Global Business Environment: Factors, Challenges, and Opportunities

This unit analyses the key factors of cost, market, environment, and competition that drive global commerce and trade. It evaluates the complexity of strategic challenges faced by organisations when operating in a global environment, supported by specific examples. The unit also evaluates the influences of globalisation on organisational governance and leadership, structure, culture, and functions. It concludes with a critique of strategies that can be adopted by organisations operating in a global business environment.

Global Business
Environment

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.....................................................................................................................3
M1 Critically analyse the impact that key factors have upon the global business environment
in terms of opportunities and challenges.....................................................................................4
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples...................................................................5
M2 Evaluate strategic challenges in context of risk and diversification strategies and the
supply chain flow.........................................................................................................................6
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations................................................................................................7
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions....................................................................................................7
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...............................................................7
P5 Evaluate the different ways decision making can work effectively in a global context.........7
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers........................................................................................................7
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome........................................................................7
D2 Critique strategies that can be adopted by organisations operating in a global business
environment, making valid and justified recommendations of how they should adapt their
organisational structure and decision-making processes.............................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................7

INTRODUCTION
The ecosystem under which the the global businesses perform their activities is known as
the global business environment. Globalisation has provided the vast functional area for the
businesses to expand their customer base, the business environment bring many opportunities
which helps the organisation in expanding its business horizons along with cresting a bench mark
fro the brand, which doesn't provides customers a low switching cost. The factors deriving the
conditions of the global market are not in the control of any specific business or nation which
makes them dynamic in nature (Abu Bakar, Ahmad and Ahmad, 2019). The businesses which
are able to work along with the business environment factors are able to achieve much greater
heights. The factors associated with the business environment impacts the businesses even with
their daily activities which determines the attainment of respective goals or objectives of the
business. Businesses which performs their activities under the global environment need to adapt
to the policies of the nations with whom they are working in, If the companies are not able to
keep the norm, faces serious repercussion which includes the discontinuation of the contract,
which will lead to much bigger losses of the company.
TASK 1
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade
 Cost : Globalisation derives the business environment and the factors associated with it,
the cost of goods and services is one among the factor which is influenced with the
factors of the business environment. The workforce that is required by the company,
skilled or unskilled have a certain cost associated with them which influences the whole
functioning of Sasol. The cost that bring labour decides the investment factors that will
be incurred in the future projects (Bhagra and Sharma, 2018). The company needs to
overview and structure its products in a way which helps them sustain at reasonable rates
for the commodities while providing the value of money.
 Market : Sasol operates in 33 countries which have only been possible with
globalisation and its trends in the market. Through which the company has been able to

expand its operation sin booming economies which has provided the edge to the business
prospectives of the company. With its expansion strategies the company is able to obtain
resources which are restricted to certain nations and have turned out to be beneficial in
the companies operations.
 Environment : As Sasol deals with petroleum, diesel and other natural gases along with
jet fuel and many others. Some of these fuels and chemicals that the company produces
has been the reason in the depletion of the environment (Dede, 2019). Which has been
the contradicting factor for the company and its market image for which the company
needs to adapt sustainable methods through which they will be able to overcome or
reduce the environmental repercussion of the products.
 Competition : With the rising environment crises the company have to deal with the
companies who are taking over the business with electric vehicle and other substitutes
which are there to replace the product of Sasol. The company needs to deal with
companies who are functioning in the same sector and able to attract customers with their
marketing strategies through which they are able top convey the message of sustainability
to its customers.
M1 Critically analyse the impact that key factors have upon the global business
environment in terms of opportunities and challenges
Along with the above mentioned factors, Sasol goes through the external and internal
factors that take occur because of globalisation. The additional factors which directly or
indirectly affects the functioning of the company in other nations includes the international
policies for MNC's which determines the trade for the company. Additionally the government
policies of the nations can have positive along with negative effects on the company as on how
they execute their operations and trade and commerce as it all depends on the government on
how they protect the interest of the company.
As many countries has specified the use of certain chemical in their products and the ban
of some which can be a problem of companies like Sasol. Sasol derives natural gases and oils
from the environment and makes it marketable for its sale which can be affected by the natural
calamities and disasters which no one can control but can only take precautions (Goedeker,
2021). The calamities creates a lot many issues for the people to handle which stops the

commute and affects the purchasing capacities of individuals. These events affects the sales of
the products which directly affects the company in positive as well as negative ways.
P2 Explain the complexity of strategic challenges faced by organisations when operating in
a global environment supported by specific examples.
PESTLE analysis refers to the analysis that tells about the influence of external factors
on the business organisations. These factors are Political, Economical, Social, Technological,
Legal and Environmental. This analysis helps the organisation to formulate business strategies
according to these external forces. PESTLE analysis of SASOL has been discussed below-
 Political Factor : It refers to the factor that states the impact of political forces on
business enterprise. These factors consists of Government policies, Trade Policies, Fiscal
policies etc. SASOL Ltd. Can expand easily if the tax policies are formulated in the
favour of oil and chemical industry.
 Economical Factor : It refers to the factor that helps the organisation in determination of
external environment in which the business operations takes place. This factor include
Price,Income, Wages, Demand and Supply etc. Companies like SASOL require moderate
interest and inflation rate to flourish their business.
 Social Factor : It refers to the factors that create impact on the society such as societal
values, culture and norms etc. which influence business enterprise. These factors includes
Family size, Buying habits and Customer preferences etc. Companies like SASOL
require more skilled labour in comparison of unskilled labour to operate their businesses
globally (Gupta and Dalei, 2019). These days population is becoming more aware and it
lead SASOL to take CSR initiatives, which help the company to focus on employees
emotional and metal health also.
 Technological Factor : These are the factors that has huge influence on businesses.
Advancement in technologies have always served the business to increasing the
efficiency of the business. The areas where the technological innovations and
modifications has helped Sasol includes; Internet Penetration, Investment in R&D,
Technological infrastructure etc. The products that the company deals with needs to be
dealt with precautions and which can be feasible through improved an advanced
technologies which helps the businesses to flourish.

 Legal Factor : As the company is operating in 33 different nations and is suppose to deal
with the rules and regulations of the country. The company is required to deal with the
national along with international factors which are regulates the functioning of the
company operations (Halbert and Ingulli, 2020). As these norms determines the trade
and commerce of the company, these factors can't be neglected under any circumstances.
 Environmental Factor : Sasol deals with the products which have been the major
factors in the environmental pollutions and depletion of the ozone layer, which indicates
the scope of the company id contracting with the passing years. For which the company
needs to discover sustainable and environment friendly alternatives for the company,
which can serve both the objectives.
M2 Evaluate strategic challenges in context of risk and diversification strategies and the
supply chain flow.
The operations of the company are associated with many risk factors which the company
needs to evaluate and deal with it in an acceptable manner. With the help of technological and
other factors the risk associated with the company can be minimised through several ways. Sasol
carries out qualitative and quantitative analysis of the company which helps in analysing the risk
factors associated with it. Through the evaluation Sasol is able to derive precautionary measures
which helps the companies to eliminates such effects and carry on with the business operations.
The supply chain in any business play a crucial role, Sasol needs to identify the risk factors and
understand the root cause of their existence. The company could faces many issues in the supply
chain which includes, financial issues associated with the supplier or the business.
The company needs to deal with legal factors in the country they are operating in, the
legal factors can be the reason for the inconvenience caused to the supply chain. Sasol faces
environmental and sociopolitical risks in its operations because of the products and services they
offer which they balance by initiating sustainable products and commodities which helps them in
sustaining their image in the business market and avoids any disruption (Harvie, 2019). The
supply chain of Sasol is exposed to many risk factors which needs to be handled effectively with
the implication of right strategies for the risk that has been arose. Sasol has a team of
experienced and competent project mangers and R&D team which helps the company in
achieving its goal.

D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations.
Global business environment allows businesses to flourish and expand their geographical
presence in other nations which helps them in expanding their customer base along with the
product portfolio (Hiermaier, Scharte and Fischer, 2019). The businesses operating in the
business environment experiences opportunities followed by the challenges which disturbs the
functioning of the processes. Opportunities and challenges faced by the organisation are as
follows:
Opportunities Challenges
It has helped the company in expanding its
customer base in different nations.
As the big brands enters the traditional markets
of other nations, bring difficult times for the
local businesses.
The company gets to know about the
customers in the new business market.
The company needs to adjust its products on
the basis of the needs of the people of the
nation.
Through the operations the company is able to
create economies of scale, with the
predetermined expectations that were ;aid for
the company.
With the increased demands the company has
to deal with long and indulging supply chain
processes.
The expansion helps the company in finding
sources of resource which are comparatively
cheaper and helps the company with its
expansion goals.
The economy of the country that the country
have moved in will be facing inflations and
distrusted economic conditions at times, which
the company needs to effectively deal with.
The government of several nations motivates
companies to invest in their nations by
establishing their factories which provides
employment to the people.
The expansion bring many difficulties as the
company needs to adapt to the laws of the
nations and mould their operations on the basis
of the rules and regulations formulated by the
nation(Kurbetti and Maheshkar, 2020).

Sasol in the international market place has experienced many opportunities along with many
hardships, all along which has helped the company in its expansion to 33 countries and effective
and successful operations in each of them.
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
Globalisation affects the business corporations in many ways, because of which Sasol too needs
to deal with the positive as well as the negative aspects of the globalisation factors, the areas in
which the prominent effect is noticed includes;
 Organisational Governance : Globalisation has increased the customer base for the
company which cannot be handled manually with the same efficiency, because of which
corporates are required to install and adapt technologies as they make the processes
smoother. Globalisation has attracted international investors to invest in Sasol, influenced
with the performance of the company in the foreign countries.
 Leadership : To cope up with the changing working environment and adaption in
different cultures the mangers of Sasol needs to adapt with the traditional practises of the
country they are operating in as it is the motivation factor for the people who are working
for the respective industries (Liu and Yang, 2019). The products needs to be modified
and altered depending on the needs of the local individuals. If the manager is not able to
adapt within the new environment, the companies operations will be at stake.
 Structure : Sasol hold different vision for different nations while upholding the vision
and mission of the company, which allows the management to alter and make changes in
the organisational structure the company have, into one which will help the company in
its operations to attain its desired goals.
 Culture : The expansion of Sasol has made the company through many social and
cultural changes which were necessary for the success of the company in the respective
foreign lands.
 Functions : Each nation has its own way of doing thing in every sector, so it becomes
necessary for the company to evaluate the process that is preferred and create a strategic
framework for the effective implication of the tactics.

P4 Evaluate the influences of ethical and sustainable globalisation on organisational
functions.
Ethics in an organisational structure are the deciding factors for success in many
processes. Ethics plays an essential role in developing the trust and confidence among the
employees as ethics motivates people to work with the respect of the code of conduct that has
been issued by the company (Morrison, 2020). Sasol is able to make an impact in the market
place is because of the ethics that the employees of the company carries within themselves,
which is portrayed to the customers, which has been the ultimate factor in building the trust
among the employees. Ethics is the framework of applying the morals on which the company has
established its functions, being unethical in any organisation is not tolerated under any scenario.
The human resource and the management of the company determines the behaviour of
employees in an organisation. The customer is the first on to discover the behaviour as they
interact with the employees of the company which cannot be put on stake.
Globalisation is formulated with the combination of culture, traditions, economies and
market conditions, with the help of these factors the companies are able to formulate strategies
and processes to conduct their operations which have been beneficial for Sasol. Through these
factors the company is experiencing sustainable globalisation which has brought many benefits
for the company. Sustainable globalisation has given the edge to the companies to expand their
business abroad and experience the facilities that the company has to offer.
M3 Critically evaluate influences of globalisation in application to appropriate theories and
models relating to organisational structure and culture.
Hofstede developed the theory Hofstede cultural dimensions theory, the theory helps the
businesses, to analyse the factors that regulates business globally through different cultures. It
helps in categorising the different cultures on the different basis and at what extent they impact
the businesses I different sectors. Primary it help in understanding the cultures and how do they
vary.
The theory is fragmented into six parts, which includes:
 Power Distance Index : This factor analysis the low and high power distance index and
identifies which index does the culture believes in, as it helps in understanding the power
and inequality dimensions in the community.

 Collectivism vs. Individualism : This factor analysis that is the culture take along all
while attaining its objectives or focuses to the individual benefits an dwell being.
 Uncertainty Avoidance Index : This factor analysis that till what extent the culture is
able to tolerate the uncertainty and risk factor, which is categorised within high and low
uncertainty avoidance index ( Vázquez‐Barquero and Rodríguez‐Cohard, 2019).
 Femininity vs. Masculinity : This helps identifying the roles of females and males in the
society driven by the respective culture an dhow they are treated.
 Short – Term vs. Long – Term Orientation : This analysis is done on the factor of the
existence of the culture, along with understanding whatever the culture believes in
achieving short term or long term goals.
 Restraint vs. Indulgence : It identifies how the societies with the help of their cultures
are able to resits or indulge with their desires and fantasies.
Sasol has formulated its strategies while including the factors that are mentioned in the theories
as they helps in identifying the cultures of the communities.
P5 Evaluate the different ways decision making can work effectively in a global context.
SWOT Analysis  Swot analysis helps in identifying the
internal factors which affects the
working of the companies, along with
formulating strategies to shadow the
weaknesses.
 Sasol has been able to identify its
strengths and weakness along with
threats and opportunities with the help
of the SWOT analysis.
 Which has helped the company to
analysis market conditions in the
respective countries they feel to
operates in.
Pestle Analysis  This framework helps the companies in

identifying the external factors which
affects the functioning of the company.
 Through this analysis framework.
Sasol is able to formulate business
strategies and modifications which
helps the company in achieving their
desired results (XUBEI, 2019).
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.
Different companies adapt different ways to expand their businesses globally and it depends on
the businesses how effectively they do implement them, for the attainment of their desired roles.
The ways Sasol implemented for the expansion of the business includes;
 Franchising : Under this the business allows people to open their stores under their
ownerships under different geographical areas. For the regularisation of these stores the
company has created Sasol Convenience Centres.
 Licensing : Sasol has licensed its products which allows other business owners to sell
their commodities under the ownership of the company itself it also helps in the
expansion of business globally.
 Joint Venture : When two or more than two companies or entities come together an
form an alliance under which they are liable for the loss the company is facing along with
the profits that the company is making.
 Exporting : Sasol practises exporting under which the company is transporting its goods
to different countries and make a sale there which helps in the expansion of the business.
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome.
Sasol as a global business has faced many difficulties in the foreign markets as there exists many
key barriers which prevents the companies from achieving their goals and objectives. The
success of the organisation in a foreign land depends on how well the organisation and its

employees are able to adapt to the socio- economic and culture factors of the company, as it
impacts the growth of the organisation along with the implication of the companies mission na
division in the various projects that will be launched to achieve the objectives.
Sasol faced many difficulties while its global expansion which includes language barrier.
Language is considerably the most important factor when it comes to communication an dif the
company is not able to communicate because of the language barriers, they will not be able to
improve its products(Wei, Thurasamy and Popa, 2018). Cultural differences doesn't allows
people to easy build the trust among things that are out of their belief system for which the
company need to mould its products in a way by which they are able to scale their products.
D2 Critique strategies that can be adopted by organisations operating in a global business
environment, making valid and justified recommendations of how they should adapt
their organisational structure and decision-making processes.
Businesses which seek global expansion need to understand the the external as well as the
internal environment for the development of strategies by which the company will be bale to
launch its products in the respective market. Sasol uses many analysis frameworks which helps
in identifying the major factors that will be deriving the operations of the products in the market
of the new economy. Sasol practised on formulating new relationships and bonds which has
significantly have helped the business in the expansion of its products globally without making
much financial investments. The hiring of right talent has played a major role, as the hired
individuals will be responsible for the operations of the organisation in the foreign land.
The technological transformations have been the most beneficial modification for the
company as it has smoothen the operations of the company, but on the contrasting side the
technological modification have helped the market in producing the substitutes of the products
that Sasol deals with which has been a negative point for the company (Wilkie and Smith, 2021).
Effective solutions needs to be implemented to prevent the company from such situations which
will be done by the employees of the company.

CONCLUSION
This report focused on the global expansion of Sasol and the effects of glocalisation on
the business processes. With the analysis of the cost, market and environment which are essential
elements in deriving the trade and commerce of the organisation. In the later section the analysis
of key factors of the company was made which included the political, social , legal,
technological, environment and economical factors which affects the business externally in the
global market and are responsible for the market position of the company in the foreign market
and the penetration of the products of the products as these factors are the foundation on which
the strategies of marketing are formulated and implemented. This report analysed the challenges
that the company has gone through while expanding its business to new geographical areas. The
experience and the influence of ethical and sustainable glocalisation on Sasol and its business
plans
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