Global Business Environment: Factors, Challenges, and Influences on Organisational Culture and Structure

This report analyses the different factors of cost, competition, environment, and market which drive global commerce and trade. It evaluates the influences of sustainable and ethical globalisation on organisational functions and how globalisation shapes the strategy and decision-making of multinational organisations. It also identifies key barriers for entering and operating in international markets and suggests various strategic routes to internationalisation which Sasol can use to expand in different geographical boundaries.

Global business
environment

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Analysation different factors of cost, competition, environment and market which drives
global commerce and trade..........................................................................................................1
PESTEL Analysis .......................................................................................................................2
Complexities of strategic challenges that are faced by business while operating in global
environment.................................................................................................................................3
TASK 2............................................................................................................................................4
Evaluation of how global influences organisational leadership, functions, governance, culture
and structure ................................................................................................................................4
Evaluate influences of sustainable and ethical globalisation on organisation functions.............6
Critically evaluate the influences of globalisation in application to suitable models and
theories linking to organisational culture and structure. .............................................................6
How the strategy and decision-making of this
multinational organisation are influenced and shaped by the global market forces...................7
Identify the key barriers for entering and operating in international markets, and articulate
various ways decision making can work effectively in a global context....................................7
Suggest various strategic
routes to internationalisation which Sasol can use to expand in different geographical
boundaries....................................................................................................................................8
Provide recommendations how organisation should adopt their decision making processes and
organisational structure so that they can respond international opportunities and challenges....8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Globalisation can be referred to as taking the activities of the business into the
international boundaries. It provides so many opportunities for the organisation to increase their
revenues in the international market and through which they can effectiveness establish their
business in the global market (Turnbull and Haddud, 2018). On the other hand, global business
environment can be defined as the all the factors that are internal or external that can affects the
operational activities of the business in the marketplace. For this report, Sasol has been
undertaken into the account. This is a chemical company located in Sandton, South Africa
established in 1950. they are involved into commercialises technologies, produce liquid fuels
and chemicals produce electric technologies etc. In this report, there will be the discussion on the
different kinds of factors market, cost, competencies, and the environment in which organisation
carries out their business operations. There will be the analysis of the challenges and the
problems that is faced by the organisation in the global market. Along with that there will also be
the discussion on the concept of the globalisation that can impacts the several factors such as
leadership, culture and motivation. After that there will be the analysis of the sustainability that
can influence the working of the organisation. After that there will be the evaluation of the
decision that are taken by the management. At the end of the report, there will be the discussion
on the various ways to enter international market along with its barriers.
TASK 1
Analysation different factors of cost, competition, environment and market which drives global
commerce and trade
Cost: It can be defined as all the expenses that is bear by the company in order to carry
out the operations at the workplace. One of the main aim of the organisation is to reduce and
control the expenses through which they can increase the profitability in the marketplace. In
relation to the Sasol, it can also help them in stand out from the competition. As they become
able to provide effective services to the customers in the market. If they minimise the costs they
will become able to directly increase the profits. Management department of the company should

focus on to reduce the costs from the wasteful activities which will helps them to maintain
profitability level in the organisation. It becomes very important for them to effectiveness carries
out the research and development program in order to effectiveness utilise the funds.
Market: Management department of the Sasol is effective in order to take the activities
in the international market. They have adopt this strategy in order to make more profits in the
market (Duháček Šebestová and Lejková, 2020). It becomes very important for the company to
analyse the new marketing conditions through which they can provide food products according
to needs and wants of the consumers. It will facilitate them to attract new customers towards
their business activities. Implementation of the effectiveness market strategies helps them to
retain themselves in the international marketplace.
Competition: In relation to take the activities in the international market, it becomes very
challenging for them to beat the competition in the market. It creates so many challenges for the
organisation to survive in the international market as they have to face lots of competition.
Concept of the globalisation increases the competition between two companies of the same field
as each and every organisation wants to established themselves on the global level (Ruão and
Lopes, 2022). In regards to the Sasol, they are operating their business activities from the
different parts of the country. So it becomes very challenging for them to carry out the operations
with so many competitors present that are already offering food products in the market.
Environment: It can be defined as all the activities of the business that are performed in
regards to the environmental factors. In relation to the activities of the organisations impacts the
quality of the nature to a great extent. It becomes very important for the organisation to adopt
sustainability measures in order to promotes the healthy activities in relation to the nature. In
relation to the Sasol, managers of the company should make effective policies in order to sustain
the quality of the environment (Moore, Brandl and Dau, 2019). By implementation of the these
policies at the workplace will help the organisation to make an effective brand image in the eyes
of the customers.
PESTEL Analysis
It can be defined as the effective analysis that is undertaken by the organisation in order
to analyse the external factors of the business. These factors can impact the operational activities
of the business activities to a great extent. Pestle analysis is mentioned below in relation to the
Sasol:

Political factors: It is the first factor of the analysis that can be defined as to which
extent government influence in the working of the activities. It includes taxation policies, rules,
regulations etc. In relation to the Sasol, they are operating from the South Africa and there is so
much political stability. It provide them opportunities to carry out the business activities
smoothly.
Economic factors: These factors can be expressed in the monetary terms. It includes
several components with it such as profit rates, wage rates, inflations etc. In relation to the Sasol,
they are operating from the different parts of the country and through which they are increasing
the employment opportunities in the country. They are ultimately increasing the GDP of the
country.
Social factors: These factors can be defined as fulfilling the needs and wants of the
society. In regards to the Sasol, management of the company always analyses the needs of the
customers and accordingly they offer food products to the customers (Haddud, McAllen and
DeSouza, 2018). It will facilitate the managers of the company to increase the level of profits in
the market.
Technological factors: This factors includes all the automation that the
organisation can adopt in order to make the process of production more productive. In
regards to the Sasol, they can implement the effectiveness technology in order to offer
innovative food products in the global market. Through this they will become able to attract
large number of customers towards their business.
Legal factors: These are the factors that includes all the laws and legislations that
has been made by the government of the specific place. In relation to Sasol, they always
rely on the laws that has been made by the government of the South Africa. It will facilitate
them to carry out the operations in a effective manner.
Environmental factors: These factors means that the organisation should consider
the environment factors while carrying out the activities in the marketplace. In relation to
the Sasol they ensures that they take care of the environment.
Complexities of strategic challenges that are faced by business while operating in global
environment
Globalisation facilitate the organisation to performing better functions at the
international level and also helps the managers of the company to make effective policies.

Along with that organisation have to face so many challenges when they carry out the work
in the international market. There are various kinds of the challenges that are faced by the
Sasol are mentioned below:
Entry Fees: If the organisation plans to enter into the international boundary they
have to pay entry fees. In relation to the Sasol, they are planning to enter into the
international market so for that they can choose franchising method. But for that too they
have to pay the entry fees which can be a challenges for the company.
Decreasing cultural identity: It is very challenging and difficult for the new
organisation to effectively analyse the culture of the new place. In relation to the Sasol,
they have to identify the new opportunities that they can grab in the international market.
Through this they can achieve more successful in the global market.
TASK 2
Evaluation of how global influences organisational leadership, functions, governance,
culture and structure
In order to analyse the design of the organisation McKinsey model can be undertaken into
the account. The main aim of this model is to identify the effectiveness of the organisation
they achieve by implementation of the 7 parts of the model. These are mentioned below:
 Structure: It if the first part of the model that means organisation structure should be
organised in a effective manner. In relation to the Sasol they should focus on to create
healthy work environment in which employees can smoothly connect with each other.
Divisional organisational structure can be adopted by the company in order to divide the
work.
 Strategy: In relation to the Sasol company, it becomes very important for the managers
of the Sasol to formulate effective strategies through which they can achieve the goals the
targets. It can only be achieved at the workplace when organisation will implement foster
working environment.
 Skill: It can be stated that there are various kinds of skills present in the individual which
helps them to become more productive and shows potential in carrying out the activities.
In relation to the Sasol, they should effectively give training to the employees so that they
can become more effective and efficient in carrying out the activities.

 System: This part of the model can be referred to as the technologies and the
infrastructure of the company that helps them to bring more productivity at the
workplace. In regards to the Sasol, they are planning to implement new techniques of
production through which they can offer innovative food products into the international
marketplace. It will helps them to accomplish the goal of the organisation.
 Staff: This part of the model is related to hiring of the employees at the workplace. It
includes selection, recruiting, training and development of the employees. In relation to
the Sasol, they should hire potential employees at the workplace which can help them to
bring more productivity in the goods and the services.
 Style: This part of the model mainly concerns with the code of conduct that is to be
followed by the organisation in order to maintain good working conditions. It becomes
very important for the managers of the Sasol to establish effective code of conduct
through which they can carry out the operations in a smooth manner.
 Shared values: It is the last and main part of the model that focus on the goals and the
objectives of the organisation. This helps the organisation working to carry out their
operations in a systematic manner.
Another model which is used by Sasol in order to understand the factors which influence
culture, organisational functions and structure of an organisation is Hofstede’s Dimensions of
Culture. This model can be understand as follows:
Power distance index: The higher power of this framework accepts the culture of
inequity, encourages bureaucracy and shows respect to rank (Suriyankietkaew, 2019). On the
other hand lower distance index prefer flat organisational structure which results more beneficial
for Sasol. It allows all the employees to participate in decision making and planning.
Individualism vs. Collectivism: This suggest the degree of interest towards organisation.
Individualism describes that all the employees of an organisation focus on their personal goals
and targets. The collectivism factors involves employees who majorly focus on the collective and
group goals rather than self achievements.
Uncertainty Avoidance Index: This dimension focus on risk taking index of an
organisation according to their business environment. High uncertainty shows low tolerance of
risk taking and ambiguity. Sasol have low uncertainty avoidance index which suggest that they
can tolerate higher risk taking and uncertainty.

Masculinity vs. Femininity: This dimension can also be referred as tough vs tender.
Masculinity includes characteristics such as wealth building, focus on material achievements and
distinct gender roles. On the other hand femininity involves characteristics such as modest, fluid
gender role and majorly focus on quality of life which is undertaken by Sasol.
Long-Term Orientation vs. Short-Term Orientation: Operations of an organisation
which focus on long tern success and growth comes under long term orientation. It should be
focused by Sasol so that they can sustain for longer time. Short tern orientation mainly focus on
upcoming short gratifications.
Indulgence vs. Restraint: The dimension of indulgence allow employees of Sasol in
living their life to the fullest (Hu and Kee, 2022). The other dimension restraint suppresses the
desires and needs of employees. It suggest that individual have to live life according to the strict
social norms which may affect their performance and productivity.
Evaluate influences of sustainable and ethical globalisation on organisation functions
In relation to the Globalisation, concept of the ethical factors can be referred to as
the all the activities of the business that should be carried out in a ethical way. Word ethics
can be referred to as what is right and what is wrong. It becomes very important for the
organisation to carry out the activities of the business in a ethical manner so that they can
promote the sustainability in the global market. It is very important for the managers of the
company to bring sustainability in the working so that they can become able to achieve the
targets at the global level. These kinds of factors facilitate the organisation to make the
process of the production more effective.
Critically evaluate the influences of globalisation in application to suitable models and
theories linking to organisational culture and structure.
It can be seen that there are various kinds of challenges that is faced by the
organisation when they carry out the activities in the international level. In relation to the
Sasol they also have to faces so many challenges in order to carry out their business
activities in the global market. Some of the challenges are mentioned below:
 Political change: It majorly affects the level of profitability in the international market.
Due to the harsh policies of the government in the new marketplace directly affects the
working of the organisation.

 Technological development: Due to constant upgradation and alteration in the
technologies business have to underwent lot of changes. Sasol have to invest large capital
amount in order to implement and install technological changes which disturbs their
budget.
How the strategy and decision-making of this
multinational organisation are influenced and shaped by the global market forces
The decision making and strategies of multinational business are influenced to great
extent as they have to change their leadership styles. Leaders of Sasol have to focus on their
influencing behaviour so that they can improve the performance of their employees. It effectively
reduces challenges and difficulties of international trade (Nam and Bao Tram, 2021). The global
mark,et forces become more positive as it enables in understanding the needs and wants of
customers as well as of employees. Sasol can achieve various competitive advantages by
involving beneficial strategies that can support global market operations. They add value to the
GDP of country by increasing the rate of economy with the help of smooth operations.
Identify the key barriers for entering and operating in international markets, and articulate
various ways decision making can work effectively in a global context.
Businesses have to face various challenges during entering to the international market. It
is important to take decisions according to the requirements (Nantembelel and Gopal, 2018).
Sasol have also analysed some of the barriers of entering the international market which is
mentioned below:
Capital requirements: It is highly important to maintain the appropriate budget for an
organisation in order to operate in international market. Sasol have to invest in infrastructure,
advertising and research & development so that they can effectively acquire the large market
place in new boundaries.
Switching cost: This suggest that organisations have to switch different suppliers for
sourcing raw material and equipment in other countries (Popescu, 2022). It becomes challenging
for Sasol to search for potential suppliers who can carry out business in cost effective manner.
Developing relationships with new suppliers is challenge for organisations as it involves time
and efforts.

Organisations should focus on gathering relevant information and data which can further
help them in developing strategic decisions. It becomes beneficial for Sasol to involve in critical
research and development of international business environment so that they can understand the
different threats and opportunities. All the relevant evidences should be considered by an
organisation so that they can carry out decisions which are beneficial for the growth of an
organisation.
Suggest various strategic
routes to internationalisation which Sasol can use to expand in different geographical
boundaries.
Organisations have to opt best suitable entry modes for expanding their operations in
international market. Sasol should select routes according to the needs of their business
environment so that they can gain advantages. Some of the routes to international market are
mentioned below:
Exporting: This is the most common and easiest way to enter the international market
without involving huge investment and capital. Organisations can manufacture their products and
goods in their home country and further deliver them in selected international boundary with the
help of exporting (Nudurupati, Garengo and Bititci, 2021). Sasol can eliminate unnecessary risk
and cost which is the positive factor of this entry mode. All the essential factors should be taken
into consideration during exporting the products such as appropriate packaging, labelling and
pricing. It assist organisation in establishing effective brand image in the foreign market.
Joint venture: It suggest that two or more partners or entities can collectively agree on
an agreement in order to commence their operations. Sasol can involve themselves in joint
venture with the foreign organisation so that they can establish their existence in international
market. It eliminate the cost of infrastructure and other resources as all the partners share and
contribute investment according to the agreement. Company enjoys sharing of profits and losses
which reduces burden and pressure from an individual.
Franchising: According to this organisation gives permission to other entities located in
international boundaries to commence operations under their name. Franchisor and franchisee
work on the basis on prior guidelines so that they can maintain proper uniformity (Anwar,
Chaudhary, Malik and Bassim, 2021). Sasol can target large market area in new boundaries with

the help of franchising which is positive factor for them. This is the suitable opportunity for
Sasol as it does not involve cost of infrastructure.
Provide recommendations how organisation should adopt their decision making processes and
organisational structure so that they can respond international opportunities and challenges.
 Organisation should clarify and simplify the steps and actions which they have to take for
grabbing opportunities from Foreign market (Yaklai, Suwunnamek and Srinuan, 2018).
Sasol have to focus on the accuracy of decisions so that they can commence operations
without any difficulties and challenges.
 It should be noted that organisations have to focus on their business culture and
environment which are responsible for better growth. Sasol should promote team work
which increase coordination among them so that they can accomplish targets.

CONCLUSION
From the above report it can be concluded that global business environment include
different countries which influence and affect the decision making and planning of a particular
company. It is essential to analyse and evaluate all the global environment factors as they can
lead to negative outcomes and results. Businesses should focus on the opportunities which are
present in global environment so that they can grow and develop their business in effective
manner. All the economic, political, environmental and legal factors should be considered while
operating business as it may results in challenges. This report included about the global business
environment in which selected organisation is commencing their operations. Different
frameworks are used in order to analyse the affecting external factors of an organisation.
Opportunities and challenges which are faced by organisation due to complexity of strategic
operation in new boundaries are mentioned in this report. Key barriers to enter the international
market are discussed along with the appropriate entry modes. Justification and recommendations
are mentioned so that organisation can respond to challenges and opportunities in international
market.

REFERENCES
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