Global Business Environment: Evaluating Globalisation's Impact on SASOL Limited

This report evaluates the impact of globalisation on SASOL Limited's governance, leadership, structure, culture, and functions. It also discusses the different modes of internationalisation for SASOL Limited and the key barriers. The report critically evaluates the influence of globalisation on the organisational culture and structure and critiques strategies that can be adopted by companies operating within a global business environment.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
PART 2............................................................................................................................................1
Introduction............................................................................................................................1
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions..............................................................................................2
P4 Evaluate the impact of ethical as well as sustainable globalisation on organisational
functions.................................................................................................................................5
M3. Critically evaluate the influence of globalisation on the organisational culture and
structure..................................................................................................................................5
P6. Discuss the different modes of internationalisation for SASOL limited along with the key
barriers....................................................................................................................................5
M4. Evaluate the key barriers and recommended the different ways to overcome them......7
D2. Critique strategies which can be adopted by company operate within a global business
environment, develop justified and valid recommendations on how they should adapt their
organisational structure & decision-making procedure..........................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Global business environment can be defined as the surroundings or the environment that
resides in the various sovereign countries that also include various factors that involves the use
and capabilities of the resources (Nisula and Pekkola, 2018). In this report SASOLimited is
chosen as the organisation. It is basically a chemical and energy integrated organisation which is
based in Sand-ton, South Africa. The organisation was founded in 1950 and headquartered in
Sand-ton, South Africa. In this report it involves the concept of globalization and Pestle analysis
and global impact on the organisation with key driving factors of globalisation and impact of
digital technology upon globalisation with evaluation of the opportunities and challenges of
globalisation and various recommendations on how to overcome these challenges. The report
further involves brief explanation of governance structure and culture within the company such
as SASOL with application of the 7Smodel to the company with the incorporation of the
McKinsey's 7S model and Hofstede's Dimensions of culture with evaluation of the sustainable
and ethical factors that the company has to taken into consideration with evaluation of the range
of strategic global expansion routes and strategic decision-making in relation to the
diversification and risk.
PART 1
(Covered in PPT)
PART 2
Introduction
Strategic direction basically involves various plans and procedures which need to be
implemented within the company for the objective to achieve its goals and objectives. The
strategic direction helps in ensuring the management and owners of the organisation to
communicate for the employee's work importance and also to contribute towards the
achievement of business objectives(Coulson-Thomas, 2021). The main objective of this report is
to understand the governance, structure and culture within the company like SASOL with
application of the McKinsey's 7S model and application of the Hofstede's Dimensions of Culture
with evaluation of the sustainable and ethical factors which are important for the organisation
with evaluation of the strategic decision-making in relation to the diversification and risk and
evaluation which are highly critical of the range of strategic global expansion routes.
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P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
McKinsey’s 7S model
McKinsey's 7S Framework is basically considered as the management model which is
basically developed by the business consultants such as Tom Peters and Robert H. Waterman, Jr.
in the 1980s. This framework basically involves the teams, businesses and business units. The
7S's involves the shared values, systems, staff, strategy, style and systems. When it comes to
companies and organisations, each individual organisation has a different objective or aim and
the variation of goals basically depends upon the structure, governance, culture and leadership of
the company. For the objective to evaluate the influence of globalization it is very important to
have a clear understanding of the various concepts. When it comes to organisational structure it
basically includes the allocation of the duties and rights, line authorities and communications.
The culture of the organisation involves the set of assumptions, values and beliefs which are
shared by the organisation's members(Nuwanpriya Sashimal Galappaththi, 2018).
In context to the governance of the organisation, it involves the las, processes, polities
and customs which basically affects the controlling process of the company. In context to
SASOL Limited, it is a high growth organisation in South Africa. The organisation in today's
scenario is planning to participate in the trading and global commercialization process.
Moreover, in order to evaluate the influence and impact of globalization on the SASOL Limited's
culture, governance, functions, leadership and structure, the organisation applies Mckinsey 7S
model. In context to SASOL, the organisation apply this model in a situation where they face any
kind of face vacillation in relation to the organisation governance and structure in some of the
particular activities. From all the available seven factors strategy, systems and strategy are
considered as Hard S and style, shared values, skills and staff are considered to be Soft S.
Strategy: It basically involves defining a plan which basically helps the organisation for the
purpose to gain a competitive advantage in the marketplace and also focusing on successfully
retaining the existence of the company in the organisation. In context to SASOL Limited, the
organisation tries to articulate its strategy in a defined and clear manner for the objective to attain
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a competitive advantage in context and relation to culture, structure and governance(Kubás,
2018).
Structure: It basically involves the organisation structure and accessibility of different units and
business divisions for the objective to ensure the accountability in a proper manner. In context to
SASOL Limited, they are having their operations in different regions for the purpose to
determine the various available structure in various regions.
Systems: In context to organisation, it need to focus on various areas that basically involves the
data visualization, risk management, improving internal processes, web app optimization and
Customer Relationship Management. In context to company, the organisation need to put up in
the robust system that allows the employees to work fro home which results in greater interaction
among the people and employees both in the physical environment and online environment. IN
addition to that it involves enhancing and improving the productivity but also helps in increasing
cyber security and data security.
Skills : In context to the company, the organisation can build its development program and
improved structure training for the people and employees working from the remote based
locations. The organisation can recruit fresh talent easily.
Style and Culture: In relation to the leadership styles, their requirement is completely different in
the remote scenario and physical location. When it comes to remote locations, the employees
need to work in an isolated surroundings whereas in the physical environment, the managers of
the organisation can go through the work and provide inputs. In context to the organisation, it is
important to improve the workflow and moreover the organisation's leaders need to focus on
building smaller teams as part of the larger teams.
Shared Values: In context to organisation, the company has a built a successful business model
which is based upon the mission, values and vision. In addition to that, the organisation should
focus on sustainability and moreover,the investors need to put up more stress and focus on
governance, environmental and societal issues with the help of using the concept of Triple
Bottom Line(Direction, 2018).
Hofstede’s Dimensions of Culture
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The Hofstede's Dimensions of culture was basically developed in order to understand the
values of the organization which are highly impacted by the culture of nation. The six
dimensions involved in this model are power distance, long term orientation versus short term
orientation, indulgence versus restraint, masculinity versus femininity, uncertainty avoidance
index and power distance. This framework is widely implemented in the marketing studies,
sociology, psychology and management. Moreover, the framework is highly useful in comparing
different nation's culture and to conduct studies related to cross-cultural.
Power Distance: It basically is related to unequal distribution of measures and power that are
actually faced the members who are considered to be weak in the society. In context to Sasol Ltd,
the company's cultural dimensions are determined with the help of this model for the objective to
understand the norms and cultural values of the company. In context to Sasol Ltd., the
organisation scored low on the power distance which depicts that the organisation should focus
on equal rights within the government and the society.
Individualism versus Collectivism:
The individualism basically involves the preference of the individuals involved in the
society and which basically includes people who are more focused on themselves and their
immediate families whereas Collectivism involves the society that includes themselves as a part
of the group. In context to Sasol Ltd, the employee's also shows different kind of characteristics
are also they are more focused on valuing the self-expression and independence. The employees
have strong individual goals and work ethics.
Masculinity versus Femininity
This dimension involves the acceptance of the females and male values in a culture. In
context to society where the feminine values involve better quality of life and are highly
dominant whereas those who embraces masculine values focus on wealth, success and personal
accomplishments. In context to Sasol Ltd, the organisation focuses more on celebrating monetary
rewards and improving social standards as compare to that of the non-monetary ones.
Uncertainty Avoidance: It basically involves the extent to which where individuals try to avoid
unpredictable or unclear situations or the individuals who become uneasy with the behaviour and
norms of the company. In context to organisation, the culture of the company involves openness
towards the fresh opinions and ideas. The employees of the company do not get stressed while
facing a unavoidable situation.
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Long Term Orientation versus Short Term Orientation
The long term orientation basically involves nurturing the virtues like thrift and
perseverance towards the future rewards whereas short term orientation involves current and pat
rewards that involves the preservation of face, respect for traditions and fulfilment of social
obligations. In context to Sasol Ltd, the company follows a short term approach and is quite
aware about the business issues and external environment.
Indulgence versus Restraint
It is basically a new dimension which was added in the 2010 and is highly based on the
world values survey items. In context to Sasol Ltd, the culture of the organisation is also
indulgent and also the employees of the company receives various benefits that involves remote
working and flexible working hours (Mallapragada, 2020).
By analysing the above, it is evaluated that Hofstede framework allow an organisation to
gain insight about the differences among countries culture and how to manage this differences in
an appropriate manner. In addition to this, it also assist to illustrate the values of diverse cultures
which not only impact on how people with various culture and background behave but also the
way in which they potentially behave when working in different country. In context to Sasol Ltd,
this help its managers and leaders to gain knowledge about the culture and values of its
employees who belong from different countries. Moreover, it also help them to deal with the
changing culture and run all the activities in an effective manner. It is determined that
globalisation has positive impact on the culture of respective organisation as it assist to know
about value and ethics of different culture and work with them that further help them to maintain
productivity and performance as well.
Organisational Structure:
It is defined as s system which outlines how activities are directed on order to attain
objectives of an organisation. Along with this, it determines how information flow between
levels within an organisation. There are different forms of organisational structure and is given
below:
Functional structure: It is also defined as bureaucratic organisational structure which
breaks up an organisation based on the specialisation of its employees. In addition of dividing the
company into departments including sales, operations, marketing and so on.
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Divisional structure: It is one of the common form of structure and herein organisation
have a control on their resources. In addition to this, each division has its own sales team ,
marketing team and so on.
Team based organisational structure: This structure is mainly take place in order to
disrupt the traditional hierarchy and is focusing on co-operation, problem solving and giving
staff members more control.
It is analysed that Sasol ltd. follow functional structure as it help in dividing the work into
different teams as per the specialisation of employees which will further help in effective and
systematic execution of activities. In addition to this, it also help staff members to focus on their
role and help teams to feel self-determined which is one of the important aspect to maintain
productivity and performance as well.
P4 Evaluate the impact of ethical as well as sustainable globalisation on organisational functions
It is analysed that ethical sustainable globalisation has direct impact on the functioning of
an organisation. In addition to this, globalisation and its related has assumed to be the economic
principles which is associated with the rise of global business Organisational functions are the set
of core activities designed to carry out in various departments and areas of a company. The
functions include marketing, human resource management, sales, finance, operations etc. of a
company. The impact of associated aspects on the functions of SASOL is given below:
 Human resource management- The greatest resource available to a business is its
workforce. As a result of globalisation, human resource management has become very
difficult to carry out. Differences produced by globalisation has proved to be a problem
for the employees and firm's motivation. Managers now have to make strategies that are
accepted globally and keeping the fact in mind that it can impact different people in
different ways. The problems relating to gender discrimination, child labour, inequality in
payment are also addressed by globalisation morals.
 Finance department- In order to sustain long-term financially, it is essential for a firm to
adopt strong moral principles including being right and true to any party involved in the
business and not participating in any malpractices. In the model of SASOS, sustainable
and ethical globalisation has a major impact on the financial working of the organisation.
 Sales and marketing department- Globalisation results in diverse customers interaction
in the business which leads to ethical difficulty for an organisation. The impact of the
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market rules and policies such as customer interaction, distribution ways and costing etc
has impacted sales and marketing department of SASOS huge.
M3. Critically evaluate the influence of globalisation on the organisational culture and structure
It is analysed from the above models associated to leadership, culture and structure in the
SASOL ltd that globalisation has direct impact on the structure and culture of company. In
addition to this, there is different type of culture arise at workplace due to globalisation and to
deal with this is important for an organisation. It is significant for SASOL ltd. To identify the
culture while entering into the new foreign market as it helps to avoid issues associated to culture
and also improve the productivity and performance by providing benefit of diversifying
workforce.
P5. Discuss the influence of globalisation on the decision making and the ways by which it can
work effectively
Globalisation will lead to have major influence over the decision making of the
organisation as well as it will lead to have affect over the effectively working of business.
Company have to deal with several issues and risk in strategic decision making in order to
successfully attain desired goals. In this globalisation will have crucial impact on capabilities or
potential of respective company that is SASOL to take right decision as well as improve
business practices. While conducting business at global level company will have high pressure to
determine different factors that will have direct or indirect impact over decision making or
functioning of SASOL organisation. Different influence of globalisation on decision making or
way of effective working is mention below -
Leadership – Globalisation practices of organisation will lead to enhance diversity with in
the culture of the company so it is important to consider effective leadership practices to attain
desired goals. SASOL company needs to consider transformational leadership style in order to
gain growth and improve effectiveness of employees working.
Demand of internal diversification – Increase in competition as well as growth
opportunities can be consider as the true reason for globalization. In this SASOL company needs
to take decision of improving internal diversification so that respective company can expand its
business practices in different foreign market area along with this gain sustainable competitive
edge over other rival companies.
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P6. Discuss the different modes of internationalisation for SASOL limited along with the key
barriers
Internationalisation is defined as a concept through which a company develop its
operations in new market or across the national boundaries of an organisation. In addition to this,
it is analysed that exporting and importing of goods and services from the foreign market take
place in various modes as this help company to enter into new market in an effective manner.
Internationalisation assist an organisation to achieve sustainable competitive edge, decline
production cost, access into new market, develop brand image and so on. The various modes of
internationalisation along with the key barriers is given below:
Franchising: In this method, the owner of the develop business allow ethical and legal
rights to the other person that is franchisee for selling the goods as well as services within native
country. In addition to this, it is advantageous for organisation as it provide direct passage within
the international market and develop brand recognition (Bingemer, 2022). This method is
consider as an effective foreign market mode and is immensely profitable for a company.
Key Barriers
 One of the key barrier associated with this mode is it require contract law and intellectual
property rights. In addition to this, there is less control of a franchise within the decision making
associated to development of products and marketing strategies as well.
Piggy Backing: It is another mode of internationalisation and herein two organisation who are
not competitive to each other come together with the aim to sell each other’s offerings within
their own home countries. One of the main objective of piggybacking is to exploit economic
scale that is positive for both organisations.
Key Barriers
 One of the key barrier herein is to trust intentions of other organisation for handling all
the marketing and promotional activities mainly when the origin of country is different. Along with this, In Long run the owner of organisation lose control from the offerings by
piggy backing that can be costly and time consuming for the owner.
Joint venture: It is another method to route into international market and herein two or more
than two forms from different locations come together by a contract for working together as a
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unit. In addition to this, it is also considered as partnership for strategic alliance in which parties
themselves comes into a contractual agreement for specific time frame.
Key Barriers
 One of the key barrier associated with this method is the integration of two various
cultures that develops negotiation complex.
 Another barrier is different within the objective of company thereby unclear
understanding of vision and mission that further leads towards ineffective execution of
activities.
From the above modes of internationalisation, it is analysed that Joint venture is an effective
method for SASOL ltd as it helps them to develop partnership and working together with other
organisation in an effective manner.
M4. Evaluate the key barriers and recommended the different ways to overcome them
It is analysed that one of the major barrier for internationalisation between the organisation
is lack of internal and external business environment. In addition to this, the trade barriers across
the national boundaries enables the company to include themselves into internationalisation for
exporting and importing of raw materials & other finished products (Coulson-Thomas, 2021).
Thus, it is suggested for SASOL ltd to first identify its strategic capabilities that is unique core
competencies & other threshold resources which can assist to organisation to attain competitive
edge into international market. Moreover, it is suggested that company should decline the
barriers over international trade as this will assist company to enhance international trade for the
overall economic growth of company.
D2. Critique strategies which can be adopted by company operate within a global business
environment, develop justified and valid recommendations on how they should adapt their
organisational structure & decision-making procedure
It is analysed that globalisation of a corporation have significant influence on the operations
and decision making of those who is responsible for making these difficult interconnected
selections. In addition to this, it has impact on the structure as it has arisen change in
management style, strategic option and also decline international trade constraints. It is
recommend to SASOL ltd to analyse the global business environment, employing effective staff
members, ensure effective execution of activities and many more (Direction, 2018). In addition
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to this, it is suggested to consider the viewpoint of each and every employee as it assist in
making effective decision and ensure organisational structure as well.
CONCLUSION
From the above discussion, it has been concluded that globalisation is one of the significant
and important aspect for the growth and success of an organisation and is thereby impacting the
decision making and resources of company. In addition to this, it is important for an organisation
to conduct internal and external analysis of company as it hep in developing effective strategies
and core competencies which is vital to attain competitive edge at marketplace. It is determined
that there are different key forces that impact on the global commerce and trade that is cost,
market, competition and many more. Moreover, it is analysed that there are various modes of
internationalisation that is franchisee, joint venture and many more which is associated with
some form of key barriers. Furthermore, it determined that is direct impact of ethical as well as
sustainable globalisation on different functions of an organisation such as Human resource,
marketing and many more.
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REFERENCES
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Executive, 24(4). pp.7-29.
Direction, S., 2018. Corporate social responsibility tweeting: The power of Twitter in an age
where corporate social responsibility really matters.
Kubás, J., 2018. ENVIRONMENTAL POLICY AND ITS IMPACT ON QUALITY OF LIFE
AS PART OF STRATEGIC DOCUMENTS OF LOCAL SELF-
GOVERNMENT. International Multidisciplinary Scientific GeoConference:
SGEM, 18(5.2), pp.363-370.
Mallapragada, G., 2020. Strategic Emphasis and a Firm’s Choice of Governance Mode: The
Moderating Role of Internal Leadership & External Monitoring. Available at SSRN
3612429.
Nuwanpriya Sashimal Galappaththi, A., 2018. Impact of entrepreneurial characteristics of
entrepreneurs on the strategic orientation in small and medium scale manufacturing
industry in Monaragala.
Tasmania, C., 2019. Strategic Plan for Out of Home Care in Tasmania 2017-2019.
Dinçer, H., Yüksel, S. and Adalı, Z., 2019. Economic effects in Islamic stock development of the
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Gabryelczyk, R. and Roztocki, N., 2018. Business process management success framework for
transition economies. Information Systems Management, 35(3), pp.234-253.
Sahar, E., Wan-Hussin, W.N. and Ling, O.H., 2022. Sustaining the Yellow Heart: responsible
business by reducing inequalities at Digi Malaysia. Emerald Emerging Markets Case
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Luo, Y., 2020. Adaptive learning in international business. Journal of International Business
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Ilin and et. al., 2018, December. Business requirements to the IT architecture: a case of a
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Bingemer, S., 2022. Business Travel Management. In Encyclopedia of Tourism Management and
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Reshetnikova, N., Magomedov, M., Buklanov, D. and Zakharchenko, E., 2018, April. The
international business cooperation and its influence on enterprise financial security under
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Increased collaboration: Globalization has encouraged the process of cooperation among
entrepreneurs with intend to rapid development, modernization and technological
advancement.
Economic reforms: Globalization provides strength to free trade, enterprises and market forces
by encouraging fiscal and financial reforms brought by the governments. It provides
freedom of access to world market and free flow investment across borders. Thus,
globalization help countries in liberalizing their import protocols and welcome foreign
investment into the sectors.
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Political factors:
In relation to Sasol ltd., government policies and tax rates affects the company in order to
maintain competitiveness by controlling cost of its products. It is important for the
company to examine the current trends of political scenario because change in
government may also affect the policies or priorities towards the development of the
industries.
Economic factor:
In relation to Sasol ltd., the GDP growth rate determine the company's ability to pursue its long
term goals. The growing GDP also indicates the ability of consumer to spend more on
products or services and increase the sales and revenues of the company. Sasol ltd. also
considers the interest rates as it affects the borrowing ability or attitude towards the
investment and influence the profitability or international trade.
Social factor:
In context to Sasol ltd., it develops local teams and local partnership to understand the societal
attitudes and norms to tailor marketing strategies according to unique culture. The
company need to understand the taste of the consumer in order to choose the right
market segment with high growth potential.
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Technological factor:
In relation to Sasol ltd., it should consider the on-going technological innovations to stay ahead
of the competition. It can leverage the opportunities offered by the social media
marketing to improve the performance and develop online brand communities or invest in
disruptive technologies to maximise the profits.
Legal factor:
With reference to Sasol ltd., it follows the employee health safety laws to provide secure
environment. Moreover, it also considers other laws that assist in setting maximum price,
ensure a certain quality standard and protect consumer form fraudulent marketing claims.
Environmental factor:
With reference to Sasol ltd., the company is compelled to increase the cost of operations due to
weather change and make the value chain more flexible. Further, it focuses on
environmental sustainability and recycling of the products that enable the company to be
more ozone-friendly.
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Technological drivers:
The use of internet makes it easy to quick access of goods and services and carry out borderless
transaction due to e-commerce or electronic baking from anywhere in the world.
Market drivers:
The business uses joint ventures, licensing, and franchising to import or export in order to make
their product reachable to the customers. This enables the firms to meet the needs of the
customers without any hindrances
Cost drivers:
This can be achieved through economies of scales when firms produces the same products for
huge market. This requires firms to induce huge investment in promoting their products
globally. However, cost driver may be less applicable for the services that are based on
the people. In this situation the economies of scale tend to be lower and experiences lone
relatively flatter.
Competitive drivers:
They look for the market across borders in order to protect its position in existing markets. The
search for foreign market are facilitated by increase in foreign direct investment where
the investors invest to the firms for gaining higher returns on their investment.
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Social media platforms:
Social media platforms such as Facebook, Instagram and many more has put a great impact on
social interactions, financial institutions and provided different ways of completing
transactions. In relation to this, the introduction of video conferencing tools such as
Skype has helped business professionals to trade without leaving their country thus
resulted in reducing trade costs.
3D printing:
This technology has helped the company to significantly reduce costs and overcoming
geopolitical tariffs. In addition to this, It helped the firm to improve customer service and
reducing carbon footprints which overall boosted the pace of globalisation.
Block chain:
This technology has enabled more efficient and more secure trade finance which helps the bank
in reducing risks. In addition to this, it provides substantial benefits for favourable trade
follow thus improving global trade to a greater extent.
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