Global Business Environment: McKinsey S7 Model, Hofstede's Dimensions of Culture, Ethical and Sustainable Factors, and Strategic Expansion Routes for SASOL Company

This report analyzes the global business environment for SASOL Company using McKinsey S7 model, Hofstede's dimensions of culture, ethical and sustainable factors, and strategic expansion routes. It covers the impact of global operations on McKinsey 7S elements, ethical and sustainable factors for global markets, and various strategic expansion routes available to the organization.

Global Business
Environment

Table of Contents
PART 2............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
McKinsey S7 model for SASOL company............................................................................4
How the McKinsey 7S elements has been influenced by global operations and how the
organisation has adapted to operating in a global market......................................................5
Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has been
influenced...............................................................................................................................6
An evaluation of ethical and sustainable factors that the organisation has to consider in a
global market and how this impacts on decision making in a global context........................7
An assessment and critical evaluation of the range of strategic expansion routes available to
the organisation......................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

PART 2
INTRODUCTION
Globalization is the concept where countries remove various restriction for foreign
investment in their countries to allow other nation countries to have business. Globalization also
impacted upon internal factors of a business like their culture, organisational structure,
employees and management relationship and many others. Companies expand their business to
new market with the main aim of having more customers which further help them to gain more
profit and better reputation of the company (Mardonov and et. al., 2020). SASOL is a chemical
company which is founded in 1950 by P.N. Lategan. It is headquartered in Sandton, South
Africa. The following report covers McKinsey S7 model to understand organisational structure,
culture and governance, Hofstede dimension of culture for SASOL company to identify their
culture, ethical and sustainable factor for global market and their impact upon decision making
process. Beside this, it also covers route to internationalization.
MAIN BODY
McKinsey S7 model for SASOL company
McKinsey 7S model is used to analyse organisational design of a company which impact
upon their growth. This model is used to analyse internal factors of a company which help them
to grow well. McKinsey 7S model for SASOL company is given below-
Structure- It is the organisational structure which reflects the ways in which company is
organised. Chain of command and many others are the examples of structure. In context of
SASOL, their recently appoint six executive vice presidents for making important organisational
decisions. In is having. There are various department in this organisation which is managed by
their managers.
Strategy- It consist of all those plans and actions which a company make for achieving
competitive advantage in market. In context of SASOL, their strong technology and operational
heritage will help them to achieve competitive advantage.
Systems- It consist of technical structure of company which help them to make some
good decisions for the growth of their company. In context of SASOL, it is essential for them to
use most advanced technology which can purify their fuels to deliver it to different countries. It
is essential for them to maintain their technology updated because their factoring and inventory

management areas are at a high risk of explosion due to their product like petrol, diesel, LPG and
other chemicals.
Skills- It consist of all those capabilities and abilities of their employees which help them
to ach9ebe their organisational goal (Sabir and Gorus, 2019). In context of SASOL, their
employees are well skilled and innovative to work effectively.
Style- It consist of leadership and management style followed by a company which
further help to manage organisational employees well. In context of SASOL, they are having
democratic leadership style where decisions related to extraction of chemicals and fuels are made
by both managers and their employees together. In context of major decision like international
growth of company will take by board of directors like CEO, President and many others.
Staff- It involve recruiting, training and reward system for enhancing skills of employees.
In context of SASOL company, their employees are hired on the basis of their skills and talents
and the company tries to retain their talented companies for longer period of time to achieve
success. They provide training to their employees on regular basis.
Shared values- It consist of those beliefs and culture of company which help them to
archive their goal smoothly (Kihombo and et. al., 2021). It consists of organisational mission,
objectives and ethical values. In context of SASOL, their mission is to create superior value for
their customers by providing them their products and services according to their demands and
needs.
How the McKinsey 7S elements has been influenced by global operations and how the
organisation has adapted to operating in a global market
In context of McKinsey 7S model, their elements have been influenced by global operations by
following ways-
Structure- it is essential for SASOL to follow those structure which is flexible and
mostly used organisational structure in the country where they want to expand their market. This
will help them to operate their operational activities in smooth manner.
Strategy- It is essential for SASOL to make those strategies which help them to achieve
their organisational goal and which is accepted by their employees.
System- Technical structure of company is also related to their global operations. In
context of SASOL, their technological system can be adopted on the basis of skills of their

employees. It means the skills of employees will decide which kind of technical system is
beneficial for them to choose for effective communication.
Skills- The ability of workers and employees also impacted more upon global growth of
any company. In context of SASOL, they can hire skilled employees by focusing upon their their
requirements and legal law like minimum wages for them. It is also essential for SASOL to
identify the ability of working of employees so that they will set working hours accordingly for
different location.
Style- It consist of leadership style of a company. Leadership style is based on different
location and attitude and behaviour of employees. In case SASOL need to expand their business
in a particular country then they are required to analyse the behaviour and attitude of their
employees in that particular area so that they will adopt leadership style accordingly which will
help them to manage their employees.
Staff- Training and recruiting is also based on culture and ability of their employees as
well as laws of different nations.
Shared values- This element is also related to employee’s behaviour and attitude. It is
suggested to managers of SASOL, to identify what all values will help them to motivate their
workforce to engage them self to increase organisational productivity.
Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has been
influenced
Hofstede's Dimension model is used to analyse culture of a nation which impacted upon
organisational growth. Hofstede's dimension of culture of SASOL for UK and South Africa is
given below-
Power distance- It is the degree of society to accept or reject inequality distribution of
power among themselves (Baloch and et. al., 2021). In context of South Africa, their population
have no issues and need no justification for the different kind of power distribution in their
organisations. On the other hand, UK population is strictly disagreeing for accepting inequality
in power distribution. Hence, SASOL is suggested to distribute power equally in UK and in case
of any difference in distributing power, then they are supposed to provide strong justification to
their workforce.
Uncertainty avoidance- This is the degree of tolerating risk and uncertainties by the
employees of a company. In context of South Africa, their population are scoring low for this

factor which means they can tolerate risks but on the other hand, UK employees are not ready to
tolerate any risk within the company which can impact their organisation efficiency. Hence,
SASOL is suggested to manage their risk and try to predict future risks so that their UK
employees will not get dissatisfied.
Individualism- collectivism- It consist of degree of independence of society. In context
of South Africa and UK both, they are having high degree for individualism where they are
required to provide time for themselves and for their families first and loose interest for social
networks (Bosworth, Franko and Pickering, 2018). Hence, in context of SASOL, it is suggested
that they can provide benefits to their employees like maternity leaves and leaves on special
occasions of the country so that their employees will spend time with their families and get more
satisfied.
Masculinity- Femininity- It consist of those factors which motivate people for positive
outcomes I context of South Africa and UK both are masculinity society where they motivated to
work together and respects high competition, they resolve their conflicts and many others.
Hence, SASOL is suggested to promote high competition within their organisation by hiring
skilled and talented employees and provide them task to get complete.
Time oriented- It consist of two factors long term goals and short-term goals. In context
of UK and South Africa both they are interested to resolve their problems as soon as possible and
focuses on their short-term goals. Hence, SASOL is suggested to maintain their organisational
culture in both countries by focusing on their short-term goals and motivate their employees to
achieve them.
Indulgence and restraints- It is the extent to which population of a country control their
desires and wants. Population having strong control on their desires are called restraints and
those are having weak controlling power are called indulgence in context to enjoy their life. In
context of UK and South Africa both they are having weak controlling power to enjoy their life
with freedom.
An evaluation of ethical and sustainable factors that the organisation has to consider in a global
market and how this impacts on decision making in a global context
It is essential for every company to focus on their ethical and sustainable factors in
context of global expansion of business. Few of the ethical and sustainable factors which must
focused by SASOL company is mentioned below-

Avoiding child labour- SASOL must avoid to hire employees whose age is below 18. It
could be dangerous for the reputation of their company in case they appoint young (below 18)
age group of people in their organisation for work. This will impact positive upon decision
making strategies of the company. Here, SASOL can make decisions by hiring those employees
who are physically and mentally fit. This will also help them to increase their productivity.
Take measures for control carbon dioxide- It is one of the sustainable factor which
must be used by SASOL to control their carbon dioxide gasses which releases from their
factories for purifying their petrol and diesels. This will help them to develop their brand image
for protecting their environment.
Maintaining rights of employees- It is essential for SASOL to focus on the rights of
their employees like sufficient payment for their working hours, appropriate holidays,
compensations and many others to motivate them and to protect their rights (Salahuddin and et.
al., 2019). Here, they are required to provide safety kits to their employees who are working on
mining sites.
Following all political restrictions and paying tax on time- It is also one of the most
essential ethical practice of SASOL that they can follow all political restrictions for their
companies and pay tax on time without any corruption. This will impact upon financial decisions
of SASOL where they are required to invest more upon productive activities and reduce their
unproductive activities so that they will gain more profit.
An assessment and critical evaluation of the range of strategic expansion routes available to the
organisation
There are various methods for internationalization of business which are explained below-
Franchising- It consist of involving two party franchisor and franchisee where franchisee
use the name of franchisor which is a main company and sell similar products and services
(Pastor and Veronesi, 2018). In context of SASOL, they can use this method by allowing other
companies to use their name and production processes. This will help them to understand their
new customers well and gain high brand recognition. It is having few drawbacks also like by
adopting franchising method SASOL can face the issues of management, they are unable to
manage all franchisee properly and unable to monitor whether their franchising company is
working ethically or not. In case their f ranching company performs bad then this will impact bad
upon main company' brand image.

Exporting- It consist of that internationalization method where company have their
business in their home country but they sell their products and services to their countries on
regular basis (Wang and Sun, 20210. This can be beneficial for SASOL to invest low and expand
their business to other countries. Here, whole management and controlling power of SASOL is in
the hand of their employees only. It is having demerit too by having various kind of trade
restrictions and paying export charges. Conflict between two or more countries also acts as
obstacle for SASOL to export their petrol and other chemical substitutes to their targeted
country.
CONCLUSION
It is concluded from the above information that globalization is the process of removing
restrictions for FDI within a company and interacting with the people, company and government
at global level. McKinsey 7S model is used to analyse internal factors of a company and how
they can manage these internal factors to expand their business. Hofstede's dimension model is
used to analyse culture of a nation which will help them to follow the same culture in which the
company want to expand. Following ethical and sustainable practices will help the company to
gain higher brand reputation and brand recognition. It is also concluded that there are various
kind of methods which can be adopted by a company to expand their business-like franchising,
exporting and many others. These methods are also having few drawbacks. Hence, companies
are required to compare the merits and drawbacks of these methods and then adopt those method
which is having least drawback and maximum benefit for company to maximize their profit.

REFERENCE
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