Unit 18 - Global Business Environment: Key Factors, Strategic Challenges, and Impact of Globalisation on Organisational Governance, Leadership, Culture, Structure and Functions

Unit 18 – Global Business
Environment

Table of Contents
Introduction......................................................................................................................................1
MAIN BODY...................................................................................................................................1
Part-1................................................................................................................................................1
Analysing the Key factors that drives the global business trade and commerce.........................1
Critically evaluating the influence of key factors on the global business environment..............2
Examining the complexities of strategic challenges faced by the company when operating in
the international business environment........................................................................................3
Part-2:...............................................................................................................................................5
Evaluating the impact of globalisation on organisational governance along with leadership,
culture, structure and functions....................................................................................................5
Evaluating the impact of ethical as well as sustainable globalisation on functions of company.7
Evaluating the various methods in which decision-making can work effectively in global
context..........................................................................................................................................8
Evaluating the different routes to internationalisation that the firm can adopt including key
barriers.........................................................................................................................................9
References......................................................................................................................................12

Introduction
The global business environment can be referred as international business activities
which allows the organisation to explore into external market conditions after taking into
consideration many factors like resources, skills and knowledge. The globalisation of the
business helps the company to take advantage of newer technology, infrastructure development,
providing many jobs, providing better services as well as investing more capital. For this report,
the SASOL limited firm is taken into consideration. The company is the south African based
company and is considered the fastest growing energy and chemical organisation. This report
will critically analyse the impact of key drivers of cost, market, environment and competition on
the global trade and business. In addition to this, the report will also evaluate the complexities
related to strategic challenges which the company can face when initiating operations in global
environment. This report will also highlight the impact of globalisation on the governance and
leadership, structure, culture as well as on different functions of the company. Moreover, it will
also assess the impact of ethical as well as sustainable globalisation on the functions of the firm.
Furthermore, this report will also analyse the influence of global factors on decision making and
strategy(Hamilton and Webster, 2018).
MAIN BODY
Part-1
Analysing the Key factors that drives the global business trade and commerce
The globalisation is termed as process in which ideas, knowledge, skills and goods and
services are transferred from one country to the another. The globalisation promotes the free
flow of goods, labour and capital in order to maximise the return and sales. The globalisation
process allows the organisation to increase its sale and ensures higher growth in customer market
share. This process helps the companies to take advantage of new technologies and skilled labour
of unexplored markets(Dzwigol, Dzwigol-Barosz and Kwilinski, 2020).
The below mentioned points represent the key drivers of the globalisation in context to
SASOL company are:
Cost:
The cost is one of the major factor that motivates the company to invest on international
market for gaining customers present in new market conditions. The globalisation activities can
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allow the SASOL company in taking the advantage of economies of scale which will be the by-
product of initiating in large scale operations. This will support the firm in making necessary
reductions in its cost structure that will directly lead into high attraction of customers in most
effective manner.
Market:
This is the another factor which makes the firm ready to initiate market developmental
activities. In context to SASOL, the company can take advantage of established market present
in international country by selling products in the low cost manner. The company can take the
advantage of high purchasing power of customers as well as well developed infrastructure of
foreign market(Contractor and et.al., 2020). This can help in using newer technologies for
optimising its business processes.
Environment:
The major revolutions in the technology, increase in customer wealth, easy transfer of
ideas across border etc. are considered as critical factor that influence the company in entering
into new market conditions. In context to SASOL firm, the development in communication
technologies has supported the firm to internationalise its operations. This will allow it to easily
schedule international meetings by taking use of collaborative tools.
Competition:
The rise in competition level can also be considered as major reason for the company to
tap into the unexplored market conditions. In context to SASOL company, the high competition
in South African market has enabled the company to take advantage of international operations
as it helps the firm to intensify the marketing activities leading to more customer share.
Critically evaluating the influence of key factors on the global business environment
The key factor such as cost, market, environment and competition can influence the
global business environment in both positive and negative manner(Contractor and et.al., 2019).
In context to SASOL organisation, the cost factor can support the company to initiate activities
of international operations as it will allow the firm in reducing its cost structure by taking
advantage of large scale operations. This will directly help the SASOL organisation in drawing
attention of large number of customers present in international market. However, the difference
in tax systems can negatively impact market position of company if the tax system of
international country is more complex and high. In addition to this, the positive response from
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