Global Business Environment: A Case Study of SASOL Limited

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Part 1................................................................................................................................................1
Concept of globalization.............................................................................................................1
PESTLE analysis of SASOL Limited.........................................................................................2
Key driving factors of the globalization......................................................................................3
Impacts of digital technology upon globalization.......................................................................4
Challenges and complexities globalization bring to SASOL Limited........................................5
Recommendations.......................................................................................................................6
PART 2............................................................................................................................................6
1. Introduction and purpose........................................................................................................6
2. McKinsey’s 7S model for the organisation.............................................................................7
3. Influence of global operation on structure, culture and governance and the strategies
adopted by organisation in global market...................................................................................8
4. Hofstede’s cultural dimension................................................................................................9
5. Ethical and sustainable factor which is required for firm in global market..........................10
6. Evaluation of strategic decision making in relation to risk and diversification in a global
context.......................................................................................................................................10
7. Assessment and critical evaluation of the range of strategic global expansion routes
available to the organisation......................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
Appendix........................................................................................................................................15

INTRODUCTION
Global business environment is a kind of atmosphere different independent countries that
are characterized by external various factors that impacts the company within their home
environment as well. The business environment are consistently subject towards changes and the
industries needs to cope and keep pace with the rapidly changing environment. The factors such
as global warming, enhanced population, advancement in technology, demographic changes, etc.
are considered.
This presentation will discuss the concepts with the help of choosing SASOL Limited
which is fast growing energy ad chemical company head quartered in Cape Town, South Africa.
Moreover, this study will highlight the aspects related to globalization, analysis of external
environment, key driving factors of globalization, their significance, impacts, challenges along
with recommendations to overcome from those challenges.
MAIN BODY
Part 1
Concept of globalization
The globalization is a kind of concept which refers to preparing and making effective
relationships all across the world. It has been generated with s systematic procedure which help
the firm to make appropriate interactions along with integration among people, companies and
governments of diversified locations those are driven by international trade and investment
benefits. Basically, it is a process by which people as well as goods move further easily all
across the nation. It is an economic concept which provides integration of new market trends,
trade and investment along with certain barriers to slow down the flow of products and services
among all the nations. This enables the businesses to change the ways in which nation, people
and businesses interact with each other.
The globalization also enables the SASOL Limited to get their business over diversified
locations as it is the most powerful force that affects the modern world so much that without
globalization it would be difficult for some companies to even survive within international
environment.
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PESTLE analysis of SASOL Limited
It is a strategic management tool that has been utilized by SASOL Limited in order to
make better and beneficial decisions. The company operates into diversified atmosphere where
the establishment is highly influenced by enhancing environmental activism, increasing
regulatory framework, technological changes, government decisions and so on. The factors
which highly influences the SASOL Limited are:
 Political
These are the kind of factors that are related to the level and quality of intervention of local as
well as global governments as plays a vital role in objectives of the policies. Armed conflicts,
governance system and taxation policies are the major political factors. Moreover, it has also
been evaluated that government of South Africa has come under global pressure to adhere world
trade rules related to chemical manufacturing industry. Government resource allocation along
with time scale also affects the functioning of SASOL Limited into most effectual manner.
 Economic
This involves the economic performance of countries, exchange rate, labour market conditions,
inflation rate, taxation rate, etc. are considered under this specific factor. The performance of the
company is correlated with the economic performance of the South Africa's economy. Thus,
government interventions into basic material sector greatly impacts the SASOL Limited.
Furthermore, downward pressure over customer spending, skill level of workforce, availability
of core infrastructure, increasing liberalization, etc. are considered into this section.
 Social
With the help of this factor SASOL Limited will able to better understand the ways of doing
business along with their customer preferences. The factors such as gender role, demographics
through which company cater various segments of the population, societal norms, leisure
interests such as customers of South Africa are giving higher preferences to experiential
products rather than traditional value proposition, will be considered. Apart from this, the
education level also provides leverage to expand their presence in South Africa.
 Technological
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There are various ways in which technology affects the SASOL Limited which includes
innovation into products that are being offered, access towards greater information related to the
company, advanced customer services, access of population towards the technology, rate of
technology that driven change, access to mobile phones that drive empowerment supply chain
disruption, etc. are considered for the business expansion.
 Environmental
In order to provide focus over the environmental factors that impacts the SASOL Limited safe
disposal of hazardous material, safe water treatment, climate changes, laws related to pollution,
safe waste disposal, increasing focus over sustainability, insurance policies, etc. are considered
as the major factors that impacts the company effectively.
 Legal
This factor plays a major role in the development of the chemical manufacturing sector in order
to enter into globalized market. This consists of environmental laws, business laws, data
protection laws and time taken by business cases within the court, health and safety laws,
employment laws along with anti-discrimination laws within the company.
Key driving factors of the globalization
Globalization is the only factor that increases the production of goods and services all
across the world. Majority of companies have gone beyond their national boundaries in order to
operation into diversified locations. While doing business globally, there are various factors that
derive the forces behind globalization such as:
 Cultural exchange: This is the foremost and biggest drivers of globalization as people
travel through different countries and share their cultural beliefs and values at diversified
locations. With the help of this specific procedure, the understanding regarding the
culture takes place which drives globalization.
 Improved transportation facility: With the help of improved and great transportation
facilities, the companies are easily able to transport their services and goods within
particular or stipulated time frame. Any person is able to go anywhere due to such
enhanced facility likewise, the goods can also been transported beyond national
boundaries within some days. This happens over daily basis within certain parts of the
world and this is how the business actions occur.
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 Technological changes: It is one of the major driving force as advanced electronic
commerce system has made the firms successful in each and every aspect. This enables
the traders to do business from remote places to other parts of the world.
 Low barriers to trade and investment: Few years ago, the countries are highly hostile
and unfriendly in context of foreign investment but now they highly require foreign
direct investment and show their interests towards free trade agreements specially with
EU, USA and UK. This illustrates the significance of free trade or free movements of
goods to all others parts of the world.
 Labour availability: Companies generally look for the countries which provide cheap
labour price facilities in order to save the cost incurred within the procedure. There are
various developing nations which highly able to provide cheap labour in order to run the
business activities efficiently. This provides the company managers more opportunities
for expansion and development of any specific field.
Impacts of digital technology upon globalization
Technological enhancement helps the establishments to reduces the costs of
communication as well as transportation along with provide facilities in order to facilitate global
sourcing of raw materials and other kind of inputs within the environment. The technology has
the power to make the economy to become more competitive. Especially at the time of
considering digital technology which includes e-commerce, internet, e-money, e-billing,
telecommunication devices, etc. In order to elaborate over the impacts of digital technology over
globalization:
 Helpful for effective communication without boundaries: In present scenario,
communication is one of the major reason which facilitates globalization which helps in
making communication among all the countries of the world. This can be done in either
ways.
 Assist in gathering and transferring on time informations: With the development or
enhancement in technology, the companies are able to share information from one place
to another with minimum cost on money and time.
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