Global Business Environment - Sasol Assignment Sample

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1) ............................................................................................................................................3
2).............................................................................................................................................4
3) ............................................................................................................................................5
4) ............................................................................................................................................5
5) ............................................................................................................................................7
6) ............................................................................................................................................7
PART 2............................................................................................................................................8
1) ............................................................................................................................................8
2) ............................................................................................................................................9
3) ..........................................................................................................................................10
4) ..........................................................................................................................................10
5) ..........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Global business environment is outlined as position in different autonomous state having
component exogenic to interior surrounding of organization causing making conclusion on
ability and usage of resources (Apăvăloaie, 2014). This help organisation to develop their firm
and activities in effectual and economic style at global level. It is very essential for structure to
enlarge business at international level in order to earn maximum gain and profits. The presented
report is supported on SASOL Limited established in 1950 at South Africa which is chemic and
fast increasing energy based organisation. This produces commercialise technologies which
includes fuels, electricity and others. It is considered as largest organisation in chemical and
energy production (Sasol Ltd (SSL), 2019). This report is divided into two parts where first
section represents driving force and situation for economic process and second represents effect
and strategic path. It also covers PESTLE, McKinsey's and other model for describing business
and its activities at global level.
PART 1
1)
Globalisation is defined as activity of integrating and fundamental interaction between
institution, group, government, companies worldwide. This has full-grown because of rise in
communicating and information application. The increasing worldwide action leads to
development of foreign culture, commerce and ideas. It is also called economical operation of
group action and physical phenomenon related with ethnical and societal view. It regard good,
application, information, economic resources of capital, services and others. There are various
other reasons which leads to increase in globalisation such as social media, commerce systems,
complex financial good and others (Globalisation, 2019). Globalisation provides various
potential benefits to both national economies and international producers in proper manner.
SASOL Limited has grown business in different market such as Canada, Australia, Gabon,
Mozambique due to rise in globalisation in order to earn maximum profits and gain in
competitive marketplace.

2)
Globalisation help SASOL Limited to expand market and increase profits and sales in
effective and efficient manner. There are different driving cause of economic process that are
mentioned below:
Technological Drivers- This driving factors has set and shaped foundation for modern
globalisation (Drivers of Globalization: Integration of Theories and Models, 2019). It can help
SASOL Limited to easily export and import goods and services in other parts of world through
modern transportation and innovation technology. With rise in globalisation different
transportation has evolved for providing goods and services. For example, the respective
organisation has to analyse market to know about change in technology so that they can adopt it
in business for achievement of goal and objectives.
Political Drivers- With increase in globalisation, rules and deregulated market of trading
has lowered tariffs and allow for foreign direct investments which can help SASOL Limited to
do their business without any restriction. Also WTO and GATT has assist for doing business
effectively and efficiently. For instance, if there is change in any rules related with chemical
industry then it should be applied by respective organisation for running their business in
effective and efficient manner.
Market Drivers- Due to saturation of market, opportunities are limited and global
expanding is way through which SASOL Limited can overcome such situation for their business.
This assist in knowing about requirement of consumers and produce accordingly for achievement
of goal and objective. In current scenario, saturation of market leads to decline in opportunities
for organisation. They have to provide high quality products and services so that they can attain
set goal and objectives.
Cost Drivers- It is the most important driving factors of globalisation that can aid
SASOL Limited to earn maximal profits and gain as price of product vary from country to
country where respective firm can take benefit of it. It also assist in building economies of scales
and high product development for users. With this factor they can increase their profits by
analysing market and know about cost of other companies and accordingly set prices for goods.
As prices may vary from one country to another due to differ in tax, interest rates and others.
Competitive Drivers- With internationalisation, there is competition in global intern
firm which force SASOL Limited to play business at global level. This can aid respective

business to grow business at global level in order to beat competition existing in industry. This is
an opportunity for SASOL Limited that helps in earning maximum profits and gains for industry.
There are large number of organisation dealing in same products which creates opportunity for
respective organisation to provide high quality goods and services.
3)
Digital technology is defined as origin for creating, discovery, communicating, analysing
and information in digital manner. It includes use of software application, programming and web
tools. This technology is used for various purpose in business in order to achieve goal and
objectives of organisation. The advancement of digital technology has facilitated globalisation
for accomplishment. This can help SASOL Limited to become global in order to increase scale
of economies and market size. With use of digital technology leads to decline cost for
transportation, communication throughout nations and help for global raw materials and input
(Impact of Technology on Globalisation, 2019). There also exists patent technology which can
help and encourage globalisation for owning patent and exploiting global industry without
competition. The digital technology can help buyer and seller of SASOL Limited to perform
business at any place and time in proper manner. As digital technology is required for all
business due to rise in globalisation in order to run enterprise and their activities effectively.
4)
PESTLE analysis is defined as instrument which is designed for analysing or monitoring
macro environment segment that has impact on business performance (Bartlett, Doz and
Hedlund, 2013). There are six components of PESTLE analysis for knowing about market and
their conditions. It is used when organisation want to expand business or start new enterprise in
market. The PESTLE analysis of SASOL Limited are described below:
Political Factors- It is defined as intervention of government at local and national level.
This includes policies, rules and regulations, system of government and others. The political
condition of each and every country is different from each other. As SASOL Limited is operating
business in different sectors of universe so it need to follow their rules and regulation for survival
and sustainability. This deals in chemical and energy manufacturing so it requires more policies
of those countries. In order to expand business in other parts of world, respective organisation
need to analyse market and their policies, regulations for sustaining in market.

Economic Factors- It includes exchange rate, labour market conditions, inflation rate,
taxation rate, interest rate and others (PESTEL / PEST Analysis of Sasol Ltd, 2019). If SASOL
Limited has high skilled workforce, then it can raise production and create global opportunities
for business. In order to enlarge business, it is very essential for respective organisation to know
about economic status of that place and buying pattern of consumers. Currently it is
manufacturing chemical and energy at South Africa where exchange rate is fluctuating which
can impact long and short term investment plan.
Social Factors- This factors includes gender roles, culture, traditions, health and safety
attitudes and others. SASOL Limited can test different concepts in order to meet gender needs by
providing high quality goods and services. The respective organisation deals in manufacturing of
chemical and energy so it need to consider health and safety of their consumers while doing
production. It need to consider the need and demand of organisation for providing them chemical
and energy in proper manner.
Technological Factors- This factors includes use of technology, research and
development. For creating business opportunities, it is very important for SASOL Limited to use
technology for manufacturing of chemical and energy at worldwide level. It is essential for them
to bring innovation in products and service in order to survive and sustain in market. With use of
such factor, respective organisation can do better and high production for their users. Therefore,
it can assist business to accomplish their goal and objectives in efficient and effectual manner.
Legal Factors- This factors plays an essential part in development of chemical
manufacturing in economy. To expand business at world-wide market, SASOL Limited should
consider data protection laws, delivery justice, copyright laws, property rights protection and
others. It is very important to follow all legal laws while manufacturing energy and chemical by
considering health and safety of people. For such industry, employment laws are very strict
which should be followed by SASOL Limited for production.
Environmental Factors- These factors are becoming critical for enterprise as there are
different rules and regulations related with environment are imposed on business while running
their operation and activities in market (Chand and Tung, 2014). This includes climate, weather,
laws related to pollution, health and safety and others. The extreme weather at South Africa can
add more cost of operations to SASOL Limited for supply chain management. For expansion of

business at other countries, respective organisation need to use renewable technology for their
production.
5)
In order to run business at global level has to face various challenges by organisation
which are described below:
Loss of Cultural Diversity- With growth in globalisation has made external culture
easier for accessing which has loss culture diversity of respective place and organisation. Here,
SASOL Limited is facing problem due to cultural diversity.
Job Mobility- The globalisation has shifted manufacturing jobs from less developed to
developing countries (Globalization Benefits and Challenges, 2019). It is difficult for low skilled
employees to find new jobs in other counties due to globalisation. This is the challenges of
globalisation which has impacted SASOL Limited employees for getting better jobs.
Partner With Globalisation Expert- If SASOL Limited work with expert partners then
it can get business advantages and grab many opportunities at international level. With help of
Professional Employer Organisation can assist respective organisation to presence in
international market.
Strategic challenges refers to a pressure which exercise conclusive influences on
organisation's future occurrence (Huhtala and et. al., 2014). This includes both internal and
external where internal are unskilled staffs, manufacturing process failure, lack of raw materials
and external are financial risk, expectation of consumers, product changes. It is very important
for SASOL Limited to examine their strategic challenges for running enterprise in competitive
market. As each and every factors need to be analysed by organisation for making effective
decisions in order to achieve goal and objectives of organisation.
6)
The recommendations provided to SASOL Limited in order to get over from challenges
discussed above. It is recommended to every organisation to follow rules and regulation
formulated by government in order to operate business at international level. It is also
recommended to hire skilled and capable employee for running business. The strategies should
be made in advance for investing in foreign markets which helps in resource utilisation and
maximum returns can be obtained.

PART 2
1)
McKinsey's model consists of seven elements that are categorised into soft and hard areas
(Cumming and Zahra, 2016). The hard includes system, structure and structure which helps
easier for making and managing business activities. This model is described below:
Strategy- This is called planning and formulation which is done by SASOL Limited for
achievement of competitive advantages and sustaining in competitive market. The respective
organisation has made strategy which can help them for achievement of goal and objectives of
business through making of vision, mission, values and others. The respective organisation
follows corporate strategy for their business where top manager guide lower manager for better
work performance.
Structure- This is defined as business units and department that are arranged in the
organisation for smooth working of different activities and operations. It is highly observable and
can be changed easily. It is necessary for SASOL Limited to have accurate organisation structure
to manage various divisions, units and departments of business. This organisation follow
divisional structure for business as it has many department and units for manufacturing.
System- This is regarded as process of organisation that represent day to day operation of
firm and determine how decision making must be made (Khilji, 2012). Here, SASOL Limited
need to have proper and manageable system in organisation for providing energy and chemical to
consumers in effective and efficient manner.
Skills- This is the abilities and capabilities of individual which help them for performing
work in company in effective and efficient manner. This element also includes competencies and
capabilities of people. When there is alternation in business environment and organisation then
various issues are occurred related with skills and capabilities of employees which need to be
reinforced with latest strategy and structure of business. Therefore, respective organisation need
to identify skills and knowledge of employees as per assigned work. It uses both hard and soft
skills such as leadership, accounting and other for better work performance.
Staff- This is regarded as significant elements of organisation which helps in knowing
about achievement of goals and objectives of business. It is important for SASOL Limited to
have look at their staff regarding work performance for achievement of results in effective and
efficient manner.

Style- This is defined as way through which company manages top management, their
communication and action taken by them. It is style of management for work performance of
organisation. SASOL Limited need to adopt proper management styles that can help them for
performing activities and operations of business for achievement of goals and objectives.
Shared Value- This means standards and norms that identify behaviour of employees
and activities of organisation. It can help organisation and their employees for following rules
and regulations of business. SASOL Limited has their own standard, norms and values that
should be followed by staff for manufacturing of chemical and energy.
Culture- SASOL Limited need to follow their cultural values and belief in business for
achieving their set outcomes in better manner (Shenkar, Luo and Chi, 2014). This reflect rules,
regulations, and culture which every operating business need to follow.
Governance- It is regarded as system, procedure, practices and rules which direct every
organisation and control their activities and functions. This helps interests of stakeholders like
suppliers, management, employers, customers. This can effect enterprise and their activities of
organisation. Therefore, this becomes necessary for business to follow governance in their
business.
2)
Hofstede's cultural dimensions is a model which is used as a cross cultural
communication. This was developed by Geert Hofstede which consists of different dimensions
of culture which are described below:
Power Distance- It means organisation provide power to employees as per their profile
or designations (Simic and Dimitrijevic, 2012.). They have right to enjoy benefits accordingly.
SASOL Limited should provide good treatments to their employees and staff for work
performance. The top management should guide lower level management to follow orders and
advices. In order to reduce power distance, equal distribution of responsibility should be made.
Individualism V/S Collectivism- When individual perform then goal and objectives
cannot be achieved. Similarly, when work is performed collectively then business can achieve
good results. Therefore, it is important for SASOL Limited to work together for better outcomes.
Uncertainty Avoidance- This is defined as culture where employees should revert on
unforeseen and unusual circumstances. Here, SASOL Limited employees has to prepare

themselves for adjustments. The top manager help business by implementing impactful strategy
in order to avoid uncertainty.
Masculinity V/S Femininity- It is defined as differences in males and females in culture
of organisation. Here, male staff dominate female by implementing different policies. The
respective organisation should not allow late setting or travelling of work for female staff. There
should not differentiation between male and female for work performance.
Long V/S Short Term Orientation- It is responsibility of respective organisation to
guide staff for both short and long term goal of business that can help to achieve sustainability
and growth of business in effective manner.
3)
The ethical and sustainable sector that SASOL Limited has to view in global market are
described below:
Insist on Integrity in Business Relationship- In order to expand business at global
market, it is essential for firm to build relationship with international companies (Voegtlin,
Patzer and Scherer, 2012). SASOL Limited also need to develop relationship with consumers,
suppliers and others for achievement of goal and objectives.
Treat Employees Fairly- It is responsibility of SASOL Limited to treat their employees
and staff fairly for effective outcomes. As it is expanding business in different parts of globe so
for that equal treatment is required. All ethical employment laws should be followed by business
for achievement of goals and objectives.
4)
It is very important for organisation to make proper decisions for international business
operations as there are various factors which impact in positive and negative manner (Yu and
Ramanathan, 2012). They are as follows:
Business Expansion- If organisation want to expand business in different locations, then
it can helps to gain high income and profits along with achievement of goals and objectives.
Decision Making- This is regarded as essential functions of organisation which provides
benefits in taking correct decisions at global market. It helps in achievement of goals and
objectives in an effective and efficient manner.
Equal Treatment- It is necessary for organisation to treat each and every member
equally in order to get positive outcome for achievement of pre-determined objectives and goals.

If organisation can allow their working force in decision making, then it can help them for
analysing opinion and views for business current strategy and provide ideas for better
performance.
Therefore, respective organisation need to do market research for knowing taste of
consumer, market trends and others for production that is needed by consumers.
5)
There are various strategic expansion routes which can be used by business in other
countries. They are as follows:
Franchising- It means to move in into global or international marketplace. It is the
expansion route where franchisor provide methods of doing business, ongoing business
procedures and others (Zhang and Huang, 2012). The franchisor gives right to franchisee to use
products and service for particular period of time. It is regarded as most easy way for expanding
business which involves different advantages and disadvantages which are described below: Advantage- This can provide benefits to SASOL Limited to use trademark and brand
name at global level which create less chances for failure of business.
 Disadvantage- This is expensive and time consuming which requires large amount of
capital for expansion of business across the globe. As each and every country has
different culture so the success of business is not sure.
Apart from above, other routes of internationalisation are as follows:
Licensing- It is defined as an agreement which gives right to licensee for using products
that is owned by licensor. The patent, branding and trademark are part of licensing agreement.
This internationalisation provide right to respective organisation to use trademark, sell items and
others. It carries some advantages and disadvantages which are as follows: Advantage- This create opportunity for SASOL Limited organisation to generate high
income and creating opportunities for new business.
 Disadvantage- The use of licensing create threats for intellectual property which leads to
rise in problem for respective organisation.
Joint Venture- It is defined as commercial enterprise where two or more organisations
join their forces for gaining strategic or tactical edge at marketplace. This can be new project or
new firm. This is mainly formed to form single or combined project together. The respective

organisation can do joint venture with other to form new one. It has both pros and cons which are
as follows: Advantages- The respective organisation can get benefits by sharing of cost, benefits,
expenses and risk among two enterprises.
 Disadvantages- When two organisation joint and form one then there is high restrictions
and less flexibility.
Acquisition- It is defined as when one company purchase other company's share for
gaining control of that firm. Here, more than 50% of shares are purchased by firm for making
decisions in business. Advantages- The respective organisation has advantage in terms of financial gain as low
share value organisation acquired by them can earn profits. This creates benefits for both
enterprises.
 Disadvantages- There is problem in integration as activities of both old and new firms
have different culture and values for their business.
After analysing different routes to internationalisation, it can be concluded that respective
organisation can adopt franchising in their business. This helps them to use products and services
of other in proper manner so that goal and objectives can be achieved.
The key barriers of internationalisation are as follows:
Lack of Finance- This is the most important barrier which is faced by many organisation
in market. In order to expand business at international level, it is very important to have
sufficient funds in order to run firm at competitive level.
Lack of Knowledge- For internationalisation, respective organisation should have good
knowledge about market, people and other so that each and every activities can be run in
effective and efficient manner.
Inadequate Market Research- While operating business at international level, it is very
important to do proper market research so that requirement of consumers can be known in an
effective and efficient manner.
CONCLUSION
From above mentioned report, it can be concluded that global business environment is
very important for enterprise to achieve goal and objectives of business which includes various
factors of world. In order to enlarge business at global level it is very crucial for business to

analyse various factors with help of PESTLE analysis. There are several challenges that are
featured through globalisation that should be minimised in order to achieve set outcomes. The
structure, culture and governance helps in managing activities and operations of business.
Therefore, each and every factors should be considered while expanding business in other
countries.

REFERENCES
Books and Journals
Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance. 15. pp.951-958.
Bartlett, C. A., Doz, Y. and Hedlund, G., 2013. Managing the Global Firm (RLE International
Business). Routledge.
Chand, M. and Tung, R. L., 2014. The aging of the world's population and its effects on global
business. Academy of Management Perspectives. 28(4). pp.409-429.
Cumming, D. J. and Zahra, S. A., 2016. International business and entrepreneurship implications
of Brexit. British Journal of Management. 27(4). pp.687-692.
Huhtala, J. P. and et. al., 2014. Market orientation, innovation capability and business
performance: Insights from the global financial crisis. Baltic Journal of Management.
9(2). pp.134-152.
Khilji, S. E., 2012. Editor's perspective: does South Asia matter? Rethinking South Asia as
relevant in international business research. South Asian Journal of Global Business
Research. 1(1). pp.8-21.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Simic, V. and Dimitrijevic, B., 2012. Production planning for vehicle recycling factories in the
EU legislative and global business environments. Resources, Conservation and
Recycling. 60. pp.78-88.
Voegtlin, C., Patzer, M. and Scherer, A. G., 2012. Responsible leadership in global business: A
new approach to leadership and its multi-level outcomes. Journal of Business Ethics.
105(1). pp.1-16.
Yu, W. and Ramanathan, R., 2012. Effects of business environment on international retail
operations: case study evidence from China. International Journal of Retail &
Distribution Management. 40(3). pp.218-234.
Zhang, A. and Huang, G. Q., 2012. Impacts of business environment changes on global
manufacturing outsourcing in China. Supply Chain Management: An International
Journal. 17(2). pp.138-151.
Online
Globalisation. 2019. [Online]. Available through:
<https://www.economicsonline.co.uk/Global_economics/Globalisation_introduction.ht
ml>.
Drivers of Globalization: Integration of Theories and Models. 2019. [Online]. Available through:
<https://www.grin.com/document/57026>.
Impact of Technology on Globalisation. 2019. [Online]. Available through:
<https://www.vskills.in/certification/blog/impact-of-technology-on-globalisation/>.
PESTEL / PEST Analysis of Sasol Ltd. 2019. [Online]. Available through:
<http://blueoceanuniversity.com/frontpage/pestelcoanalysis/21878-sasol-ltd>.
Globalization Benefits and Challenges. 2019. [Online]. Available through:
<https://velocityglobal.com/blog/globalization-benefits-and-challenges/>.
Sasol Ltd (SSL). 2019. [Online]. Available through:
<https://www.reuters.com/finance/stocks/companyProfile/SSL>.