Unit 18 - Global Business Environment: PESTLE Analysis, Key Drivers of Globalization, and Challenges Faced by SASOL

This presentation discusses the global business environment and its impact on organizations such as SASOL. It includes a PESTLE analysis, an analysis of key drivers of globalization, and a critical evaluation of the challenges and complexities globalization brings to an organization. The presentation also provides recommendations to overcome these challenges.

Table of Content
• Introduction
• Pestle analysis to illustrate the broader and global influences on an organization such as
SASOL
• Analysis of the Key factors that drive globalization
• Analysis of key drivers of globalization
• Evaluation of impacts of digital technology on globalization
• Critical evaluation of the challenges and complexities globalization brings to an
organization such as SASOL
• Recommendations to overcome the challenges
• Conclusion
• References

Introduction
Global business environment can be explained as a market that is
formed due to the linkage and interconnectivity of different
nations across the globe. Globalisation has expanded the cross
border transactions of goods and services with maximum support
of liberal trade policies of various nations. SASOL is a combined
company that produces energy and chemical which was
established in the year 1950s and is headquartered at Sandton,
South Africa.

An appropriate PESTLE analysis to illustrate
the broader and global influences on an
organisation such as SASOL
PESTLE analysis is a strategic tool used by the marketers to evaluate the
external environment factors that have impact on the organisation and
business strategies. It also help in analysing opportunities and risk
associated with it and further assist in future growth of business. With
reference to SASOL that is a energy and chemical producer that develops
and commercializes technologies to produce range of product streams.
The PESTLE analysis of SASOL would take into account the important
factors that will help in making accurate decision which are as below:

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Political: This is a factor which refer to the involvement of government that may influence a particular industry
or company by their tax policies, trade restrictions, reforms, environmental regulations and so on.
Economic: This factor is related to the economic growth of the company and its business that may be impacted
by the interest rates, exchange rates, inflation, wage rates and so on.
Social: This refers to the consumer standard that regulate their demand and behaviour which includes
demographics, cultural norms and expectations, health consciousness, safety etc.
Technological: This refer to the innovation, automation, research and development that may influence the
company's operations.
Environmental: This factor may be impacted by the surroundings of environment which include whether
condition, temperature, climate change etc.

An analysis of the key driving factors of globalisation
Globalisation has removed the barriers of trading across national borders that enables the mutuality and
interconnectivity of production processes and capital market. Moreover, it flows goods and services among
different nations that expand international trade and economic growth. There are five key driving factors of
globalization which are enumerated as under:
• Technological driver: The use of internet has made easy access of goods and services from anywhere in the
world.
• Political driver: The government has formulated various policies to facilitates cross border trade to other
countries.
• Market drivers: There are many firms that are involved in exporting and importing of their goods and
services across national borders.
• Cost drivers: As the competition increases, the firms are looking for the ways of obtaining and enjoy
• Competitive drivers: With intense competition among the firms, organisation are forced to play
internationally. cost saving.

Analysis of key drivers of Globaliasation
Globalisation Can be explained as the removal of trade restrictions or barriers for free trade of goods
and services across the nations globally. There are many reasons for globalisation such as increased
integration, interconnectivity and independence of process of production and capital markets and flow
of financial resources, services and goods. This has lead to the expansion of international trade and
economic growth across the globe in complex ways, but the main reasons behind globalisation can be
identified below:
• Digital Revolution
• Improvement in Technology
• International Economic Integration
• Socio-Cultural Convergence
• Financial Liberalisation
• Intense competition

Impacts of Digital technology on globalization
The use of spectrum and internet has made it easy to access goods and services produced at one
place to another place anywhere in the world. With the help of growing technology the
advancement of mobile phones and internet has become vibrant which is constantly growing. With
the help of internet technology and online business the producers had gained advantage of online
selling of their commodity across larger areas. The customers can compare prices, make orders and
pay online. Potential customers could search their products, choose them and purchase them on low
costs with easy online payment methods. Therefore, digital technology advancements made it easy
to carry out borderless transactions due to e-commerce and electronic banking, the digital
revolution enables initiation and completions of transactions globally.

Critical evaluation of strategic challenges and
complexities globalization brings to an organization
such as SASOL
While globalisation offers various benefits, but it also has its own consequences and challenges. The companies
such as SASOL faces many challenges while taking their business to the international boundaries. Some of the
hurdles that SASOL face while globalising includes:
• Managing employee immigration
• Incurring tariffs and quota barriers
• Payroll and Complaisance challenges
• Loss of cultural identity
• Foreign worker exploitation
• Marketing and communication challenges

Recommendations to overcome the challenges
An organisation such as SASOL could overcome these challenges by adapting to the
changes in the legal framework of the foreign nations and constantly keeping an eye on the
changes. Moreover, SASOL could employee the local people of that place instead of
investing finance on employee immigrations and transfers across the borders. The
employees and the company should work with the support of the local community to make
them more secure and being them socio cultural benefits. Complying with the trade and
tariff laws also the legalities of doing business across the borders in order to run their
business smoothly.

Conclusion
Globalisation has changed the ways of doing business and the market has turned as
multidimensional and complex. The report had been identifying the impacts of
globalisation on businesses with the help of PESTLE analysis. Moreover, it had been
analysing the key factors of globalisation such as rapid advancements in technology,
liberalization, greater opportunities in global market, etc. It had also been evaluating the
impacts of globalisation on the businesses and how these challenges can be overcome.

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