Global Business Environment: Challenges and Strategies for SASOL

This article discusses the impact of globalisation on SASOL, a chemical and energy company in South Africa. It covers PESTLE analysis, driving factors of globalisation, digital technology, and Hofstede's Dimensions of Culture theory. The article also evaluates the challenges and complexities of globalisation and provides recommendations on how to overcome them. Additionally, it applies McKinsey's 7S model to SASOL and evaluates how global operations have influenced it.

Global business
environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................4
PART 1............................................................................................................................................4
An appropriate PESTLE analysis to illustrate the broader and global influences on an
organisation such as SASOL.......................................................................................................4
An analysis of the key driving factors of globalisation...............................................................5
Evaluation of the significant impact of digital technology upon globalisation..........................6
A critical evaluation of the challenges and complexities globalisation brings to an organisation
such as SASOL...........................................................................................................................6
Recommendations on how such challenges can be overcome....................................................7
PART 2............................................................................................................................................7
McKinsey’s 7S model to the organization..................................................................................7
An evaluation of how the above has been influenced by global operations and how
organisation adopt to operating in global market........................................................................9
Applying Hofstede’s Dimensions of Culture theory...................................................................9
An evaluation of ethical and sustainable factors that the organisation has to consider in a
global market ............................................................................................................................10
Critical evaluation of strategic decision making in relation to risk and diversification in a
global context............................................................................................................................11
Evaluation of the range of strategic global expansion routes...................................................11
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The global business environment is consists of various components and factors that
impacts on functioning of a international business (Akhtar, and Sushil, 2018). Globalisation is
the main revolution which has allowed exchange of information and trade over different
countries all over the world. The concept of globalisation is wide and vivid in nature as it
includes worldwide business activities in order to promote trade practices. Most of the global and
domestic companies are supported by act of globalisation as it has facilitated trade and
development across the borders. The project includes example of SASOL company which is
performing operations in the field of chemicals and energy and was founded in the year 1950.
SASOL company is located in SASOL burg, South Africa and was first developed by German
scientists in the early 1900s. In this project there is a brief explanation of PESTLE analysis along
with the key driving factors of globalisation. This project will also cover impact of information
and technology on globalisation and its dimensions.

TASK
PART 1
An appropriate PESTLE analysis to illustrate the broader and global influences on an
organisation such as SASOL
The PESTLE analysis is one of the major frameworks that helps a company to analyse
macro or external environment. The PESTLE analysis is also used by many professional
companies in order to develop effective and appropriate strategies to deal with consequences of
environment. PESTLE analysis of SASOL is mentioned below:
 Political factors- The political factors are associated with rules and regulations
formulated by government in order to control business organisations. Key role of SASOL
is to analyse the political factors which are effective in making it more competitive at the
marketplace (Berman, and Dalzell-Payne, 2018). The majority of business organisations
also analyse the importance of political factors and implement them for performing
ethical business.
 Economic factors- Business entity should be focusing on all economic factors in order to
develop financial operations. The economic factors are related to inflation, deflation and
recession rates that are prevailing in the economy. Demand and supply of key products
and services should be analysed by business to fulfil wants and needs of customers.
 Social factors- The social factors are related to traditions and culture of society which
should be understood by business. It is key role of a business to develop effectiveness in
analysing social factors to develop major approach. The social factors also helps in
understanding culture and values of employees.
 Technological factors- Technological factors are associated with information and
technology based solutions which are helpful in increasing chances of competitive
growth (Halbert, and Ingulli, 2020). The SASOL takes of IT tools like customer
relationship management software and management information system to perform key
tasks in a quick and accurate manner.
 Environmental factors- The environmental factors are related to norms and policies that
are effective in development of sustainable business. It is most important role of SASOL
to follow environment policy of government in order to develop focused approach.

 Legal factors- Legal factors are associated with laws and acts developed by local
authorities. SASOL company is focusing on following on key legal factors that are
important for business development. It is major role of a company to analyse the
significance of legal factors and perform operations accordingly.
An analysis of the key driving factors of globalisation
The major driving factors of globalisation are crucial in making a company more oriented
towards performing international trade. Main factors which has made SASOL perform global
trade operations are mentioned below:
 Cost management- In the recent times, management of cost is considered as key
approach which has made companies more effective. The financial management of
companies is getting more competent as it includes expert employees. Main role of a
business to understand concept of cost management and implement it with main
supervision and control.
 Market expansion- The expansion of marketplace due to globalisation is main factor
which contributes to company success. It is one of the key role of a business to develop
market expansion with the help of effective approach that is helpful in growth and
expansion in global marketplace.
 Globalisation- The globalisation is one of the major factors that has impacted on
functioning of different companies in the international marketplace (Hampden-Turner,
Trompenaars, and Hampden-Turner, 2020). It is main role of a business to understand the
impact of globalisation by developing chances of competitive growth.
 Professional employees- The professional employees are important resource for the
organisation as they help in assisting in majority of operations. Presence of professional
employees makes a company more dynamic at the marketplace. It also enhances the
value of the company and helps in achievement of competitive advantage.

Evaluation of the significant impact of digital technology upon globalisation.
The digital technology is considered as key approach which has helped many
international organisations including SASOL to perform systematic operations. Key IT tools are
most important for a business in order to perform key and accurate operations. It is the major
responsibility of IT department of SASOL to use majority of information and technology based
tools to develop systematic operations. The different companies in the marketplace should also
focus on implementing major and advanced technology to develop effectiveness in major
functions. The digital technology is also considered as major approach which helps the business
to perform quick and accurate operations. It is one of the major role of a business to focus on
implementing best services related to information and technology to perform key operations and
functions (Ibidunni, Ogundana, and Okonkwo, 2021). The impact of digital technology on the
functioning of SASOL can be analysed by increasing the chances of competitive growth. The
rules and regulations related to IT should be also developed according to nature and size of
business. As SASOL is a large multinational company, it includes focus on developing large
number of operations based on IT.
A critical evaluation of the challenges and complexities globalisation brings to an organisation
such as SASOL.
The major challenges faced by SASOL due to globalisation, which also impacts on its
revenue and profitability are mentioned below:
 Risk- Risk is the important part of global business, it enhances the chances of failure and
may impact on a business in a negative manner. This is most important role of
management of SASOL to adopt appropriate risk management strategy for developing an
effective and efficient approach.
 Trade barriers- Trade barriers are related to the major obstacles which prevent company
from trade all across the globe. Strict guidelines issued by government authorities are one
of the key trade barrier that is faced by SASOL company. In order to increase chances of
growth and development the company should deal with trade barriers with more
effectiveness (Kasemsap, 2018).
 Government rules and regulations- The government rules and regulations are the most
crucial part of a business. It is major role of a business to focus on following the
professional laws which are related to international laws.

Recommendations on how such challenges can be overcome
The recommendations are set of principles which are to be obeyed by SASOL to
overcome major challenges and hurdles. This is most important role of a business to focus on
following certain recommendations in order to develop successful business. The precise
recommendations for SASOL are mentioned below:
 SASOL should hire professional and expert employees in its strategic department to
develop systematic approach in planning.
 The company must develop a major risk management approach in order to
eliminate risk associated with the operations. Company should also increase chances
of business success by formulating risk management strategies.
 SASOL must use information and technology based approaches in order to become
more successful at the marketplace.
 The company should increase chances of development by organising key meetings
and conferences in order to also facilitate decision making.
PART 2
McKinsey’s 7S model to the organization
Mc Kinsey 7s model is based upon making analysis done about organizational structure of an
company by applying seven principles elements. These elements are related with each other and
has been categorized in soft and hard aspect (Kasemsap, 2020). The model includes structure,
strategy, shared values, systems, style, skills and staff in an organisation. SASOL Limited is an
chemical and energy based organization operating within South Africa. This model is used for
providing assistance upon supervisors helping in developing achievement of goals and
objectives. These seven principle elements facilitating managers of SASOL Limited which
makes competitive advantage achieved upon its competitors and has been discussed as follows:
 Structure: This is based upon business departments which holds accountability towards
developing organizations structure. There are different organizational structure used that
is functional organisational structure, hierarchical organisational structure, flat
organisational structure, etc. SASOL Limited, flatter organizational structure which is
followed by manager of an organization which encourages communication within
supervisors and subordinates of an respective organization.

 Strategy: The plan that has been used for building an organization while maintaining
competitive performance within market is based over business strategy. Supervision of
SASOL Limited follows effective strategies which makes facilitation possible which is
based upon marketing events that has made research and identified data in order to make
information taken with appropriate decision.
 Shared values: The mission, vision and objective of an organization relates with central
values which is known a shared values within an organization for directing organization
in aligning with key element present within an organization. SASOL Limited through this
is able to motivate human resource of an organization making objectives achieved in
efficient manner.
 Systems: The procedure is based upon daily activities of business which makes workflow
created within an organization. This allows distinct systems created within an
organization that is MIS. It leads upon making administration of SASOL Limited monitor
business activities with strategic planning which makes organizations targets completed.
 Skills: These are based upon abilities and proficiencies related to human resource within
an organization helping in achieving growth for an organization (Kokodey, Gnezdova,
and Lomachenko, 2018). SASOL Limited is able to enhance its training and
development system which make workforce efficiency achieved with their skill
improvement. It helps in making task completed without any difficulty.
 Style: It is based over attitude of senior level management making controlling and
directing of subordinates possible while making strong business decisions. SASOL
limited used democratic leadership which is followed by supervisors of an organization
making instruction provided to subordinates helping in improving business with its
various perspectives and profit generating capacity.
 Staff: It involves the personnel present in the company for performing and maintaining
the operations of daily business activities. Within SASOL Limited, there are 30,100
manpower’s working in the company for making business decisions. Staff of the
respected company also provides training and development skills to its less skilled human
resources so that they can also work effectively and efficiently in the company.

An evaluation of how the above has been influenced by global operations and how organisation
adopt to operating in global market
Globalisation is related with expansion of the beguines and technologies in all over the
world. Sustainable globalisation is related with fundamental transformation of how people work
in global world that is in 21st century. For example- company is spanning in 30 countries so it
needs to adopt updated technologies for being sustainable in the global market.
Stakeholders concept: since stakeholders are one that is connected with organization
internally and externally. There are various stakeholders present within an organization like
customer’s employees, board of director, mangers, government and suppliers etc. then customers
will be purchasing product and services (Kumar, Sureka, and Goyal, 2021). If managers trained
employees well then they will lose theories confidence at time of promotion. This makes
manager trained losing confidence making promotion done with clients. For example, if weather
changes then its could be effective for a organization. It changes customer's right with other
health and safety rights for selecting organizations managers.
Applying Hofstede’s Dimensions of Culture theory
Hofstede's Cultural Dimensions of cultural
The structure of an organization makes culture developed in major sense which is
important for an organization. This makes applicability of hofstede dimensions of culture for
delivering of practices. It helps in delivering of best practices within an organization helping in
expanding business. Through this model best practices of business is developed making its
expansion possible. It makes organization like SASOL limited take assistance over strategic
management which is implied within the model and discussed as follows:
Power distance index: The power index has been determined with those within which
inequality as well as power factors are deal with. Organizations within marketplace should be
able to follow its basic plan which is effective for developing of power distinct index.
Individualism vs. collectivism: This is major responsibility of business which is focused
over individual employees. It leads upon making responsibility taken in relation to employees by
focusing upon business working. Saso limited should be focused over individual perspectives
which makes diverse workforce created more effectively.

Uncertainty avoidance index: This is used for determining of uncertainty which can occur
over various aspects present within an organization. It is describe that makes unknown situation
over events deal by an organization in effective way. SASOL limited organization has been
lowering uncertainty for avoiding any kind of risk which can hamper working of an organization.
It makes strict law and regulations formed within an organization for its smooth running.
Masculinity vs. femininity: The respective dimension which is defined over creating which
makes achievement, attitude, equality and behaviour. As masculinity which has been measured
upon developing fierceness and deficiency (Morrison, 2020). This is based upon other hand,
feminity related over making general roles, nurturing which makes concerns with quality of life.
Long term vs. short term orientation: This is based upon making horizon that has been used
by an organization over implementing over planning strategy. SASOL Limited organization that
has been implied upon making focus develop upon short as well as long term objectives which
makes organizations goals and objectives achieved. This makes quick results provided and long
term orientation focused upon making growth and development.
An evaluation of ethical and sustainable factors that the organisation has to consider in a global
market
The business sustainability is a major approach which helps an organisation to deliver
best practices related to conservation of environment. It is the main role of a business to select
best sustainable factors that are effective in making it more reliable and flexible. The SASOL
company should mainly focus on development of a professionalism based approach in analysing
all major sustainable factors at the marketplace (Mutalimov, Kovaleva, and Stepanova, 2020). It
is one of the major roles of top level management and strategic management to deliver best
actions related to business development. The main strategic factors that are to be considered by
SASOL company are mentioned below:
 Green functions- The SASOL company must adopt green functions that are helpful in
making it more sustainable. It is the main responsibility of human resource management
of a company to adopt green practices in order to develop focused marketing approach.
The main role of a business is to consider key factors which impact on its green
operations in a specified period of time.
 Follow sustainable development goals- The United Nations, has formulated major
sustainable development goals for functioning of business. It is moral and ethical duty of

management of SASOL to implement all major sustainable development goals with key
focus on all aspects in order to lead the sustainable environment.
 Training and development- SASOL company must provide appropriate training and
development to employees in order to increase its competition based approach (Varshney,
2020). The training and development needs of the company should be identified and then
employees must be trained according to the contemporary business environment.
Critical evaluation of strategic decision making in relation to risk and diversification in a global
context
The strategic decision making is a key approach which helps the business entity to
develop focused operations at the marketplace. It is essential for SASOL company to take
strategic decision making related actions in order to minimise risk associated with the operations.
The companies hires expert and trained employees in their decision making department in order
to increase chances of success. The risk management on the other side is also major part of
business which helps in eliminating hurdles and obstacles at the marketplace. The SASOL
company is suggested to choose most appropriate leadership style in order to take major
decisions of the organisation (Nam, and Bao Tram, 2021). The selection of democratic
leadership style is most appropriate leadership style is best for decision making. The democratic
leadership style is helpful in taking decisions by increasing participation of employees and its
also increases employee engagement. This approach is helpful in making an organisation more
competent by development of fruitful decision making. The key functions of a business are to be
separated according to priority in order to develop best decisions related to international
marketplace.
Evaluation of the range of strategic global expansion routes
The companies which are performing operations in the global marketplace should analyse
all the strategic routes that are available at the marketplace. In the recent times, it is the key duty
of management of a company to focus on increasing key approach related to expansion routes for
expanding business operations (Rendtorff, 2017). The main expansion routes available to
SASOL in the global marketplace are mentioned below:
 Licensing- It is referred to the system via which commercial enterprise carry out
different business operations in different countries via gaining the licence of present
organisation. Licensing involves special type of techniques like patent, exchange mark

and manufacturing techniques (Wei, Thurasamy, and Popa, 2018). There is particular
quantity of price is paid through the licensee that can pay for the usage of the nicely for
specific duration. Businesses used licensing for the cause of increasing commercial
enterprise operations and practical in different international locations because it calls for
low funding in addition to presents better go back to commercial enterprise. Licensee
handles advertising and marketing and production system in overseas market, which will
ease functioning of SASOL.
 Exporting- It is taken into consideration because it is the appropriate manner to enlarge
enterprise operations in global marketplace place. Exporting consist direct promoting
organisational services and products in different countries. It decreases loss due to the
fact company produce merchandise in domestic states and promote them to some other
places with the goal of incomes profits (Ronen, and Shenkar, 2017). Higher
transportation price is hard point of this technique that improves ordinary price of
enterprise and influences profitability. In exporting diverse individuals are covered like
importer, government, transporter and others
 Foreign direct investment-Through this direction of growth, enterprise at once spend
money on overseas marketplace and advantage aggressive advantages. It calls for better
capital for putting premise, imposing technology, professional group of workers
contributors to carry out operations in green manner. This direction of growth is
associated with organising new mission of a company at the worldwide level.

CONCLUSION
From the above analysis it can be concluded that globalisation is one of the major factors
which has helped in development of trade across borders. It is main role of the companies to
analyse all the major perspectives and dimensions of global business environment in order to
conduct and develop successful business. This project concludes that most of the successful
companies takes assistance of external and internal environment analysis in order to lead the
competition. This report concludes that most of the successful companies in marketplace adopts
strategic and planning frameworks in order to lead the competition. This project concludes
importance of professionalism in a business to achieve key goals and objectives.

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