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This report analyzes the impact of globalization on SASOL Ltd. and provides recommendations to overcome challenges. It includes a PESTLE analysis, McKinsey's 7's framework, and Hofstede's cultural model.
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GLOBAL BUSINESS
ENVIRONMENT
1
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
PART 2..........................................................................................................................................15
INTRODUCTION.........................................................................................................................15
Explaining the structure, governance culture, in a company applying McKinsey's 7's
framework.............................................................................................................................15
An evaluation of how the above discussion has been encouraged by international operations &
how the business has been influenced..................................................................................18
Applying the dimensional culture through Hofstede model.................................................18
Ethical as well as sustainable factors of business that is considering within global market 19
Evaluation of strategic decision making in relation to risk and diversification in a global
context..................................................................................................................................21
Critical evaluation of the range of strategic global expansion routes available to the
organisation..........................................................................................................................21
CONCLUSION..............................................................................................................................22
REFERENCES..............................................................................................................................23
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INTRODUCTION
The concept of globalization is being refereed as a procedure of enhancing activities
within global market which interlink the company's operations & trade with large focus on
exchange of culture. In general context the concept of globalization enhances the manufacturing
of products as well as services of business within multinational market. This develops
interdependence of global economics, culture carried out by different nations having cross-
cultural boarders which deals in technology, information, offerings, people and many others
(Abugre, 2021). The present report mentions the analysis about the SASOL company which is
the fastest growing chemical and energy business organization. The company SASOL Ltd. is
operating at multinational level such as in Gabon, UK, New York and Australia with its home
country in UK. The report includes a PESTLE analysis with a mixture of various forces that
drives globalization. Further, it also includes an important impact of digital technology upon
globalization as well as its challenges which gives rise to globalization within the company
SASOL. Lastly, the report coves a demonstration of certain recommendations which are helpful
for the challenges to overcome from it in order to have effective as well as profitable results that
a business can undergo.
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TASK 1
The present report mentions the analysis about the SASOL company which is the fastest growing
chemical and energy business organization. The company SASOL Ltd. is operating at
multinational level such as in Gabon, UK, New York and Australia with its home country in
UK. The report includes a PESTLE analysis with a mixture of various forces that drives
globalization. Further, it also includes an important impact of digital technology upon
globalization as well as its challenges which gives rise to globalization within the company
SASOL. Lastly, the report coves a demonstration of certain recommendations which are
helpful for the challenges to overcome from it in order to have effective as well as profitable
results that a business can undergo (Abugre, 2021). .
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Political factor:
In context to the government of UK which is structured with high stability as well as less
taxation rate that creates a favourable impact upon the international operations of the company
SASOL. Hence, the company manager requires to pay his focus upon the regulation of
government in order to perform their operations with full effectiveness at global level and
undergo long term sustainability at multinational level (Arefin and Rahman, 2020).
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Economical factor:
The organization is operating its business at multi-national level & the business majorly operates
in a country which is strongly economized and assists in developing their profitability with a
combination of visibility in multinational market (Beckmann and Schaltegger, 2021).
Social Factor
This allows SASOL Ltd. to provide those services and products which are framed on the basis of
huge impact of global business upon company (Bose and Pal, 2020).
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Technological factor
In context to SASOL Ltd., the company is operating with an advanced form of technology in
order to function their business at international level with an aim of earning higher profits which
the business can enjoy.
Legal factor:
with reference to SASOL Ltd., the managers focuses upon the equity health and law, safety and
security law for all the employees of company so that each personnel gets equal opportunity with
respect to their remunerations, and other benefits with same level. The organization follows
proper terms and conditions of its every business in which they deals with their product and
services that ultimately assists business in strengthening their international presence (ChoKim
and Jeong, 2021).
Environmental factor:
The aim of this factor is to allow companies to work with full respect to environment that is
operating their business by not harming the environment. Hence, for the SASOL Ltd., the
company follows all the environmental laws such as pollution and water regulation so that this
does not harm the society as well as environment at whole. This also assists renewable energy
that encourages company to operate their activities at international level (Czychon, 2020).
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The concept of globalization is categorized as the major source for international business along
with a tool to enhance company's profits with higher earnings in global market. With respect to
SASOL Ltd. there is a presence of various driving factors that are essential for the process of
globalization which are mentioned below:
Cost
Here, in this aspect the manager of SASOL Ltd. Focuses upon the cost advantages and operates
in such country where they can save large cost upon their operations and ease to buy required
material and labour with a security of long term sustainability in market. In SASOL Ltd. Pays
emphasis upon bulk shipping which assists in cost maintenance as well as sustaining the level of
business which ultimately enhances the organizational proficiency (Dan and Goia, 2020).
Market
With context to SASOL Ltd. the manager is competent to gain huge amount of share within
market that assists for the long term survival in multinational market. Hence, it is extremely
important for the company to pay its high focus upon identification of employees requirement
and other compulsory demands so to fulfil customers expectations with high level of satisfaction
and best value. This is done with an aim of acquiring higher profits as well as sustainable results
within SASOL Ltd. at multinational market (Dinçer, Yüksel and Adalı, 2019).
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Environment
With respect to SASOL Ltd. The manager is required to pay its emphasis upon the development
of strategies as well as policies which assists in sustainability of business at competitive level
and maintains the leaders for adapting change to the fluctuating environment (Falcão, Ramalho
and Nobre, 2020).
Competition
With context to SASOL Ltd. the company is experiencing high level of competition due to its
multinational operation of business.
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With the huge indulgence of digital technology bonding among company's employees is raising
along with a development in employees understanding that assists them in work from home with
effectiveness in contingency situations such as present Coronavirus. Hence, the impact of digital
technology encourages the organizational economies of scale which further develops
organizational market size. With the happening of advancement in technology both the parties
such as seller and the buyer effectively develops the transactions in a specific time period as well
as required place. Through the effective utilization of digital technology businesses such as
SASOL Ltd. attains advantage with respect to software's or programming tools that assists
company in growing its business to its heights. Hence, it is on the other hand useful to develop
innovative thoughts which supports business in enhancing its operations at international level.
After analysing the above discussion, it is being analysed that there are huge range of
components that assists business in encouraging the functions of business. In context to SASOL
Ltd., it is extremely important to analyse the market environment of a nation so that the business
can be functioned smoothly in global market. Through the presence of globalization within
industry the businesses are capable of attaining long term sustainability as well as high
advantages in different nations. Here the factor of environment is extremely beneficial in
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formulating the strategies as well as policies in order to flourish the organizational units
efficiently & effectively (Garg, 2019).
The concept of globalization assists organizational companies to perform their functions in
effective way & it also assists in formulation of various strategies in fruitful manner. Through
recalling of the information it is analysed that there is a presence of different form of challenges
as well as complexities they faced within company during the course of globalization. With
respect to SASOL Ltd. the company faces various challenges along with some complexities
which is being bought by globalization. These are mentioned below:
Loss of cultural identification
Therefore, understanding the culture of different countries assists in achieving the targets
effectively as well as proficiently. In this way the challenge is being faced by the company
related to the values, ethical considerations and beliefs of various cultural audience, due to which
there is a huge unfavourable impact upon the workings of business. The aspect of cultural
diversity is sound but due to which the staff is loosing their capabilities as well as distinctive &
respective traits (Gupta and Minai, 2019).
Entry fees:
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Hence, the organization SASOL Ltd. pays its emphasis upon development of global operations
by developing latest outlets in different nations for attaining higher beneficial results. During this
process, the organization undergo challenge in paying the required fees which costs huge & also
affects the operational cost of company (Jabłoński and Jabłoński, 2020).
Therefore, with reference to SASOL Ltd., the managers are required to emphasis upon the
evaluation as well as recognition of market in order to minimize the impact of challenge related
to the globalization within market of such organisation (Lewellyn and Bao, 2021).
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It is highly essential to develop such strategies along with policies within effective and
achievable way. Here, a manger form SASOL Ltd. Is required to respect and honour the culture
of all the operating countries during the implementation of their plans or operations in order to
have smooth functioning of their activities along with maintaining long term sustainability within
it. In such respect the business could recruit the local candidates in a form of company's
employees from all the operating regions they are operating their businesses or planning to have
an expansion of their company at global level. This would enhance the demand as well as
requirement of a country with a combination of firms' sustainability within competitive world.
Through paying emphasis upon the recommendations the company SASOL Ltd. can operate
with their business at ease and could generate handsome profits out of it in effective manner at
global level.
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The report assists in knowing the various concepts that are related to the scope of globalization
like analysing the Pestle framework with reference to SASOL Ltd. in order to enhance their
global business in effective manner. Also, it depicts the distinct forces of globalization drivers
into international market with a combination of certain challenges as well as complexities which
a company gets through globalization. Lastly, this report mentions some recommendations
related to the way in order to overcome the analysed challenges for globalization so that the
company can earn more benefits along with a proficiency in a result.
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PART 2
INTRODUCTION
Globalization alludes to an interaction of mix among individuals, government and
organizations on overall nature. This term is appeared because of headway done in transportation
and correspondence innovation. The specific report depends on the main association SASOL
restricted that is a quickest developing synthetic and energy organization head office in cape
town, South Africa. The organization additionally have quality presence in a few other countries,
for example, New York, Gabon, Frankfurt, Australia alongside the UK office. (Manuel and
Shooshtari, 2021). The principle point of this business venture is to extend their business on
global market. This entire report presents the way of globalization that influences methodology
and dynamic of SASOL Ltd. in order to experience high benefits in its results which are
delighted by the company in their potential. This specific report shows a clarification of
construction, governments and culture by zeroing in on utilizing McKinsey model with the goal
that viability in dynamic is to be kept up with. Further, it analysis the international actions which
creates an impact upon company Accordingly it additionally clarifies Hofstede social model
alongside assessment of moral and maintainable components that business association should be
engaged at the hour of performing exercises at worldwide level.
Explaining the structure, governance culture, in a company applying McKinsey's 7's framework
The framework of McKinsey's 7's denotes to a tool which assists in framing the
company's workings. The major reason behind the application of McKinsey's 7's framework in
SASOL Ltd. is to show the effectiveness of business which are needed to be attained by the
company through indulgence of McKinsey's 7's model which are skill, strategy, staff, style,
structure, shared values & the system. With respect to SASOL Ltd. the model is applied as
under: Structure: This represents a form in which the business structure is well organized. In
context to SASOL Ltd. It is extremely important for the company's managers to pay their
emphasis upon maintaining the company's structure with an aim to maintain good
bonding as well as responsibility of accountability among the organizational employees
in effective manner. This would assist company in having better decisions in respect to its
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growth and long term survival within market at international level efficiently and
effectively (Molyneux, 2021). Strategy: This element represents the well planned strategy of a business plans which
assists the company in effective formulation of plans that can be easily achieved within a
competitive market creating its advantage for the success of an organisation at global
level. In context to SASOL Ltd., the manager is required to pay its focus upon
development of flexible as well as friendly work culture within its business so that the
company's staff are highly satisfied with their jobs and environment. This would help
company in enhancing their competitive advantage with high level of sustainability due
to that the firm would be able to attain its target mission or goals according to the
prescribed vision of a company (Pant, Virdi and Chaubey, 2020).
System: This related factor of framework shows the company's infrastructure as well as
its technical things that assists in maintaining proper chain of workflow while making
decisions. In respect to SASOL Ltd., the business pays its high emphasis upon utilization
of up-dated technology in order to work at global level with full effectiveness. This
would assist in bringing beneficial strategic decisions for the sustainability of long term. Skills: Such component and capability of business which enables staff to obtain their set
targets in effective manner. With respect to SASOL Ltd., the organization follows each
rule as well as regulation laid by the government which are based upon the welfare of
company's workforce and assisting in satisfying the staff along with encouraging them to
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McKinsey 7's Framework
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attain such skills which helps them to attain their specific objective. This would support
company in achieving beneficial outcomes for the company's success as well as long term
sustainability (Rossidis, Belias and Papailias, 2020). Staff: This element of framework comprises of organizational decisions related to
recruitment, training as well as reward. With context to SASOL Ltd. the manager of
human resource within a business is required to pay its emphasis upon the training and
development of workforce, their compensation and remunerations, as well as various
other aspects of each operating country's employees where they are having their functions
with the efforts of human staff. This would allow them to encourage their employees as
well as generate higher profits from high productivity of such workforce. This would also
lead in long term sustainability of businesses along with a high level of retention of
employees within an organisation (Sharma, 2020). Style: With respect to this component of SASOL Ltd., the company develops a specific
code of conduct which assists in bringing appropriate decisions with effectiveness. Under
this style, the SASOL Ltd. works upon the regulation of democratic leadership style
where the employees are involved in decision making of a business with an aim of
providing an opportunity for sharing of their ideas with their managers as well as any
kind of problem with them. This assists business in having effective decisions even at
global level within an efficient as well as effective manner.
Shared Values: This comprises of company's values, vision, mission, objective and other
foundation buildings of a business which performs effectively while directing to the
company's employees in order to maintain the organizational structure or design and to
respect it. In respect to SASOL Ltd., the company is highly concerned towards its values,
vision, mission or objective which assists the management team to maintain and regulate
its unified code of conduct that eventually supports in directing organizational behaviour
as well as the attitude of employees within a company. This assists in framing of
company's decision related to the strategies and the actions of employees within their area
of operation at international level (Škudienė, Augutytė-Kvedaravičienė and Gabrielaityte,
2021).
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An evaluation of how the above discussion has been encouraged by international operations &
how the business has been influenced
The entry of various businesses into a world of international market would become
unavoidable that it is not as due to the limitations present within the local market but is also due
to the effect of globalization, the share of local marketplace would be under the pressure or threat
from global market which is much broader then regional market. There is a presence of different
entrepreneurial factors which would encourage globalization as well as directs the company
SASOL Ltd. to attempt for the development of organization. These are mentioned below: Political fluctuations: The trend of globalization would be common and socialising the
community at international level for making a trade agreement with mutual consent, that
permits company SASOL Ltd. for acquiring suitable opportunities from market which all
are significant to the company (Sungau, 2019). Technological development: This is concerned to the technological development as it
enables communication as well as computing system to enhance the work flow within an
organization as well as circulation of idea or information throughout the scope of
business. Global business climate: This is concerned with an enhancement of communication
which contributed in the procedure of globalization, but on the other hand also furnishes
required instruments to the business of SASOL Ltd. which would support to the
procedure of globalisation (Tepliuk, and et. al., 2021).
Expenses: This is concerned with respect to the concept of trade liberalization along with
an involvement of investment flow in a specific area such as increasing the cost of
development, habits of international customers as well as requirement of achieving
economies of scale within an organisation.
Applying the dimensional culture through Hofstede model
When the business would get a chance of engaging its operations into international
marketing where the advertisement effects has an influence upon the decisions of a customer
while purchasing a product or a service with the assistance of Hofstede cultural dimensions. The
impact of such dimension upon the business of SASOL Ltd. Is mentioned below:
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Power Distance: The cultural dimension comprises of a high power and low power
indexes distances involving the sound hierarchies along with a contribution of
influencing leaders. Other than this, such decisions are also developed by the company
head of SASOL Ltd. instead of depending upon team work or a discussion. Individualism versus community: The promotion could be targeted towards the people
through encouraging about the advantages of a product which is available to them as well
as the freedom along with an element of saving time, recognizing people for their
effective team work.
Masculinity and femininity: The market is having huge differentiation in masculinity
among their roles in order to evaluate the specific culture to get assured about the target
place & proper pattern of each item. Ambiguity & Tolerance: This cultural dimension is dependent upon the ambiguity
whereas the different tries to neglect it. In case of SASOL Ltd., the company is required
to identify the form of culture so to customize the marketing according to it. Orientation for long term: This involves an orientation with culture which would assist
to acquire a proper analysis which would be emphasised upon the present along with a
past. The company SASOL Ltd., is required to schedule these forms of orientation
through serving proper promotional ad well as traditional form or structure (Thrassou,
Chebbi and Uzunboylu, 2021).
Indulgence & fast gratification: It involves huge understanding of culture which would
offer value in future. The less level of indulgence within culture comprising the stick
societal rules as well as regulations. With respect to the business of SASOL Ltd. There is
a presence of low indulgence culture which may influence the benefits within a society
related to company products or services. This aspect has a utilization of how they could
be set fixed within present or future orders.
Ethical as well as sustainable factors of business that is considering within global market
Moral components in globalization alludes to an interaction wherein information, data,
merchandise, innovation and so forth are moved towards morally to frame a beneficial outcome.
This address as a more extensive idea that considered a few partners like government, local area,
representatives, provider’s clients and so forth the primary point of moral factor is to propel
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workers to turn out morally for achieve objectives and destinations in compelling way. Follow
moral calculate supports a situation inside aggressive commercial centre. Henceforth working
together morally helps in producing deals, incomes, share cost in certain way.
Reasonable factor of globalization addresses those determinants that takes business
exercises on worldwide level to achieve manageability in cut-throat commercial centre. This
upgrades benefit of organization with the goal that they would make due in the worldwide
market. It likewise helps in development and endurance of organization at the hour of merciless
rivalry.
There are a few moral and maintainable components that is received by SASOL Limited
in worldwide market that are introduced underneath: Human resource: It is one of the main consideration of maintainability and it likewise
addressed as a fundamental capacity of business undertaking. This depends on improving
and keeping up with the right and appropriate workers on right position so that objectives
are to be achieved effectively. As this division in SASOL restricted is working for
tracking down the appropriate ability who have right abilities and information to
accomplish the objectives and targets noticeably. As SASOL is working in global level
right now it is important to withstand those guidelines and guidelines that effect
organization contrarily. This upgrades the manageability of SASOL in market and
furthermore helps in taking choices on worldwide level in wonderful way. Promotion: It is one of the exceptionally mind boggling capacities through which
association makes mindfulness identified with items and administrations. In this
supervisor of SASOL Limited spotlight on done their exercises on moral way by utilizing
appropriate procedures and educating truth regarding the items and administrations that
firm proposals to their clients. In this another moral factor that director of SASOL need to
centre is to educate clients, representatives, accomplices identified with business
association statement of purpose and objectives. The fundamental point of organization is
to fulfil their clients with the goal that they would hold in aggressive market for
additional time span. They altered their showcasing choices by accepting choices on
moral way as it helps in keeping up with position in commercial centre.
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Financial Sustainability: It depends on keeping up with income for running business
procedure on smooth way in global market. Hence, many organizations raise money to
work their business on worldwide level without confronting any monetary intricacies. As
far as SASOL, finance administrator is having a duty to produce and keep up with
reserves appropriately and adequately. Consequently, it is done in moral way so
reasonable outcomes are appreciated by business by keeping up with organization
standard and quality. This aide in holding and drawing in clients on worldwide level
(Кюрегян, 2020).
By above examination it is to be basically assessed that there are a few variables of
supportability and morals which sway business in sure way and furthermore helps in acquiring
upper hand inside commercial centre. These variables are human asset, monetary and promoting
as every one of these are the elements of business and it is important to have a powerful
coordination between these offices to work viably across public line. therefore, practical as well
as moral variables are highly important for operating business at global market.
Evaluation of strategic decision making in relation to risk and diversification in a global context
Principles of leadership and process of internationalism
Leadership is the process of handling and managing different areas of operations nd activities of
the company. It is important for any organisation to manage the working in effective manner so
that there is attainment of organisational goals and objectives within time. This is seen that
internationalism is associated with the expansion of a company in different countries.
From the above data it is to be assessed that essential dynamic is exceptionally
fundamental for business endeavour as it assists in expanding business at international level due
to that the company is able to attain success. Taking key choice aides in creating hazard for
SASOL Ltd. at worldwide setting as these choices are taken by firm by inspect the outside and
inside climate and it is very unsafe to take choices at worldwide level. And yet it improves the
productivity and manageability of business in commercial centre. Risk management is important
as it helps to tackle different problems faced by company while entering into new foreign
market. There is need for developing effective strategies in order to overcome hurdles that create
hindrance in organisational operational management.
Barriers of internationalism on strategic decision making
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Harnessing local market expertise – When company enters into new market, there are several
requirements for grabbing knowledge about marketplace trends of that country. Strategic
decisions get affected in foreign markets.
Cultivating partnership in region - This is very essential for a company to develop business
international reputation within marketplace. There is need for developing prosperous and
competitive advantage within foreign market. This provides managing the partnership decisions
within a company to sustain in market.
Critical evaluation of the range of strategic global expansion routes available to the organisation
It is being evaluated that there is a presence of various range for strategic international
business expansion that are available for the company SASOL Ltd. Are mentioned below:
Licensing: This denotes to a manner in that a company offers license to the other firm by
that a company performs its actions with the name of parent company. It is represented as
a beneficial strategy that is being indented to assist the business of SASOL Ltd. in order
to flourish the operations at international level. In context to SASOL Ltd. the
organization charges some money that is royalty for providing a right to use their patent
and brand.
Exporting: This involves a procedure within which a firm supplies its items beyond the
boundaries of home country in a form of export. For SASOL Ltd. this option is highly
suitable for entering into global market. It assists in attaining the competitive advantage
in market. SASOL Ltd. Has an option to export its items to different nation and generate
higher profits as well as long term sustainability.
CONCLUSION
From the above report, it can be concluded that the business ventures are paying extreme
focus upon developing their visibility as well as sustainability, for which the company is required
to emphasis upon the concept of globalization which assists in developing networking with
different values and culture, by this the business earns huge profit as well as long term
sustainability. The present report mentions various terms that assists business to bring prompt
decisions with full effectiveness. This supports in attaining proper knowledge with respect to the
application of McKinsey's 7's model for knowing the structure, culture as well as governance
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which is found in the organization. The report also summarizes the various factors which are
associated with ethics as well as sustainability of a business which are required for smooth
functioning at international level. Lastly, the report suggests the ways of business expansion
which are available and best suitable for the business at international level.
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