Global Business Environment: Factors Driving Trade and Commerce

This article explores the impact of globalisation on organisational leadership, governance, functions, culture and structure. It analyses the key factors driving global trade and commerce, including market, cost, competition and environment. The article evaluates the complexity of strategic challenges faced by companies operating in an international environment, supported by examples. It also discusses the various ways of decision-making that can work effectively in the context of globalisation, and the different ways to internationalisation and barriers involved.

Global Business
Environment

Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................4
Analysing the key factors of market, cost, competition and environment which drives global
trade and commerce.....................................................................................................................4
Explaining the complexity of strategic challenges faced by company when operating in an
international environment supported by certain examples..........................................................6
PART 2............................................................................................................................................8
Evaluate how globalisation influences organisational leadership, governance, functions,
culture and structure....................................................................................................................8
Evaluate the influences of sustainable and ethical globalisation on the functions of
organisation................................................................................................................................10
Evaluate the various ways of decision-making that can work in an effective way in the context
of globalisation..........................................................................................................................11
Determine different ways to internationalization and barriers involved...................................12
CONCLUSION..............................................................................................................................13
REFERNCES:................................................................................................................................14
Books and Journals:...................................................................................................................14

INTRODUCTION
The practise of expanding different company tasks and activities on a worldwide scale
can be used to describe the concept of globalisation. The development of service and product
manufacturing, as well as international trade, is facilitated by globalisation, which also assists in
linking different commercial organisations on a worldwide scale. A company’s resources as well
as the decision-making process both impacted by the exogenic factors present in the many
countries’ diverse environments which is term as the global business environment(Kumar, Goyal
and etl,al.,2021). This project is based on the organisation SASOL Ltd. This is the faster growing
energy and chemical company. The firm headquarters are situated in Cape Town, South Africa.
The company has its worldwide presence in various locations like New York, Australia,
Frankfurt, Gabon and Mozambique with counted UK. This project can be considered the
different factors of market, cost, competition and environment that drives the global trade and
commerce. The company faces various challenges and complexities which operates the
company’s business in environment internationally. This can be discussed more how
globalisation has an influence organisational leadership, culture, structure, governance and
functions. However, this will show the sustainable and ethnical effects on organisational
functions. There are different way of decision making which can be very productive manner in
the condition of globalisation. At the end, this can be determined various ways to
internationalization which the company will be adapting. This will consist with various barriers.

PART 1
Analysing the key factors of market, cost, competition and environment which drives global
trade and commerce.
Globalisation can be defined to the process which develops the business at the global stage
which can be helpful to the firm in generating more sales and profit. In the case of firm
SASOL, there are following main factor which can drive the global and trade market.
 Cost- This factor cost comprises all of the costs that the business incurs as it moves from
one nation to another, with the main goal being to reap the rewards on a worldwide scale.
On the other hand, this aspect will also include giving customers more options, which not
only promotes business growth but also enables greater global economies of scale. Due to
this feature, SASOL will experience extremely high profitability through saving money
on a global or international scale(Ko.Liu and et,al.,2021). In a nation where a company
may readily find customers and a variety of resources for very little money, the manager
of the organisation must focus on the varied operations of successful businesses. In order
to do this, SASOL may export its finished products in large quantities around the world,
which lowers production costs and subsequently boosts the company's profit and sales
margin.
 Market- Firm will be highly focused on the drive-in recent years. This initiative provides
different opportunities in the domestic market which will be helpful if the firm is
expanding their firm’s activities of business at the global level. In the case of SASOL, the
manager of the firm will be able be attract huge amount of the market area which will
help the firm not only to attain more profit but also to support the long-time sustainability
of the corporate in the marketplace. However, this is very significant for the firm to
attract the attention to identify the new costumer and the marketplace also requires. Due
to this, the business is able to satisfactorily meet customer demands and wants, resulting
in increased revenue and success for SASOL in the international market.
 Competition- This is very hard for the different firms to function in the global market as
the existence of tough competition and that is completed in the development of
globalisation within the world of business. Competition between firm are on similar
sector and then operate that increases at global stage of market the reason is globalisation.
In case of SASOL, the company operates its business in very different region of the

countries and however this the firm has to face more competition in the target market at
the global stage.
 Environment: This factor signifies the power of environment the firm performs their
different tasks and all the activities which directly aim to achieve all the set of objectives
of the company’s business and will also attain all the position of sustainability in the
target market. Social, political, technological and legal aspects of the environment have a
proper impact on the globalisation idea. In caser of SASOL, the manager of the firm must
pay close attention to how different company’s strategies and policies are outlined. These
principles must be success for the business and this can aid to attain a long-term position
which is sustainable in the severely competitive international market(Mohamed,2018).
The firm SASOL will be able carry out the profitable activities or operations at the global
stage which is highly effectively as the industrialization drive, that will also help the firm
to draw in a sizable base of costumer.
Pestle Analysis:
The pestle analysis is the tool and techniques which are used from the different enterprise in a
manner to analyse and identify the different external facto which effects the operation of the
organisation’s business. The proper conduct of this method can be helpful for the firm to perform
the business activities in very effectual manner and which provide different opportunities to
enlarge their business of the company on global level. In the case of SASOL, the Pestle analysis
will be discussed beneath:
Political factor: This factor plays crucial role in affecting the operation of company. This
includes tax rates, political interferences, political stability situation and more. In the case of
SASOL, the government of the UK is very continuous and also executes the low tax which
effects certainly on the firm’s business on global stage(Mondliwa.Ponte and et,al.,2021). Now,
the manager of the firm will be focused on the rules and regulation of the government so that the
company will operate their business’s activities in very effective manner and also adores the long
run sustainability on the global market.
Economic factor: This element has a significant impact on how the business operates. A
few examples of this component are the nation's gross domestic product, cost, profit, wages, and
growth rate. In the case of SASOL, the organisation manages its responsibility of operating on a

global scale such that the business can primarily function in those nations with a stable economic
backdrop. With increased efficiency, the company's visibility and reputation in the worldwide
market improve.
Social Factor: The social factor includes the change in taste, beliefs, values, fashion
change, perception and also social problems and many more. In the case of SASOL, the manager
of the enterprise will be focusing on the needs and demands of the group of people within the
society and this will also provide the quality of commodities that is acceptable by the consumer.
Which helps the company SASOL to achieve a position of success position of the marketplace
and do develop the business of the company globally.
Technological factor: This factor is very crucial for the firm which brings various
opportunities and also give benefits for the enterprise. The firm needs to be invested their amount
in advancement of technology in a manner to operate the business activities effectively. In case
to SASOL, the company operates the organisation at international level, they need to use the
upgraded technology to perform their different operations as the firm can fulfil the demand of
international market and also earn more sales and profit.
Legal factor: The legal factor includes various laws, rules and regulations which imposes by
the laws of court in way of welfare of the employees and people of the society. In case to
SASOL, the business must concentrate on many laws, that includes the pertaining to equity,
women's empowerment, and many other topics(Moon,2022). Along with paying workers
according to talent, the firm also pays care to their safety and health. They may fruitfully run
their firm on the international scale by doing this.
Environmental factor- This includes all of the legislation and guidelines created by the
government with regard to environmental protection. In the case of SASOL, the organisation is
required to abide by the laws created to ensure the safety of the water and air, and this can't hurt
the members of the environment or society. Additionally, this makes it easier for the company to
conduct business on a global scale.
Explaining the complexity of strategic challenges faced by company when operating in an
international environment supported by certain examples.
The concept of globalisation is not only to help the firm to perform the business activities but
also to be helpful for the enterprise to formulate the best strategies and policies for improved
results. As the company operates their operations globally so that this can a huge chance of

complications in the target market which is faced by the company in the functions. In case of
SASOL, there are complications which are to be discussed below:
 Entry Fees: If the company wants to take their business global, they will have to deal
with this issue. The organisation will concentrate on the export and franchising costs
when it comes to SASOL. The organisation will concentrate on opening new outlets in
various countries with the aim of increasing sales and profit. However, there is a risk that
SASOL may eventually have to deal with the complexity of paying entry fees in order to
conduct business in their local markets. This has a direct impact on the company's
business's profit and sales margin.
 Losing of cultural identity: This is very hard for the enterprise to understand and adapt
the different business culture and environment of the firm operates their functions
internationally(Nandonde,2019). In case of SASOL, this is very vital for the company to
identify the different environment of business which do not only be helpful for the
company to achieve a position of success but which will be helpful to run the business
smoothly.
Conclusion
This might draw the conclusion that import and export are highly important to the company since
they create new and exciting prospects for growth and development as well as to support and
diversify the company's growth. Additionally, this can assist the organisation become more
productive and facilitate a more seamless flow of corporate operations.
REFERNCES
Ko, Y.C., Zigan, K. and Liu, Y.L., 2021. Carbon capture and storage in South Africa: A
technological innovation system with a political economy focus. Technological Forecasting and
Social Change, 166, p.120633.
Kumar, S., Sureka, R., Lim, W.M., Kumar Mangla, S. and Goyal, N., 2021. What do we know
about business strategy and environmental research? Insights from Business Strategy and the
Environment. Business Strategy and the Environment, 30(8), pp.3454-3469.
Mohamed, M., 2018. Challenges and benefits of industry 4.0: An overview. International
Journal of Supply and Operations Management, 5(3), pp.256-265.
Mondliwa, P., Roberts, S. and Ponte, S., 2021. Competition and power in global value
chains. Competition & Change, 25(3-4), pp.328-349.
Moon, H.C., 2022. Global business strategy: Asian perspective. World Scientific.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-6

PART 2
Evaluate how globalisation influences organisational leadership, governance, functions, culture
and structure.
McKinsey 7s model is a tool which helps and supports the firm which analysis the
“organisational design”. The main objective inside the model is to reflect how the firm can
achieve usefulness while interactions of 7 major components of model. In the case of SASOL,
this can influence the globalisation on organisational leadership, culture, functions and
governance which are discussed underneath:
 Structure: This step indicates a way in which the firm is vastly planned. In the case of
SASOL, this is very vital to connect correctly with one other and also to recognise the
responsibilities and the roles more specifically (Pospisil and Zavodna,2022). The firm is
required to have an effectual organisational structure like divisional structure, these are
divided into the areas of business which simplifies with more understanding of
implementation of work even at the global level.

 Strategy: This model's component displays the firm's plan, which was created and
documented with the intention of ensuring efficient operation of business processes. In
the instance of SASOL Ltd, the organization's manager bears a great deal of
responsibility for achieving the goals of long-term competitive advantages that would
improve the brand's image and also permit more profitability within the company's
operations. This might be done while fostering a positive work environment and culture
within the company, which will raise employee motivation levels and facilitate the
strategy's effective implementation.
 Skill: This reflects the various competencies and capabilities in the employees that aids
the workforces to move forward and also achieve all the objectives of the enterprise
(Minkov and Kaasa,2020). In the case of SASOL, the company’s manager formulates
various regulations, policies and rules for the employee’s safety and welfare which
satisfies every staff member of the enterprise. This also been helpful in encouraging the
person can work hard to compile the task with better competencies and productivity. This
do also support in attaining the more objectives and productivity of the business. System: This element represents the firm's infrastructure and technical capabilities, which
will support keeping the business running smoothly. In SASOL, the company, the firm is
paying more attention on the extreme utilisation of the most recent technology in order to
have smooth operational flow at the global level and respects the precise decision making
to accomplish the long-term sustainability.
 Staff: This factor involves retaining, training, compensating employees, hiring,
developing selecting, training and retaining within the enterprise, who has capability and
talent. In case to SASOL, the Human Resource manager is likely be focusing on the
workforces then they will be facilitated into proper training and developing programmes
and also sufficient compensation is provided to the workforce which can be in the
company for longer run. This will create long-term sustainability which offers potential
products and services in the target market. Style: In this step, senior leaders of the company adhere to the organization's code of
conduct to make effective decisions that are well considered. In the case of SASOL, the
manager in a senior position focuses more on the rules governing business operations

with a democratic leadership style, giving everyone an opportunity to express their ideas
and opinions in relation to all business decisions that are directly related to globalisation.
 Shared values: The vision, goals, vision and values of enterprise which are referred as
major foundation of business of the enterprise with possessing an effectual role in the
arrangement of function of business. In case of SASOL, the manager of the enterprise is
required to create vision and mission that leads to workforces of the enterprise to perform
excellent in the firm even at global stage.
Application of Hofstede model of culture-
This is crucial to note that when the firms turn their business at
global level, there are some promotional factors that influences the purchase decision of
consumer. With the help of Hofstede model of culture, which effects the various factors that be
understood by this following manner: Power Distance: This type of culture supports strong hierarchies as well as powerful and
prominent leaders. In the case of the corporation SASOL, senior management makes all
decisions without consulting anyone else's thoughts or having a discussion about them. Individualism and communities: People across the globe which are aimed while
promotion which is considered how the commodities and services are facilitated benefits
of freedom and time saving and also which appreciates for the effective group of people.
 Masculinity and trade role: A market's strong masculinity culture may allow for the
separation of certain of its role-specific traits (Crane, Spence and et,al.,2019). Each
product should use the appropriate marketing strategy, taking into account the unique
market circumstances. Tolerance and ambiguity: In this culture, tolerance and ambiguity are the main factors
which needs to be measured. The certain firm determines their various forms of culture
then tailor-made their tasks of promotion consequently.
 Long-term orientation: This type of culture encourages not only highlighting traditions
and customs but also taking into account one's connection to the past. If SASOL is to
successfully promote its current organisational structure, the company has committed to
embracing long-term perspectives.

 Indulgence and quick gratification: If a company has a huge level of cultural
knowledge, this can be built flexible social norms and regulation; or else, it risks creating
stiff social rules and regulations.
Evaluate the influences of sustainable and ethical globalisation on the functions of organisation.
The ethical factors in globalisation can be described as a process where products, data,
services, technology, and information, among other things, are the other variables that function
morally and ethically. The term "ethics" can be described as the explanation of the difference
between what is proper and wrong behaviour. This encompasses a broad range of behaviour
involving the government, employees, consumers, suppliers, and more (Bilan, Kot and
et,al.,2020). The primary goal of doing business in an ethnically diverse manner is to develop
employees and staff members who intend to work in that fashion. This helps the company
operate its operations efficiently with the particular company, which can produce sustainability
for a longer length of time even internationally.
Sustainability-related factors denotes to the variables which supports the firms
to have a global presence and also to achieve competitive benefits on international stage. The
firm places a huge importance on profitability in way to maintain the survival within the
international marketplace, this also allows the development, potential and growth, development
to stand out between its competitors. In case to SASOL, factors which could have a significant
effect on the firm are services, human resources, advertisement of commodities, economies of
scale and skilled workforce and when highly knowledgeable which contributes towards the new
marketing strategies. And also, the innovation, which improves the consumer base to brand. The
change will also have a encouraging effect on the profitability of the firm.
Evaluate the various ways of decision-making that can work in an effective way in the context
of globalisation.
The business that wants to expand internationally needs to be competitive in a number of
areas, such as using cutting-edge technology, moving facilities more quickly, and managing
effective global communication. In the case of SASOL, the organisation needs to make various
decisions based on time zones, cultural traits, as well as various policies and rules and all the
standards of the global market in order to function effectively at the international level.
Examining and analysing the numerous aspects of an unclear international market is difficult, but
quick decisions must be taken in many cases (Ambos, Kraus, 2020). This kind of decision-

making will allow a company to forge opportunities before its competitors do. There are two
options for judgments in the SASOL dilemma, and depending on the circumstances, these
decisions must be taken very carefully.
Proactive decision-making: This kind of decision-making will be measured as the extreme
strategic approach in the enterprise. This allows the enterprise to look for the significant result
which will be practical in the real world and also to make finest use of it. This also agrees to
utilise the experience and knowledge in the enterprise. Nevertheless, proactive decision-making
let the company to select further reasonable actions.
 Reactive decision-making: This describes the stage, for illustration, that comes after
being inactive. Although not the most time-efficient choice, this one can nonetheless be
useful in some circumstances. These only functions when it is necessary. Making quick
decisions can be difficult because it can cause the organisation to miss out on important
commercial prospects.
From the aforementioned methods of decision-making, it can be seen that the organisation will
make decisions proactively when the firm is proactive rather than reactive in the targeted market
or when it takes the initiative to take genuine actions rather than just respond (Shabunina, 2020).
Additionally, there are some additional aspects that should be taken into account when working
in the global market.
Determine different ways to internationalization and barriers involved.
With the case to SASOL, there are different routes to internationalisation which can be
used from the enterprise to enter into the global market: Licensing: This method includes turnkey contracts and franchising. This will also consist
the term that is referred as contract manufacturing. This referred also to the process of
charging royalty for the consuming the name and its expertise of the enterprise.
 International agents and distributors: This might be regarded as the fundamental and
primary stage in breaking into a foreign market. Agents can be a corporation or an
individual working under a contract with another firm company to represent one or more
ownership in a certain country (Nambisan, Luo and et,al., 2019). Distributors, on the
other hand, although if they are connected to the idea of agents, control the finished
items, and have clear incentives for the services and products.

 Joint ventures: This can be characterised as the formation of a new company with the
participation of other parties who work for a portion of the company. One of the
fundamental strategies for entering the global market is this. Strategic alliances: This outlines the agreement between two parties to share resources in
order to launch an appropriate, mutually beneficial scheme. The organisation will be
independent during the entire process. Within the firm, there is a legal partnership for
this. However, compared to a joint venture, this is less complicated and binding.
Barriers to internationalization: Financial barriers: Usually, small and medium enterprise has this kind of behaviour in
global market which concern physical and financial resources. This comprises scarcity of
resources, unstable and undefined cost, lack of sources of finance of limited access to
capital and global market etc.
 Managerial and market-based barriers: This kind of behaviour which is handled by
approximately every enterprise in international market (Shandu, Muyengwa and
et,al.,2020). This majorly consist the behaviour and attitude of manager of the firm, lack
of knowledge, lack of skills about the principles of government, lack of knowledge and
experience within the global market and many more that includes the target, manager and
marketplace based on challenges.
 Industry-specific barrier: This kind of behaviour is the greatest significant barrier that
cause burden on the global enterprise in global target market. Competitors within the
global market is one of the utmost examples.
CONCLUSION
The project can be summarised as the term "globalisation" refers to the process by which SASOL
can export their final products to other countries, as well as the key elements that influence
commerce and trade, such as price, market, and so on. This project will also demonstrate the
granular analysis of SASOL's organisational structure, the difficulties it faces in the global
marketplace, and the organisational functions, structure, and culture that affect how the company
operates. The model utilised by the company Hofstede's Dimensions of Culture and McKinney
7s has further elaborated on this. This research also demonstrates how corporate ethics and
sustainability factors affect how globalisation operates, which in turn affects how diverse

decisions are made on a worldwide scale. In the end, the project has the path that the
organisation can take to adapt internalisation and the major obstacles.

REFERNCES:
Books and Journals:
Ambos, T.C., Cesinger, B., Eggers, F. and Kraus, S., 2020. How does de‐globalization affect
location decisions? A study of managerial perceptions of risk and return. Global Strategy
Journal, 10(1), pp.210-236.
Bilan, Y., Hussain, H.I., Haseeb, M. and Kot, S., 2020. Sustainability and economic
performance: Role of organizational learning and innovation. Engineering Economics, 31(1),
pp.93-103.
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press, USA.
Minkov, M. and Kaasa, A., 2020. A test of Hofstede's model of culture following his own
approach. Cross Cultural & Strategic Management.
Nambisan, S., Zahra, S.A. and Luo, Y., 2019. Global platforms and ecosystems: Implications
for international business theories. Journal of International Business Studies, 50(9), pp.1464-
1486.
Pospisil, J.Z. and Zavodna, L.S., 2022. An Insight to the World of Female Entrepreneurship:
Systematic Literature Review of the Phenomenon using the Mckinsey 7S
Model. Foundations of Management, 14(1), pp.51-66.
Shabunina, V., 2020. MAIN LINGUISTIC BARRIERS OF GLOBALIZATION
PROCESSES. Збірник наукових праць ΛΌГOΣ, pp.141-142.
Shandu, P.M., Kallon, D.V.V. and Muyengwa, G., 2020. Cost analysis of soot blower use for
boiler maintenance at sasol secunda. In Proceedings of the International Conference on
Industrial Engineering and Operations Management (Vol. 59, pp. 345-356).