Global Business Environment: Factors, Challenges, and Influences on Organizational Governance, Leadership, Culture, and Functions

This report analyzes the key factors, challenges, and influences of the global business environment on organizational governance, leadership, culture, and functions. It evaluates the impact of globalisation on Sasol Limited, a South African energy and chemical company, and discusses the complexity of strategic challenges faced by organizations operating in a global environment. The report also examines the influences of ethical and sustainable globalisation on organizational functions and evaluates different ways of effective decision-making in a global context.

Unit 18 – Global
Business Environment

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
TASK 1......................................................................................................................................3
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade...............................................................................................................3
TASK 2......................................................................................................................................5
P2 Explain the complexity of strategic challenges faced by organisations when operating in
a global environment supported by specific examples..........................................................5
TASK 3......................................................................................................................................8
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions..............................................................................................8
P4 Evaluate the influences of ethical and sustainable globalisation on organisational
functions.................................................................................................................................9
TASK 4....................................................................................................................................11
P5 Evaluate the different ways decision making can work effectively in a global context.11
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers................................................................................................12
CONCLUSION........................................................................................................................13
REFRENCES...........................................................................................................................15
Books and Journal................................................................................................................15

INTRODUCTION
The international business environment has been defined as an environment that occurs in
many self-governing nations and contains components that are endemic to an organization's
home environment, as well as impacting decision-making processes about resource and
capability use. The term "global environment" refers to the overall context in which an
organisation works. Technology, society, politics, geographic location, and other factors all
play a role. This idea encompasses all facet of a person's financial situation. Profitability,
global expansion, corporate development, international notoriety, and other variables are only
a few of the causes that motivate organisations to expand globally. SASOL Limited, a South
African rapid energy and chemical firm, is the subject of this study. The company intends to
expand internationally. The fundamental motivations of globalisation are discussed in this
article, as well as the challenges that arise when doing business on a worldwide scale. The
report also covers a wide range of aspects that influence a company's operations and decision-
making.
MAIN BODY
TASK 1 & TASK 2( covered in PPT)
:
TASK 3
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
Globalisation creates Impact on the organisation to different kind of organisational aspect.
These kind of aspect an effect of globalisation on this kind of components are below mention:
Organisational governance: Organisational government is the kind of system or it is the
procedure in which the organisation formulate the strategies and sit there objectives in order
to make And implement the decision so that the company can achieve their goals and
objectives. Sasol organisational governance contains And consist of board of directors and
management teams.Apart from this in the Sasol organisation the governance Of the company
is all about increasing and enhancing the organisation value in context of legal, financial,
contractual and different kind of obligation that can be completed and fulfilled by the
globalisation of the organisation. This is the way through which the globalisation create

impact on the organisation corporate governance and this is the way to achieve the
organisational golden objectives.
Organisational leadership: Organisational structure is the concept or is the system that travels
to the organisation capabilities that helps the company to Maintain their operations and
activities in an appropriate manner so that they can achieve their Golden objectives by the
support of rules, regulations, power and responsibilities. Apart from this, the company has
adopted And follow functional structure. Due to globalisation there are number of workers,
number of activities and the objectives of the organisation that has been enhanced and that
lead the organisation to become capable to maintain different kind of situation with the
limited sources as well as with the limited human resources team. Apart from this it also
make the organisation not capable to handle some complex situation and it create impact on
the organisational structure and make it more difficult as well as complex.
Organisational culture: Organisational culture is the concept that refers to the terms and
activities that represent the beliefs, assumptions, attitudes and different kind of voting style of
the voters in context of the Sasol Company. Because of globalisation, the culture of the
chosen organisation become very cross culture in that there is diversification in their
background and diversification in their history, their behaviour of the workers, culture and
many more. Now it become very difficult for the organisation to deal with the diversification
in an appropriate manner so in order to deal with the diversification the organisation is
improving trust and coordination among the employs so that they can create better working
environment in the organisation.
Organisational function: Organisational functional those kind of activities and function that is
carried or adopted by the company so that they can accomplish their goals and objectives.
Due to globalisation, the organisation has been in enhanced and also improved their
departments that lead to improvement in their activities and also helps them to concentrate on
each and every aspect of the company as well as number of job positions and the rules and
responsibilities. Thus, The organisation as well as the globalisation great impact on the
activities by making it more difficult for the company and the global level.
These are the aspect that create impact on the company and also helps them to
accomplish their goals and objectives.
The McKinsey 7s approach: It is a crucial instrument and framework for assessing the
results of executives and enterprises. For effective change management procedures as well as

periodic performance improvements, the McKinsey 7s model specifies seven important
factors for a company that must be targeted and coordinated.
Strategy: Sasol Limited's strategic vision and company's overall plan are well-defined
and understood by all staff and customers. This aids the corporation in managing
performance, directing operations, and developing various approaches that are in line with the
corporate strategy. Furthermore, the creation and implementation of the business plan makes
Sasol Limited's activities more visible and integrates the industry's duties and actions. Sasol
Limited's strategic vision is also significant in guiding worker, staff, and customer behaviors
toward goal accomplishment and achievement. SMART In accordance with the corporate
plan, goals are created with short and long term objectives. Employees can use the company
methods to increase them choose methods and behaviours that will help them achieve the
stated targets and goals.
Structure: The organisational structure at Sasol Limited is leaner, with teaching and
innovative organisations supporting it. Employees build confidence, and they have more
access to knowledge, with fewer management positions among them and greater exposure to
top management and leadership. Furthermore, the lower hierarchy enables Sasol Limited to
make faster decisions and promote career loyalty to the firm. Sasol Limited has a high level
of departmental cooperation. For activities and assignments that involve multiple skills, the
company's divisions frequently form inter-departmental teams. All cross-departmental
coordination is efficient and well-organized.
System: Sasol Limited has specially built tools and processes as measures for monitoring
success and goal accomplishment in each of its defined and delimited systems. Because of
the character of respective duties and tasks, these control and measurements are tailored to
each department. Furthermore, every division creates unique restrictions for members'
performance reviews as well as cross - functional and cross tasks and obligations. Sasol
Limited examines its systems on a regular basis using the controls it has implemented. This
performance measurement is continuous and ongoing. The majority of this is accomplished
via observing and casual conversations. Workers and overarching heads of departments
receive casual feedback on a regular basis as needed.
Shared Values: Sasol Limited's fundamental values are created and conveyed in order to
promote a creative and supportive organisational structure that allows people to perform at
their best while also increasing their motivation and organisational commitment. Sasol

Limited promotes a diverse and inclusive workplace culture. Sasol Limited has an
international reach with production facilities in several countries; as a result, the firm ensures
that its organisational culture is supportive of diversity and that internal rules to combat
prejudice are in place.
Staff: Throughout its global businesses, Company Limited has a significant number of staff.
Workers for various job types and professions are employed both inside and internationally,
depending on the amount of necessity and skill involved. As a result, it is clear that Sasol
Limited employs skilled professionals in their respective job tasks and positions. To
familiarise oneself with the organisation and its ideals, all workers receive on-the-job
training. For level of skill development, both external and in-house training is available.
Skills: Sasol Limited has a remarkable staff with strong capabilities and skills. All personnel
are hired educational qualifications and merit. Sasol Limited takes pleasure in employing and
developing the best employees in order to facilitate learning and expansion. Sasol Limited
has specified responsibilities and job positions, and hires and trains personnel for the
appropriate skill levels. The organisation guarantees that all job conditions are met and that
personnel have the necessary skills to do their responsibilities in accordance with Sasol
Limited's principles, environment, and company objectives and policies.
Hofstede’s Dimensions of Culture:
Businesses and corporations must frequently adapt their business strategy, as well as their
public relations efforts, to meet the needs and desires of the native customs. Local culture,
which consists of a country's, country's, or community in general beliefs, conventions, and
customs, frequently determines and impacts purchasing choices, consumption patterns, and
purchase habits. Businesses like Sasol Ltd often localise their ads and plans to possible
direction to local whims due to the tremendous effect of culture.
Dimensions of national culture: The Hofstede model of cultural identity aids enterprises,
brands, especially businesses like Sasol Ltd in better understanding a country's culture. The
Hofstede model focuses on the following particular cultural elements that assist organisations
and enterprises in making important decisions and developing important promotional plans in
order. Sasol Ltd has employed the cultural components of the Hofstede model in its
development and internationalisation efforts. Sasol Ltd has also adjusted and revised its
marketing approach and efforts to reflect local culture and way of life.

power distance index: The severity and extent of imbalance that occurs among organizations
and social groups of people in the organisation based on the authority they have is referred to
as power distance. The general public accepts this inequity. In general, Sasol Ltd has a low
power distance culture. The organisational structure of Sasol Ltd is flatter. Because of the
lower organisational hierarchy, leadership is more visible and accessible. Employees will feel
more trusted and a feeling of belonging as a result, and they will be more motivated to
perform at their best.
collectivism vs. individualism: Employee privacy is important to Sasol Ltd, both in the
workplace and in their personal lives. The company does not intrude on an owner's individual
life and provides them with the necessary privacy as and when requested, as well as offering
aid when necessary.
Masculinity versus femininity: The entire corporate culture is more influenced by life
quality and employment standard of living. Less position is based on compensating variables
and rewards, and more competitiveness is dependent on the nature of the work assigned.
P4 Evaluate the influences of ethical and sustainable globalisation on organisational
functions.
Data, information, products, services, technology, and a variety of other items are ethically
transferred from one organisation to another in the process of ethical globalisation. It is a
broader term that considers a variety of stakeholders including as shareholders, the
government, the community, suppliers, workers, and consumers, among others. The

overarching purpose is to urge each worker to work ethically toward accomplishing an
entity's goals and objectives. Maintaining a position and gaining a competitive edge are
critical. Profit, sales, income, market share, and public image are all positively impacted by
carrying operations.
Sustainable globalisation refers to moving commercial operations beyond borders in order to
enable businesses achieve a level of stability that allows them to compete in a competitive
market. It will enhance the company's earnings, allowing it to continue indefinitely. Under
this, a corporation adjusts its business structure to meet the needs of the worldwide business
market, which is important for long-term viability. Conducting company on a global scale
can be difficult owing to the numerous legal formalities and regulations that are required for
development and survival in today's competitive environment. There are a variety of
functions that might have an influence on the business. The following are some of the
organisational actions and activities:
Human resource management: This function is concerned with selecting the best personnel
for each role in order to ensure that work runs properly. The HR department is in charge of
identifying potential and appropriate employees who will use their talents and expertise to
help the firm achieve its goals and objectives. In the framework of SASOL, the human
resources department must determine all relevant laws that must be followed. When a
corporation operates outside of its home nation, it is required to legal requirements that may
have a detrimental impact on the firm. SASOL has recognised the necessity of worker
diversity as well as meeting their expectations, thus it has chosen human practises in order to
stay competitive. Moreover, SASOL fosters a positive and moral working atmosphere by
delegating authority to workers so that they may work toward the firm's goals and objectives.
Marketing is a difficult but vital duty that a firm plays in raising awareness of its goods or
services. The most important task is to find target customers by analysing their needs and
aspirations in order to create products that would provide them with a high degree of
enjoyment. SASOL, for example, has a strategy of selling things at a cheap initial price to
attract new clients and establish a substantial market share in international markets. SASOl's
marketing department also develops a wide range of promotional activities that will be
implemented internationally. Local conventions influence how they are modified. SASOL
also distinguishes its product range in order to focus on the things that would help it maintain
its position over time.

Finance: This function is responsible for ensuring cash flow in order to keep business
operations running smoothly. Every business must raise finances in order to continue
operating without interruption. In the case of SASOL, the finance manager is in charge of
obtaining finances on the basis of different business requirements. It should be collected in a
morally responsible manner. In addition, the finance department allocates funds appropriately
so that high-quality items may be made. However, an estimate should be created in order to
undertake a study of market trend and other factors that aid in meeting client requests.
As a consequence of the critical evaluation, a variety of features and components have
been investigated to see how they affect the company's business (Slack and Brandon-Jones,
2018). The departments of human capital, finance, and advertising should collaborate during
the expansion of a company outside national lines. In order to maintain long-term viability,
managers and other leaders must act ethically. Types of actions and strategies might be added
to help attain goals.
TASK 4
P5 Evaluate the different ways decision making can work effectively in a global context.
Data exchange as well as the propagation of traditional concepts and values have been
made easier thanks to globalisation. As a result, managers have been pushed to change their
leadership styles from traditional authoritarian to participatory transformational. Employees
no longer demonstrate "blind loyalty" to the corporation and its executives; rather, loyalty is
earned via management's rational judgments and actions. Globalisation and transformational
management can help companies achieve remarkable results in a fiercely competitive global
environment. Transformational leaders will encourage correct and successful strategic
execution when resources and talents are dispersed appropriately. Customers may rapidly
acquire information and compare costs and quality of services and items offered throughout
the world. As a result, companies have had to pay more attention to customer needs. As a
result, firms are decentralisation and transferring decision-making power to local centres, as
well as integrating their goods and services. Because personalisation of products and services
must be balanced with standardisation procedures, headquarters can no longer dictate what
must be done. This is when the organisation can adapt swiftly to changing client needs—
strategies must be altered and changed as needed. This entails making educated globalisation
decisions, such as which international markets to enter, how to enter those markets, and when

to leave undesirable ones. Part of internationalisation is trade liberalisation across national
borders to allow for greater incorporation of manufacturing processes and capital markets, as
well as sources of funds, technical discovery, knowledge, workforce, cultures, products, and
aid among many various nations, due to increased financial development and growth. As
international trade barriers are lifted, allowing open trade and competition, national firms are
less sheltered from overseas competitors. Export trade is a strategic decision made by a
company to grow into new markets, create a sustainable competitive edge, and increase sales
volume and market share in new countries and/or regions.
While international variety can assist minimise the dangers of globalization, most diversity
efforts fall short of achieving the desired competitive advantage. This implies that while
designing an organization level, a corporation must perform market research and make
educated decisions. Globalization has an influence on judgment and direction because it
necessitates the adaptation of leadership styles, the strategic utilisation of international
diversity, and the removal of global trade obstacles. As a result, the difficulty of making
decisions and implementing strategies has increased. The construction of accessible
production chains with a variety of infrastructure that allows for supply chain
interdependencies makes this simpler.
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.
In today's hyper-competitive environment, every company wants to expand its worldwide
operations to increase earnings and customer base (Amran and Devi, 2014). Specific
processes must be followed when a firm expands its activities abroad to ensure that it is done
properly and efficiently. SASOL may easily and quickly spread over the globe via a
multitude of methods. SASOL might pursue foreign markets in a variety of ways.
Licensing: This is a process in which a corporation provides a licence to that other company,
which subsequently does business using the original company's name. This may be the ideal
technique for a firm to extend its business abroad. SASOL, for example, does have the ability
to demand them a charge or fee for using the institution's technologies and trademark. A
contract is made in this scenario among two businesses: the licensor and the licensee. The
first is an organisation that grants license to the others, whereas the second is a company that
acquires a licence in order to conduct business. This offers both advantages and problems for
SASOLIn this aspect, the advantage would be that companies take the opportunity to make
active income as well as the simplicity with which they may grow into a new location,

producing opportunities for both organisations while decreasing risks. Furthermore, they have
the ability to provide employment opportunities for both the host and the host nation's
residents. The drawback of this technique is that the licensee is entirely dependent on the
licensor, increasing market competition. However, the licensee corporation must pay a large
amount of money in order to secure a licence.
Merger: Merger is a business reaction in which different or more corporations join forces to
form a new legal entity. Horizontal, vertical, and multinational merger are the three basic
forms of mergers. Businesses at the same phase in the same sector unite in a horizontal
integration to cut costs, expand product options, or eliminate rivalry. Many of the biggest
merges are horizontal acquisitions to generate economies of scale, however in other
businesses, investing in R&D to find new products/technology is critical. A merger allows
the company to become more profitable and allocate more resources to research and
development. A merger can restrict competition and grant monopolistic power to the new
company. With reduced competition and a larger market share, the new company can usually
raise consumer prices.
Acquisition is a quick strategy to expand a company. It also reduces retribution from current
corporations when seeking new markets. However, some mergers and acquisitions do not
work out. Mergers and acquisitions fail at a rate of 70 percent to 90 percent of the time.
Synergy failure and cultural incompatibility are two reasons for failure. Expansion of the
company's products, services, and long-term prospects. A target company could be able to
provide you with items or services that they can offer from their own networks. Using
combined marketing budgets, enhanced purchasing power, and lower expenses, they may
lower they costs and overheads.
The process through which a corporation distributes or spreads its products and services of a
particular market is known as exporting. If SASOL follows this plan, it will be able to sell its
products on a global scale, which will provide them with a number of benefits. As a
consequence, SASOL will be able to increase its sales volume and market exposure,
providing it a competitive advantage. When this company employs exporting to aid with
expansion, however, it will encounter stiff competition. They may also face obstacles such as
export rules from other nations, which will need the development of strategic plans in
accordance with those regulations.

FACILITATE INTERNATIONALISATION BY OVERCOMING KEY BARRIERS
The absence of sufficient resources is one of the most major barriers to internationalisation.
This might be a major stumbling barrier for companies trying to develop internationally, as
no action can be taken without the use of money. SASOL can handle this by utilising
techniques like as mergers and acquisitions. Cultural differences may also be a stumbling
block or hindrance to worldwide expansion. Every country has its own culture, thus SASOL
must learn about a new country's culture in order to get entry to a foreign country swiftly and
easily. Regulation is generally driven by necessity and is intended to safeguard end users. It
oversees their ability to fulfil safety requirements, data governance, and financial propriety,
in addition to the above-mentioned trade of products. While regulatory costs can be
substantial, especially if a company is out of sync with a country's regulatory environment,
they might be justified when weighed against by the economic cost of being not consumer or
sacrificing operational savings. When most businesses were compelled to comply with
GDPR, they noticed that the datasets were shorter but much more efficient overall since they
only addressed a most correct customer categories.
Recommendations
 This is recommended to the company that they should follow different kind of
internationalisation strategy in order to achieve their goals and objectives.
 It also advised to the company that in order to bring more opportunities for the
company they should focusing on the acquisition, merger and different kind of
strategies.
 It is also recommended to the company that they should identify the external as well
as internal factors that create impact on the company.
CONCLUSION
According to the aforementioned paper, there are several sorts of elements existing in a
corporate environment that have a significant role in influencing organization tasks and
processes. These elements have both good and negative effects on a business unit. As a result,
it is critical for businesses to improve their effectiveness by utilising a variety of strategies
and policies, as this will enable them to expand their total market share as well as their
opportunity area. As a result, it is critical for businesses to accurately identify business
environment aspects in order to assess their strengths and weaknesses and improve their
market efficacy. hurdle. Moreover, it is critical for businesses to assess policies, laws,

conventions, and laws in the nation where they wish to develop their business entity in order
to fulfil their organisational duties as efficiently as possible.

REFRENCES
Books and Journal
Jena, L.K. and Pradhan, S., 2020. Workplace persuasion: Conceptual model, development
and validation. Global Business Review, 21(2), pp.567-585.
Miller, E.L., Beechler, S., Bhatt, B. and Nath, R., 2017. The relationship between the global
strategic planning process and the human resource management function.
In International Human Resource Management (pp. 285-299). Routledge.
Asif, M. and Majid, A., 2018. Institutional quality, natural resources and FDI: empirical
evidence from Pakistan. Eurasian Business Review, 8(4), pp.391-407.
Mohamad Radzi, K., Mohd Nor, M.N. and Ali, S.M., 2017. THE IMPACT OF INTERNAL
FACTORS ON SMALL BUSINESS SUCCESS: A CASE OF SMALL
ENTERPRISES UNDER THE FELDA SCHEME. Asian Academy of Management
Journal, 22(1).
Gendreau, B.C. and McLendon, T.E., 2016. 2016 Latin American Business Environment
Report.
Mukherjee, S. and Pyne, S., 2016. Cooperatives as alternative form of organization for CSR
effectiveness: Insights from Rabindranath Tagore. Global Business Review, 17(6),
pp.1497-1509.
Collings, D.G. and Isichei, M., 2018. The shifting boundaries of global staffing: Integrating
global talent management, alternative forms of international assignments and non-
employees into the discussion. The International Journal of Human Resource
Management, 29(1), pp.165-187.
Costa, J. and Rodrigues, C., 2020. Why innovative firms do not rely on universities as
innovation sources?. Global Business and Economics Review, 22(4), pp.351-374.
Shammugam, S. and Marimuthu, M., 2019. Does Conflict of Top Management Team Impact
the Firm Performance? A Conceptual Review on Large Companies in Malaysia. Global
Business & Management Research, 11(2).

Sarala, R.M., Vaara, E. and Junni, P., 2019. Beyond merger syndrome and cultural
differences: New avenues for research on the “human side” of global mergers and
acquisitions (M&As). Journal of World Business, 54(4), pp.307-321.
Stryjakiewicz, T., 2018. Paths of industrial transformation in Poland and the role of
knowledge-based industries. In Knowledge, industry and environment: Institutions and
innovation in territorial perspective (pp. 307-330). Routledge.
Iyer, R.D., 2016. A study of work engagement among teachers in India. Global Business and
Management Research, 8(1), p.34.
Biancone, P.P., Secinaro, S. and Brescia, V., 2017. Popular financial reporting: Results,
expense and welfare markers. African Journal of Business Management, 11(18),
pp.491-501.
PPT screenshot