeke 2017). These points provide brief to the company about their
culture, scope and dimensions and their relation with the achievement of company's objective.
Hofstede's dimension of culture
This is the theory which provides outlook of cross-cultural communication and this help
in analysing the culture of the society. There are the five dimensions which are explained below-
 Power distance Index- The power distance index refers to the process of analysing the
distribution of power. Sasol is operating at South Africa where the PDI is high as there is
power is not distributed equally so the company is required to analyse the PDI of the
country where company is planning to expand.
 Individualism vs Collectivism- The assessment of inter relation between individual is
necessary for the company as the people in South Africa prefer individualism which
result in weak personal relationship. So, the company has to understand first and then
decision can be formed regarding their expansion in different countries.
 Masculinity and Femininity- The distribution of role is the main factor which affects
the decision of expansion in the country. In south Africa role is not equally distributed
which is the factor in designing the culture of the company. The Sasol has to consider the
distribution role of the economy.
 Uncertainty avoidance Index- This index shows that how many people ignore
uncertainty and how many do not try to avoid and this is important to analyse by the
Sasol that in country where the company is planning to expand the rate uncertainty
avoidance is high or low so accordingly company can make strategies for uncertainty.
 Long versus short term Orientation- The objective of the company that is to survive in
long run or has some short term objective. This factor has to be analysed by the company
so that company can take right decision regarding their expansion so their objectives of
expansion can be achieved.
Evaluating ethical and sustainable factors that affects the company in global market.
There are various external and internal factors that affects the operations of the company
in the global market and these factors are required to be evaluate so that it does not affect the
operations of the company. The explanation of the these factors are described below-
 Focus on integration in business relation- This is the main ethical factor which
company is required to be followed that is to maintain good relations with their other

business unit and this factor is also a sustainable factor as it makes the survival easier for
the company as the good relations between other business allow the company to know
about their operations efficiency techniques and the rivalry reduces(MacKenzie, Garavan
and Carbery 2012).
 Treat employees equally- This is the ethical factor that is to treat the employees equally
and reducing the discrimination with age, gender or caste and this is also a sustainable
factor as it allows company to survive through increasing the efficiency of employees.
Providing equal treatment to the employees increase their motivation level to work hard.
Ethical and sustainable factors affect the decision-making of the company.
The ethical and sustainable factors are the base which allow a company to grow in the
new market. The assessment of these factors are necessary for the company so that they can form
strategic decisions according to that. The company has to operate effectively to make a strong
position in the global market so the company has to follow all the ethical practices which will
create a good position in the market. According to the ethical practices the decisions are required
to be formed(Mayoral and et. al., 2013).
Assessment of the strategic expansion and describing its advantages and disadvantage.
The strategic expansion refers to the expansion of the company through by using this
technique such as franchising, licensing, partnership, joint venture etc. The Sasol is expanding
their business through partnership and licensing which makes expansion easier and cheaper. As
this types of expansion provides support to the company financially and in many ways. The
company can expand their business at low risk as other companies is totally aware about the
culture of their country which makes easier for Sasol to expand in their country.
Advantage-
The company can expand their business easily without wasting expenses on researching
about the condition of the market and this also allow company to build a good image in the
market as the existing company will work according to the culture which is accepted in the
market.
Disadvantage-
This types of expansion performed by the company is costly and expensive as the
expansion require huge amount of fund and this process is a time consuming as they involves

various formalities which are required to be fulfilled to create a successful expansion in the
country where company is interested so it is a complex process.
Key Barriers of Internationalism:
 Trade restriction: Due to this barrier, respective company will not able to export or
import its goods and services in other countries which may affect their sales and profits.
 Tariffs: This barrier will cause the respective company high tax on their goods which
will be expensive for them and this may affect their sales in other countries.
 Import Quota: Due to this barrier, Sasol company will be restricted to import their
products into the country at period of time. This can affect their production due to which
they wont be able to fulfil their customer needs.
CONCLUSION
From the above report, it can be concluded that there are various driver that affects the
operation of the company in globalisation and the impact of digital technology in globalisation is
an effective tool for the company and a pestle analysis is important for the company to determine
the affect of external factors. There are various challenges in globalisation which become
strategic challenge for the company and the challenges are required to overcome. The structure
and culture of the company helps a company in expansion and there are ethical and sustainable
factors which impact the company performance and the strategic expansion provides benefits to
the company.

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