Global Business Environment: Challenges and Strategies for Sasol

This report discusses the challenges and complexities of globalisation for Sasol in the global business environment. It covers the driving factors of globalisation, impact of digital technology, and recommendations to overcome challenges. Also, it explains the influence of globalisation on governance, culture, and leadership of Sasol. The report includes an appropriate PESTLE analysis to illustrate the broader and global influences on Sasol, evaluation of ethical and sustainable factors, and an assessment of strategic expansion routes available to the organisation.

Unit 18 – Global
Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
An appropriate PESTLE analysis to illustrate the broader and global influences on an
organisation such as SASOL.......................................................................................................3
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
CONCLUSION ...............................................................................................................................7
PART 2 ...........................................................................................................................................8
INTRODUCTION...........................................................................................................................8
An explanation of structure, culture and governance within an organization.............................8
An evaluation of how the above has been influenced by global operations and how the...........9
organisation has adapted to operating in a global market...........................................................9
Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has..........10
been influenced. ......................................................................................................................10
An evaluation of ethical and sustainable factors that the organisation has to consider in a
global market and how this impacts on decision making in a global context. ........................11
An assessment and critical evaluation of the range of strategic expansion routes available to
the organisation.........................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The global business environment can be defined as the surroundings in various
sovereign nations, with factors exogenous to the home atmosphere of the business, attracting
decision making on resources use and capabilities. The global business environment can be
classified into the external environment and the internal surroundings (Keng, and et.,al., 2018).
The external forces includes the social , political, economic and regulatory, tax and cultural,
legal and technological environments. In order to functional effectively and efficiently,
companies operating globally in. presently, there are many multinational companies which
operates in various sections of the globe. These kinds of companies must access themselves
with the language and culture of the nation in which they are working. The report is based on
Sasol company, it is an integrated energy and chemical company which is based in sandton,
South Africa. The company was found in 1950 in Sasolburg. The company develops and
commercialised technologies, considering synthetic fuels technologies and produces various
liquid fuels, chemicals and electricity. The report will cover the analyse the key factors which
drive globalisation. Also determines the strategic complexities associated with operating in a
global. After that it will evaluate how operating in a global market influences an industry
structure culture and functions. In last it will analyse the influences of globalisation on business
decision making and strategy.
MAIN BODY
Globalization is the expansion of the company from one nation to another nation. It is
three dimensional concept. It is a phenomena and a process. The international business
environment can be stated as the environment in various sovereign nations, with various
factors. The broad range effects of globalization are complex and politically charged.
According the main technology advances, globalization advantages society as a complete,
whereas causing harm to some units. Understanding the relative values and advantages can
pave the way for relieve issues while sustaining the deep payment (Katiyar, and et.,al., 2018.).
An appropriate PESTLE analysis to illustrate the broader and global influences on an
organisation such as SASOL.
Pestle analysis is s strategic management tool that Sasol ltd leadership can use to make
developed decisions. Further discussed in below report.

 Political factors - these are the factors which is link to the intervention and nature of the
local and national governing in the business and economic environment. Government
policies and governing system plays a huge role in nature and aims of the strategies.
Sasol has to make this eventually as it will tend to modify in governance priorities of
basic materials section. There is no imminent threats to country from the disruption in
the business surroundings due to the military policies, terrorist threats and another
political instability. Sasol has experienced of managing activities in complex situations .
 Economic factors - these are the factors considers market conditions, consumers
disposable income, exchange rate and many more. The easy liquidity in the market post
the great recession of 2018 will tend to raise inflation in the country economy. All
though the consumer disposable income has remain stable the growing inequality in the
society will negatively effect on users sentiments and thus effect users spending
behaviour (,Khandelwal, and Barua, 2020)..
 social factors - these factors cannot only helps companies like company name to better
analysis the manner of performing business but also in determining the users taste and
preferences. This includes traditions, culture, demographics and gender. Sasol LTD,
has demographic on its side. It can use this trend to serve to different of the population.
The company must strive to make a local team that analysis the societal norms and
attitudes better to serve the users in country.
 Technological factors - technologies are changing rapidly. There are different ways
technological factors are impacting the sasol Ltd and chemical manufacturing in South
Africa. Certain of the technological factors are access to cell phones driving venture ,
creation in customer service and access to huge details, population access to technology
and many others. The company has to keep their eyes close on the betterment and
enhancement of user experience of creative disruption and both governing and private
players are spending resources on improving new solutions.
 Legal factors - This factor plays an important role of chemical manufacturing in any
economy . Sasol Ltd management has to consider following legal factors earlier moving
into international market biased ness towards ho,e players discrimination laws,
copyrights law and intellectual property laws and many others. The level of

environmental laws in the South Africa and what sasol needs to do to reach those laws
ans regulations.
 Environment factors - these forces illustrate varied regulation and rules for
environment safety which are executed by the governing bodies on all the companies
that are existing in the community so that they can feature their activities without
causing any harm to society. In context of Sasol, greater awareness among users have
also put society components at the centre. Users expects to adhere to not only legal
benchmarks but also to exceed them to become responsible stakeholder in the society.
An analysis of the key driving factors of globalisation.
Globalization can be classified by four factors the growing globally interconnected,
quick, discontinuous change, raised value and diversity of involvers as well as growing
complexity. It consist some factors that are listed in below -
 Cost – The factor of cost states to all expenses that reaches from nation to nation which
focus on achieving high benefits at worldwide level (Ilin, and et.,al., 2018,).. This is
which other helps in giving a greater opportunity as well as development which finally
helps in producing economies of scale at worldwide level. In this a manager is needed to
concentrate on a successful activity of its business in a nation where sasol can find
accessible customers with ease as well as essential resources which can give at low cost.
 Market : it is an another factor which an industry is pays its high focus in last few
years. This driving forces gives a a lead to regional market which serves some
opportunit for a business in respect to business expansion at worldwide level. In relation
of sasol, a manager is capable to achieve huge amount of market share which helps in
long term business sustainability at marketplace. It is highly essential for business
company to pay its high concentration on analysing the buyers as well as market needs so
that they can be able to satisfy the users needs to their best and makes profitable along
with sustainable outcomes for company in global market level (Kokodey,Gnezdova,
and Lomachenko, 2018).
 Competition : By the improvement o g globalisation within corporate world there is a
presence of complex competition among companies which operates in similar industry
has raised due to the globalisation which pressures the company to move in global
market and earn their survival there. In context of Sasol, the company faces high

competition in market as they are running their business at global level that is 12 various
nations.
 Environment : This analyses as an environmental forces within which a company
operates its business functions or perform various activities with an objective to attain
profitable results. It includes assorted forms of environmental factors which has an
influence over the concept of globalisation. In context of Sasol, a manager in
company is needed to focus on outlining effective plans as well ad policies which gives
help in having a long term sustainability at worldwide level (Leke, Chironga, nd
Desvaux, 2018).
Evaluation of the significant impact of digital technology upon globalisation.
Development in technology have considerably serves globalization. In instance
technological progress has been one of the main forces driving globalization. This helps to
become global by raising the economics of scale and the market size required to break even.
Technology development reduces costs of transpiration and communication across nations and
thereby serves global sourcing of raw material and other inputs. Technology is easily
transferable to improving countries where high tech production can be combined with low wages
.
A critical evaluation of the challenges and complexities globalisation brings to an organisation
such as SASOL.
The concept of globalisation helps company in reaching out its operations with high
effectiveness so that can be a ble to make good plans from advantages results. It is very big
platform trade. Thus, there is opportunity of high complexity within market or in business
which company can face in its its operations. In context of Sasol, there is a presence of
numerous issues and complexity that are present in globalisation. The complexities are listed
in below :
 Loss of cultural identity - Culture is a major issue which all company faces when
moving globally. In consideration of Sasol, the company when operating at global level
has an option of searching various trends in varied nations which might be complex to
analyse nation that helps in successful running of business as well as effective
functioning of business practising (Liu and Yang, 2019.).

 Entry fees : the company sasol pays its consideration on running the business via
exchanging the different export related fees as well as franchising via a collaboration of
various local and international business. Hence, sasol is focused on towards the
implementation of international development via new outlets in various nations with an
objective of adding new profits. In this, there is an opportunity that company can face
strategic challenges with the respect to pay a total in a form of entry fees to the country
in which they are working.
Recommendations on how such challenges can be overcome.
The issues can be overcome through the some suggestion which is listed in below report.
 The company should focus on primary, secondary and university education on skills that
will be required in the future. Too many younger spend lot of amount in learning skills
that were required in previous and too few are learning skills needed by future high
growth occupation.
 Governing bodies and companies required to consider tax adjustment. The most direct
manner to reduce income in similarity Is to increase government benefits as well as it
can cover reduce taxes for low income individuals (Rendtorff, 2019).
CONCLUSION
It is concluded from above report that globalisation is on important factor related to the
business as this gives a great assistance in global visibility along with that profitability.
Internationalisation can be said as a process of exchanging goods and services at global market.
Here is a great effect of external forces just as pestle in conduct of business at worldwide level.
There is a various key factors which is driven by global business at worldwide level. Also, there
are various key driving forces that tends to globalisation.

PART 2
INTRODUCTION
Globalisation states to a process of improving professional relationship with people,
companies and government at multinational platform. The current part of the report discussion
regarding the influence of internationalisation on governance, culture and leadership and
management of sasol. the section also includes an application of McKinsey along with the
handy model of culture with respect to company which can help them in having good
decisions. In last it will consider various entry modes which a business can implement at the
time of moving into international market.
An explanation of structure, culture and governance within an organization
The globalisation on the various factors of internationalisation in respect to sasol is
illustrated via an implication of McKinsey model :
 Structure - this shows a manner which a business is highly managed. In context of sasol,
it is very much crucial to pay high accent on managing the company structure so that
each workers and management holds their responsibility and roles with more
transparency.
 Strategy - this presents company strategy that is documented and prepared with the
objective of having systematic flow in business. In context of sasol, a manager is asked
to focus on the aims of achieving competing advantage that helps company in
improving good strategy along with good profit ratio.
 System – the factor presents the technical as well as infrastructure of the company which
helps in managing business workflow. In case of Sasol, company focus on the utilisation
of developed technology so to have an effective operations at global level.
 Skill - this consists ability and competences with the employees of a the permits
workforce in achieving their business aims. In case of sasol adapts all rules as well as
regulations that are listed by the staff welfare which satisfies all staff members.
 Staff - the employees in this includes hiring , training and retaining them within the
company who a re hugely talented. In case of sasol, the managers at human resource is

needed to concentrate on the staff training as well as giving them enough
compensation .
 Style - In this senior manager at sasol use to improve organisational code of conduct
that helps them in taking decisions with effective evaluation of each factors. In this sasol
directs the business activities with democratic leadership style just as all business
members is given a chance of showing their ideas linked to the business.
 Shared values – The company aims are knows as main foundation of company along with
an effective role in business activities allotments. In case of sasol, a managers is
required to improve certain vision and mission that guides or directs company workers
in enacting their duties effectively (Tasheva and Nielsen, 2020).
An evaluation of how the above has been influenced by global operations and how the
organisation has adapted to operating in a global market.
The moving of new companies into the market make the global market inevitable. This is
not due to the domestic market restrictions due to the globalisation. Because to this the share of
regional market in the international market is in the threat.
 Political charges - the culture of globalisation in the global market will unite or
socialise the various community to establish the business agreement. This produce the
different market chances for the sasol.
 Development of technology – it is completely link to the improvement of technology
within the organisation. This not only assist in raising the flow of thoughts within the
company but also assist in communicating the details across the borders of the
organizations.
 Expenses - It is the factor is not only link to the business of liberalization but also with
the flow if investment in the specific areas like rising development or required for
economies development for sale.
 International business climate - this components is completely link to expansion of
communicate channel that serves in the globalisation procedure. This also gives various
tools which serves the sasol in the globalisation process.

Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has
been influenced.
Whenever company moves into new market there are various promotional components
which influence the decision of users . With the assistance of Hofstede dimensions culture
method the effect of the factors discussed in below :
 Power distance – The culture which have high power distance have the powerful graded
along with the powerful and strong leaders. The decisions of the sasol is created only
by the senior of the company not by discussion and team work.
 individualism and community – Individual across the world can be targeted via publicity
by emphasizing how the product will give them the benefits of exemption and secure
time along with appreciated for their effectual team.
 Masculinity and trade role – market which have huge muscularity can variableness their
roles as pre the specific market culture and create assurance that right pattern is being
adapts for all goods to target the market.
 Tolerance and ambiguity – these are the culture that is completely reliable on the
endurance and expression and another can neglect this. The company sasol, determine
their various kinds of culture and customized their promotional activities as per them.
 Long term orientation – The long term orientation culture not only assist in concentrating
the traditions but also helps in analysing the link of previous. The company sasol have to
adapts the this kind of orientations of they wish accurate promotion for their traditional
structure.
 Indulgence and quick gratification – huge level of analysis the culture gives them a value
for the rest of its time and low analysis of the culture have complex social regulations
and rules.
An evaluation of ethical and sustainable factors that the organisation has to consider in a global
market and how this impacts on decision making in a global context.
The ethical forces within globalisation refers to a process in which details data, goods and
services, technology and some things are traded with morality along with the ethical form. The
word states to an understanding of what is correct and what is not in company. This indicates a
wide range which considers various stakeholders like community, governing bodies and many

others. Working with including various ethical factors company in having systematic flow of
business along with the attainments of long term sustainability particularly in global level.
The sustainable factors of internationalization denotes to just analysis that drives business
to have global level presence and achieve high competitiveness at worldwide level. This grows
accountability of company so that they will survive in the global market. Sasol considers
economies of scale, human resources along with that marketing of goods and services. This
motivates users as well influence workers to work with company (Thrassou and et.,al., 2020.).
An assessment and critical evaluation of the range of strategic expansion routes available to the
organisation.
It is evaluated that there is a presence of assorted range of worldwide expansion manners
by which sasol can be capable to create its global reach and high competitive benefits. The
ranges are listed with sasol are listed in below :
 Licensing : this states to a section within which a company gives agreement or licence
to another company to another company through which a business acts functions in the
name of company who has given a licence. This is represented as an highly effective
strategy that us indented to help sasol for expanding business at international level. The
company use to charge some amount that is in a structure of royalty for using their
name and services in various nations market.
 Exporting : this is stated as a process via a firm exports its production and services to
another indivdual in overseas market. Exporting is being categorized as one of the the
best international business range by this companies can have direct sales without
introducing of their company. In extent of sasol, the company can export these items to
another country which can expand the brand in international market (Zainudin, and
et.,al., 2019.) .

CONCLUSION
It is concluded from above report that a company must highly consider the business
growth via various organizational culture, governance as well as leadership. This assists
companies in successful attainment of business aims along with the competitive benefits at
worldwide level. The assessment has explained about the various terms that helps company in
taking effective business decision by including components at global level. This gives helps
in collect education link to the application of McKinsey model and other which helps in
understanding business at global level.

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