Influences of Globalisation on Organisational Governance and Leadership - SASOL Ltd

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This report evaluates the impact of globalisation on organisational governance and leadership, structure, culture and functions of SASOL Ltd. It discusses the ethical and sustainable factors that the organisation has to consider in a global market and critically evaluates strategic decision making in relation to risk and diversification in a global context.
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Global Business
Environment
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Table of Contents
PART 1............................................................................................................................................4
Part 2..............................................................................................................................................15
INTRODUCTION.........................................................................................................................15
TASK.............................................................................................................................................16
Evaluation of influences of globalisation on organisational governance and leadership,
Structure, culture and functions: -........................................................................................16
An evaluation of how the above has been influenced by global operations and how the
organisation has adapted to operating in a global market....................................................18
Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has been
influenced.............................................................................................................................18
An evaluation of ethical and sustainable factors that the organisation has to consider in a
global market. ......................................................................................................................19
Critical evaluation of strategic decision making in relation to risk and diversification in a
global context.......................................................................................................................21
An assessment and critical evaluation of the range of strategic global expansion routes
available to the organisation.................................................................................................22
CONCLUSION..............................................................................................................................23
REFERENCES..............................................................................................................................24
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PART 1
Slide 1: -
Slide 2: -
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Slide 3: -
Speaker notes: -
The following report is based on the SASOL Ltd which is a fastest growing organisation who
deals in chemical and energy. The head office of the respective company is situated in the Cape
Town, South Africa and the company provide their services New York, Gabon, Mozambique,
Australia, and Frankfurt. The following report is going to discuss about the various factors like
market, cost, competition and environment which drive the global trade and the external
environment analysis if the company by using PESTLE analysis. This report also discussed
about the impact of digital technologies on the globalisation and what challenges can be faced by
the company in expanding into the other market because of the globalisation along with the
recommendations to overcome form such challenges.
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Slide 4: -
Speaker notes: -
Cost: - this factors includes all the expenditure which are done by the company from nation to
nation and assist in paying focus on acquiring all the opportunities at the international level.
Along with this, different types of advantages are provide by this drive at the international level
which assist the company in its development and the increase the economies of scale(Băeşu and
Bejinaru, 2020). In relation to the SASOL Ltd, with the help of this factor higher profitability
can be enjoy by the company management by having cost advantage. It is very important for the
company manager to paid high focus on the various activities of the company so that they can
easily find out the customers as well as the resources in the country in which they are operate, at
a very low cost.
Market: - this is being considered as the most important drive on which company management
have to paid focus. Different types of opportunities has provided by this drive to the
organisation who operate their functions in the local market as this assist them in expanding their
functions at the international level. In relation to the SASOL Ltd, huge amount of market area is
grab by the manager of the respective company which assist the them in increasing their
profitability as well as sales. This result in that the sustainability of the firm in the international
market has been enhanced. So it is very crucial for the company manager to paid huge emphasis
on the new market area and the needs and wants of consumer (Belas and et. al., 2019). By doing
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this, they can effectively meet the customers needs and achieve the higher profit and
sustainability for their company at the global level.
Competition: - the competition has been increases in the global market due to the development
of globalisation, the companies are not be able to operate in the international market it's become
very tough for them. Immense competition because of the globalisation directly affect the
different functions of the company in a very negative manner. In relation to the SASOL Ltd, the
company provide their services in different parts of the nation and because of this, huge amount
of competition has been faced by them in the international market.
Environment: - this is basically that drive in which various types of functions as well as
activities has been perform by the company management in order to attain all the goals and
objective of firm. This drive comprises of political, legal, social and technological elements
which directly impact on the globalisation. In relation to the SASOL Ltd, it is very crucial for the
company manager to paid full focus on the development of the policies and strategies for the
firm (Berman and Dalzell-Payne, 2018). Due to these strategies, long sustainable position can be
attain by the company in the international market. This drive assist the respective company
management in operating their functions at the global level in proper way and also help in large
base of loyal consumers towards the company.
Slide 5: -
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Speaker notes: -
The proper conduct of this tool assist the company in expanding the business effectively. In
relation to the SASOL, this analysis has been mentioned below: -
Political factor: - this factor has direct impact on the functions of the company. Tax rates,
political interference, rules and regulation which are made by the government of the country and
many more are included in this element. In relation to the SASOL LTD, as the political stability
of the UK government is very high and along with this less tax are imposed by the government
on the organisation which act positively for them at the international level (Bull and Miklian,
2019). So it is very crucial for the company manager to paid full attention on the policies which
are made by the government, in order to operate smoothly and attain the sustainability.
Economic Factor: - this include wages, employment rate, unemployment rate, GDP of the
nation and many more. In relation to the SASOL Ltd, it is very important for the company
manager to paid focus on the economic background of the nation. As the respective company
operate their functions in the different parts of the world so it is very important for the
management to check the economic condition of the country. This not only assist the company in
improving their image as well visibility but also help them in increasing their profitability at the
global level.
Social Factor:- this includes the change in the trends, preferences, values, beliefs, desire and
many more of the consumer along with the religion and social issue. In relation to the SASOL
Ltd, it is very important for the manager of the chosen company to paid effectively attention on
the requirements of the consumer (Cheng and Wang, 2018). By doing this they can effectively
provide the quality goods which can be easily acceptable by the consumer. This result in
attaining the high market area and successful position of the business.
Technological factor: -this factor is being considered as the most important factor of this
framework. As this not only bring various opportunities for the company but also help them in
doing innovation in their gods and services. In context to the SASOL Ltd, it is very important for
the manager of the company to invest more time and money on adopting the advanced
technology(Damarwulan and Farida, 2018). With the help of advanced technology they can
effectively do the operational functions with minimum wastage. This result in that the
profitability as well as the speed of manufacturing the gods has been enhanced.
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Legal factor: - in this element the laws related to the welfare of the society as well as the
employees are included. These laws are basically made by the council of the nation and it is
very important for all the organisation to follow these rules. In relation to the SASOL Ltd, then
company managers have to paid full emphasis on the laws such as women empowerment, equity
law and many more. Along with this, the company management also have to full take care of the
well beingness and safety of the employees. If all the laws are follows by the firms in proper
manner then they don't bear any consequences and run the business perfectly at the global level.
Environmental factor: - this factor comprises of those rules and regulation which protect the
climate or the environment of the nation. Environmental protection act, pollution act and many
more are included in this. In relation to the SASOL, it is very important for the manager of the
company to paid full focus on the rules which are developed for the safety of the natural
resources. If this is done by them in proper manner then this assist the company in developing a
good image in front of the consumer and don't harm the society pollution.
Slide 6: -
Speaker notes: -
This result in that they can do their business functions effectively at the international level.
Along with this, this also assist them in attaining high profitability as well as long term
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sustainability at the global level. Through the involvement of the digital technology within the
organisation, professional bonding with the employees of the company has increased and
employees are able to understand the dynamic environment. In addition to this, the development
of the digital technology not only also assist the organisation in enhancing their economies of
scale but also help them in enhancing their market size(Doshi, Kelley and Simmons, 2019). Due
to the indulgence of the digital technology within the organisation, trade is done according to the
nature easily and on time.
By proper utilization of digital technology within the organisation the management of the
SASOL Ltd, would be able to perform all its task in a proper manner and the supply chain of the
company also perform effectively with the help of various programming tools and software. This
would the assist the respective company in having its innovation in the workplace and performs
all the task with high efficiency at the global level.
Slide 7: -
Speaker notes: -
Organisations are able to attain the long term sustainability along with the high profitability in
the international market because of the existence of globalisation (Dzwigol, Dzwigol-Barosz and
Kwilinski, 2020). They are able to make effective policies and strategies in order to expand their
business in the global market.
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Slide 8: -
Speaker notes: -
As the international market is a very big platform where different types of organisation came
together and do the trade. Due to this, there is high chance for the company that they face
complexities in its operations within the market. In context to the SASOL Ltd, different types of
challenges can be faced by the respective company while operating in the global market from
which some of them discussed below: -
Loss of cultural identity: -this is being considered as the most common as well as the most
important issue which are faced by the organisation when they operate their business functions at
the global level (Hamilton and Webster, 2018). In context to the SASOL, its become difficult for
the company to understand as well as the adopt the culture of the new nation. But, it is very
important for the firm to identify the culture of the nation, this not only help them in performing
their different functions effectively but also help in but also help them in attaining the success.
Entry fees: -It is very important for the management of the SASOL Ltd to paid focus on the
conduct of the businesses by exchanging the different forms of exports fees and collaboration
through the franchising with various local as well as international businesses. Therefore,
SASOL, can be paid focus on international expansion by opening new outlets with the objective
of earning more and more profits. In this, there is a chance that in the form of entry fees SASOL
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can pay a sum of money to the nation in which they are expanding their business. This not only
impact on the profit margin of the firm but also impact on its operational cost.
Slide 9: -
Speaker notes: -
The SASOL Ltd, have to recruit trained and skilled IT professionals so that all the
functions of the company can be perform effectively by using digital technology.
It also recommended to the SASOL is that, they have to provide high quality of products
to their customers by paying focus on the production activities. This not only assist in
increasing the sales but also help in enhancing the turnover ratio in a short period of time.
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Slide 10: -
Speaker notes: -
This report also concluded that, the company management have to paid focus on the different
factors that drive the global trade which assist the company in conducting their business
functions in a very effective manner. Along with this, this report also concluded the external
environment analysis with the help of PESTLE which would assist in expanding the business
globally and the challenges which affect the smooth flow of business internationally.
Slide 11: -
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Speaker notes: -
Bull, B. and Miklian, J., 2019. Towards global business engagement with development goals?
Multilateral institutions and the SDGs in a changing global capitalism. Business and
Politics, 21(4), pp.445-463.
Cheng, L.T. and Wang, J.W., 2018. Enhancing learning performance through classroom
response systems: The effect of knowledge in a global economic environment. Journal of
Teaching in International Business, 29(1), pp.49-61.
Damarwulan, L.M. and Farida, N., 2018. The Role of Quality of Entrepreneurial Networking and
Responsiveness to Global Business Environment in improving the Marketing Performance of
Indonesian Exporting SMEs. Quality-Access to Success, 19(165).
Doshi, R., Kelley, J.G. and Simmons, B.A., 2019. The power of ranking: The ease of doing
business indicator and global regulatory behavior. International Organization, 73(3), pp.611-
643.
Dzwigol, H., Dzwigol-Barosz, M. and Kwilinski, A., 2020. Formation of global competitive
enterprise environment based on industry 4.0 concept. International Journal of
Entrepreneurship, 24(1), pp.1-5.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
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Slide 12: -
Part 2
INTRODUCTION
Global business environment may be defined as the environment of the different nations
which comprises of different external factor which has a huge impact on the performance as well
as sustainability on the company. These factors are not in the control of the company
management therefore they always have to be ready accept the environment. The following
report is going to discussed about the structure, culture and governance within an organization
and how these are influenced by the global operations(Hampden-Turner, Trompenaars and
Hampden-Turner, 2020). This report also paid focus on the culture of the company and the
various types of ethical and sustainable factors on which organisation have to paid focus. In the
end, evaluation has been done on the strategic decision making in relation to risk and
diversification in the international market and the strategic global expansion routes available in
front of the organisation to expand the business.
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TASK
Evaluation of influences of globalisation on organisational governance and leadership,
Structure, culture and functions: -
It is very essential for the management of the organisation to paid extreme focus on the
concept globalisation for the expansion of the business because this not only bring changes in
the existing product of the company but also bring changes in strategies. The respective company
have the power to increase its market share by meeting the needs in the dynamic business
environment. In context to the SASOL company the McKinsey's 7S model which influence the
structure, culture, operation and leadership under globalisation has been discussed below: -
Structure: this referred to the culture of the organisation which are followed by the
manpower of the company during the different business activities. In relation to the
SASOL, divisional organisational structure is followed by the management of the
company in which the roles and responsibilities of the employees are divided according
to the functioning and the requirement of the foreign nations(Islam and et. al., 2020).
This assist in improving the performing the performance of the company.
Strategy (Governance):this factor is referred to the plan which are designed by the
company management after determining its position. This give assistance to the SASOL
Ltd, in enjoying the competitive advantage over their rivals in the dynamic environment.
Competitive pricing strategies is adopted by the company management for attracting
large base of customers with high quality products(Kasemsap, 2020). Proper training
sessions has been taken by the company employees in order to increase their knowledge
in relation to the technology used in introducing chemical products. With the help of
strategies firm effectively manage its working and attain the positive result.
System: this factor basically comprises of patter or sequence within which different
operations of the organisation are organised and assist the company in developing proper
workflow. In relation to the SASOL, plans are designed by the company management for
the expansion of the business at the international level that give assistance in increasing
the sales. The company management has to develop appropriate system which give
assistance to the company in solving the internal issues and effective business operations.
There are different department of the organisation such as marketing, finance, sales and
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human resource. Effective system assist in monitoring the performance of these
department which result in attaining the goals of the company.
Shared values: this factor comprises of the core values of the organisation i.e., vision,
mission and objectives which give assistance in improving the whole performance of
business. In context to the SASOL, focus has been paid by the company management on
the enthusiasm and positive behaviour which motivates the employees to produce the
effective results (Khofiyah, Sutopo and Ardiansyah 2020). These core values are
effectively communicates to the employees which give assistance to the structure of the
organisation that motivates the employees to commit towards the company goals and
objectives. There are different types of values such as accountability, honesty, trust and
creativity and it is very important for the company management to make sure that all
these values are appropriately linked with the work and the company culture.
Style: this factor is related to the leadership style adopt the company leaders in order to
motivates the company employees. In relation to the SASOL, the leaders of the company
followed the democratic leadership style. With the help of this style better and sound
decisions are made by involving the company employees in the decision making process.
This motivates the workers to work hard and attain the organisational goals in a very
effectual and efficient way.
Skill: Knowledge, abilities and capabilities which are required to attain the goals of the
company within the company employees are comprises in this element. In relation to the
SASOL Ltd, different types of skills are posses by the workforce such as problem-
solving, team-working, communication etc. which assist in conducting the different
operations of the firm effectively(Kozubikova and et. al., 2019). Along with this effective
training is also given by the company management in to their employees which helps in
increase the capabilities of the workers in order expand the business globally.
Staff: this factor comprises of number of employees working within the organisation in
order to carry out the various activities of the company in proper manner and attain the
objectives of company effectively. In relation to the SASOL, the company have skilled as
well as trained employees that work with higher productivity and attain all the set goals.
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An evaluation of how the above has been influenced by global operations and how the
organisation has adapted to operating in a global market.
From the above discussion it has been evaluated that it is very important for the
administration of the SASOL limited to determined the global business environment where there
is a need for introduction of the new product. McKinsey's 7S model and Hofstede culture has
been been followed by the company management in order to manage the activities at the other
location. There are different types of elements which has a impact on the globalisation which
assist the company to grow has been discusses below: -
Political changes:- the trend of globalisation within the international market assist the
company management in uniting and socializing the types of societies in order to trade in
effective manner. This develop different types of opportunities for the SASOL limited.
Development of technology:- this element is related to the advancement of technology
within the organisation(Laszlo, Cooperrider and Fry, 2020). This assist in smooth flow of
thoughts as well as ideas with in the company along with the effective interaction in the
firm.
Expenses:- this factor is totally related to the effective trading within the organisation
along with the effective flow of capital in the divisions like habits and behaviour of the
international clients, requirement of the economies of expansion(Lopes and et. al., 2018).
International business climate:- It is linked to the scaling channel of the communication
that makes the major contribution in the procedure of the internationalisation. In context
to the SASOL, this element also support the company with several kinds of the tools in
the process of internationalisation.
Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has been
influenced.
In order to modify the existing performance of the business and bring changes within the
organisation the higher executives of the SASOL also adopt the Hofstede's cultural dimensions
model. In context to respective company this model has been discussed below:-
Individualism Vs Collectivism: this refer to the degree at which communities are linked
with the teams and there are different types of sensed responsibilities and working with
the several groups. In relation to the SASOL Ltd, focus has been paid on the collectivism
in which emphasizes has been paid by the workers in completing the work in appropriate
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way(Möller, Nenonen and Storbacka, 2020). As the individual paid emphasizes on
attaining the goals individually. The concentration on the collectivism allows the
company employees to take participation in the business operation and adopt the other
country culture.
Uncertainty avoidance index:this is related which extent the ambiguity and uncertainty
is endured. This shows that how unwanted activities are effectively managed to attain the
goals. In relation to the SASOL Ltd, this can be used by the organisation in order to
conduct the various in another country. The low level index of the manpower represents
the higher tolerance and uncertainty acceptance
Masculinity Vs Femininity: this dimension of the framework is totally related to the
needs and wants of the community for accomplishment, equality, attitude and behaviour.
Masculinity is referred as the possibilities such as deficiencies and fierceness and the
femininity is related to the nurturing, fluid roles that are based on the gender and quality
of life(Nelson, 2018). This can be used by the company management in enhancing the
company performance by removing the biasses and discrimination within the company.
Pragmatic Vs Normative: in relation to the SASOL, the company management can use
the normative strategy in order to give rights of employment to the talented workforce to
improve the company performance.
Restraint Vs Indulgence: indulgence can be adopt by the company which give freedom
in operating the business activities effectively.
Power distance Index: for removing the inequalities and managing alterations this can
be adopt by the SASOL Limited which gives assistance to empower group members in
order to improve the company performance.
An evaluation of ethical and sustainable factors that the organisation has to consider in a
global market.
Ethical globalisation is basically an area which comprises of various application of ethics,
transformation, combination and interaction which are used by the firm in order to run the
functions. Focus has been paid by the SASOL limited on the working standards, employment
rights and most importantly on positive behaviour of workforce which assist in running the
business globally.
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Sustainable globalisation represents the managing the business by the employees at the
international level. In order to expand the business activities it is very important for the company
management to paid emphasizes on the sustainability (Onyshchenko, Maslii and Ivaniuk, 2020) .
Variates of chemicals are offered by the SASOL limited in the changing environment in order to
influence the market base. Plans are made by the organisation to enter into the global market by
sustainable globalisation. The effect of sustainable and ethical globalisation on different types of
business functions has been discussed below: -
Finance: the SASOL limited is requires to allocate the capital form the different sources
in order to enter into the market. It is very important for the firm to manage its funds in
effective way for the expansion. If this is not done properly a challenging situation may
arises for them.
Marketing: it is very important for the company management to target the large market
area which improves its performance at the global level. Different types of marketing
tools like social media, digital marketing etc. can be utilized by the SASOL, in order to
promotes its chemical products. This assist in attracting large base of customers which
are influences by the globalization. .
Focus on HRM- the HRM is considered as the major part of the organisational body
which assist in managing the employees of the company. Training and development
programme are developed by the this department in order to develop the teach ethical
behaviour in employees.
This also comprises of consumers, government, workers, society, suppliers and many
more. The main objective of doing the business in the ethical manner is to improve the workers
performance. This not only assist the firm in doing the business in effective manner but also
helps in enhancing the sustainability in the international market for long time(Rezaee, 2018).
Linked with sustainability means that there are different variable which give assistance to the
firm in improving its existence in the global market and enjoy the competitive advantage over
their rivals. As the sustainability of the firm is totally depend on the profits, if the the income is
higher then the management can easily survive in the global market. In addition to this also
promote the growth of the firm and make them competitive at the international stage. In relation
to the SASOL, scale of economics, marketing of the goods and human resource are the elements
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which make huge impact on the company productivity. If the skilled as well as extremely
knowledgeable person contributes in the development of the policies then this assist the firm in
increasing its customers base as well as the goodwill at the global level which result in more
profits.
Critical evaluation of strategic decision making in relation to risk and diversification in a
global context.
It is very essential for the company management to develop the the effective decision
while operating their functions in the market. This assist the employees to attain all the activities
without facing any difficulty(Sharma and et. al., 2020). This also give assistance to the company
management in conducting the effective environment analysis in the global market which helps
the company in determining the impact of the external elements on the performance of the
company. Important role is played by the performance in the growth of the firm because it
improves the sustainability.
Visionary: this referred to the long terms goals and objectives of the firm which are
developed after analysing the elements of environment. It is essential for the firm to
develop the clear as well as effective goals unclear goals leads to develop problems. In
relation to the SASOL, the company management has to build the effective vision which
assist the firm in various aspects. As the all the employees give hundred percent
contribution which assist the firm to attain the set goals.
Guardian: this give assistance to the company management in developing the effectual
decision for the firm. Data collection, information and strategies are some of the
functions which are performed by the guardian in order to build the decision in relation to
the business(Sołoducho-Pelc and Sulich, 2020).
Sources of fund: this is being considered as the most important element for the firm is
they want to expand their business at the global level. It is very crucial for the firm to
develop the various sources of funds so that the goal of expanding the business can be
attain.
If the organisation wants to increase its economies of scale at the international level then
it is very for them to become competitive in the different areas like effective distribution system,
effective utilisation of resources along with the technologies and many more. In relation to the
SASOL, several decision have to be taken by the company management in order to work at the
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global level which are related to the cultural features, time zones comprises of several strategies
and policies and also norms of the international markets. The methods of taking the decision has
been discussed below: -
Proactive decision-making: this is being considered as the most suitable techniques
which assist the company in generating the various solutions that would be helpful in the
current world.
Reactive decision-making: this is basically the stage that step up the firm in making
more and more inactive decision. This is being considered as the ineffectual decisions of
the recent times but also be affective in the few situations(Vătămănescu and et. al., 2020).
From the above ways of decision making, it has been analyse that firm is active at that time
rather then passive in their market because this requires the different types of inductions as per
the activities rather then react on this, then this result in that the company is taking the decision
proactively. Along with this, essential elements are required in order to operate the functions in
the global market which is very important to understand. This not only leads to the growth of the
company but also improves the company sustainability in the market.
An assessment and critical evaluation of the range of strategic global expansion routes
available to the organisation.
There are different types of expansion routes which can be used by the SASOL Limited
in order to expand their business at the international level. Some of the expansion methods has
been discussed below: -
Licensing: in this route of expansion the management of the company make an
agreement or give licence to the other organisation. This give rights to the licensee to
operate the functions under the parent company name. In context to the SASOL Ltd, this
can be used by the company in order to expand because this require less capital
investment(Zakaria, Abdul-Talib and Amelinckx, 2020). In this licensing managing the
marketing and the production expenses in the international market. The respective firm
received the royalty form the subsidiary firm which develops various opportunities for
the firm in order to expand the businesses in the international market by minimizing the
risk.
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Exporting:this is basically that type of exporting route in which the producer of the firm
expert the goods in the overseas market. This is being considered as the most common
technique which are used by the organization in order to expand the business. With the
help of this company cane sale their products directly without investing capital in
manufacturing in other country(Zámborský, 2020). In relation to the SASOL, if this
strategy is adopt by the company then they have to manufacture the goods in home
countries and then sent it to the other country which increases the transportation cost due
to which the of goods has been increased.
CONCLUSION
From the above report it has been concluded that it is very important for the firm to
determined the impact of global business environment on the different functions of the company.
This report concluded that the development of globalisation has a huge impact on the
performance of the company. This impact on the leadership, structure, function and culture of
the company which is being concluded in this report. Along with this, this report also concluded
the impact of sustainable and ethical globalisation on the firm functions and the impact of
globalisation on the decision-making process of the firm. In the end this report concluded the
various routes for the firm to go globally.
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REFERENCES
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