Global Business Environment: Key Factors, Strategic Complexities, and SASOL's McKinsey's 7 Model Application

This report analyzes the key factors driving globalization, strategic complexities associated with operating in a global environment, and SASOL's application of McKinsey's 7 model. It also discusses challenges and complexities of globalization for SASOL, including global recruiting, migration of employees, export fees, and tariffs.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
PART A...........................................................................................................................................4
Analyse the key factors which drive globalisation.................................................................4
Determine the strategic complexities associated with operating in a global environment.....7
Challenges and complexities globalisation brings to an organisation such as SASOL.........8
PART B............................................................................................................................................8
The application of McKinsey's 7 model discusses the governance, structure and culture of the
company SASOL....................................................................................................................8
The effect of global functioning and way which is adopted by the company for working
globally with the help of these elements................................................................................9
Hofstede’s Dimensions of Culture for evaluating the influencing culture...........................10
Sustainable and ethical factors valued by the company globally.........................................10
Strategic decision making with the reference to risk and diversification globally...............10
Describe the range of strategic global expansion routes used by the company...................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The global business environment generally involves the ways in which a company can
effectively trade across countries. The organization can reflect to make an influence of utilization
of the resources and their capabilities for functioning in the homely environment of an
organization. the report is generally based over SASOL company that can give a description
upon McKinsey’s 7 model, the pathway in which it can make influence on the global business
functioning’s, the way through which a company can acquire with the operations also (Mina,
2020). In addition to this, there is also a discussion about a Hofstede’s dimension of ethical,
cultural as well as a sustainable element for the global markets, the effective strategies can make
effective decisions with having risks and the modification more universally as well as can
measure the range of strategic international expansion that can enrooted for the organization
more efficiently.
MAIN BODY
PART A
Analyse the key factors which drive globalisation.
PESTLE analysis of SASOL is a strategic tool which is used to analyse the macro-
environment of the company. PESTLE generally stands for Political, Economic, Social,
Technological, Legal and environmental factors that can effectively impact over the macro-
environment of the organization such as SASOL. In this, the approach can provide improved
information about the functional challenges that the SASOL will face in the recent macro-
environment as compared with competitive forces. The analysis can specifically help the
company to make some strategic decisions perfectly, by simply keeping in view with some of the
external trends and the elements of an external environment. In addition to this, the analysis of
the company should be taken into account the crucial aspects of the extrinsic environment that
can impact the industry also. Furthermore, the discussion about the elements are provided below:
Political elements: The political elements can play a crucial role in determining the
elements that can make impact over the company like as SASOL on its long-term profitability
among several market or across the country as well. In context with SASOL, the political
elements can exert a great impact over its long-term sustainability as well as the profitability of
the chemical start-up over an expansion spree. In this, the key success within the dynamic

international business environment is generally to diversify the systematic risks. In addition to
this, the political environment of the country specifically comprises multiple components. The
SASOL a chemical Start-up over an expansion Spree generally required to consider the
following political elements during the strategic planning procedure. In addition to this, the
specific political factors which can make impact over SASOL are as mentioned below:
 Political stability.
 Modifications within policies.
 Protests or pressure groups and governance system.
 Corruption and bureaucracy. Taxation, restrictions in trade and an intellectual property protection.
Economic elements: For the organization, it is essential to understand the economic elements
like interest rate or foreign exchange, inflation and saving rates, labor market conditions and
many more as they can identify the entire economic conditions of the country. In addition to this,
having a detailed knowledge of the economic environment which can aid SASOL: The chemical
to estimate the growth trajectory of the organization. Furthermore, there are some of the
economic elements which are required to be considered by the provided organization in order to
make effective informed decisions and are as mentioned below:
 Business or economic cycle stage.
 Interest/Inflation/ exchange rates/ employment.
 Economic structure.
 Financial markets efficiency.
In this, the economic development of the country can directly impact the performance of the
organization. In this, growing economies can offer broad ranging growth opportunities to the
organization (SASOL). Simultaneously, it is essential for the organization to understand the
industry lifecycle stages as well.
Social elements: In this, the alterations within the demographic patterns such as aging
population, migration trends as well as the socio-economic variables generally have a paramount
necessity for the international business company such as SASOL. In this, analysing the
demographic characteristics can aid the organization in selecting the accurate market segments
with great potential. The business and the specific marketing strategies are mainly impacted by
the migration. It is quite essential for the organization to effectively understand the general

attitude of the people towards the migration as it can impact the ability of an organization to
bring an international manager to host the country. In addition to this, there are also some other
social elements that can influence SASOL: The chemical Start-up on an Expansion spree and are
as mentioned below:
 Power distance and Equality.
 Gender Roles.
 Societal Norms and Class dispersion.
 Spending patterns and behaviours.
 Online shopping. Demographic trends.
Technological Elements: In this, the technological element is generally the fourth factor of
PESTLE analysis. A progressive technological improvement and technological diffusion within
the globe specifically have enhanced the necessity of understanding the technological elements
during the strategic decision making procedures. In addition to this, having a detailed
explanation of the technological environment can effectively aid the SASOL: The chemical
Start-up on an Expansion Spree can capture the technological trends in order to attain the various
business benefits like enhancing the profitability, boosting the innovation procedures and
improving the operational efficiencies. Furthermore, there are various technological elements
which can impact the business performance of the organization (SASOL: The chemical Start-up)
and are as mentioned below:
 Technological innovation and development levels.
 Social media marketing.
 Research and development on the technology and influence on the cost structure/value
chain. Shortened product life cycle.
Legal element: In this, Legal is mainly the sixth factor within the PESTLE analysis. And,
SASOL organization cannot able to enter a new market without learning in depth legal
environment as well as the regulatory structure of the new customer market. In this, a careful
evaluation of the specific legal aspects is mainly needed to ignore getting into some critical
trouble. In this, an ignorance in such respect can specifically cause an undesired condition for the
organization (SASOL) like low the modest benefits as an outcome of a logical property rights

violation as well as the harmed organizational image due to the violation of worker’s protection
standards. In addition to this, the legal elements which can impact SASOL: The chemical Start-
up on an Expansion Spree are as mentioned below:
 Consumer protection laws.
 Workers protection laws. Intellectual property legislations.
Environmental elements: In this, the enhancing environmental consciousness as well as
altering the climatic conditions generally made environmental analysis is an essential part of the
PESTLE analysis. the specific environmental standards, legislations and regulations can vary
within various markets. The international presence of organization generally need the company
to consider these differences to remove undesired conditions more carefully. In addition to this,
the environmental elements which can influence the SASOL are as mentioned below:
 Renewable technologies.
 Recycling and waste management.
 Attitude towards eco-friendly products.
 Weather and climatic conditions.
 Environmental regulations to remove depletion of resources.
Determine the strategic complexities associated with operating in a global environment.
The company is adopting technologies so unexpectedly across global, mainly working of the
corporation that had been additionally complicated prior than the recent information era become
spreading across global. Within this, the globalization has continually been improving the
methods for organization era. In this, strategy can be effectively defined as the means for
facilitating the alterations as well as attaining the long-term objectives amidst competitive
pressures, complexity as well as uncertainty. Within this, complexity can originate from
changeability, vagueness as well as challenges that are encountered by the leaders when
operating within the global environment. In addition to this, the global business environment is
global when the barriers to trade across national borders which are removed to allow an
enhanced integration of the functional processes as well as the capital markets, and the flow of
financial resources. In addition, there are the technological innovation, knowledge, culture,
labour, goods and services within various nation hence increasing an international trade and the
economic growth as well (Claar, Claar and Brian, 2018).

It can mainly suggest that organization and nation will be interdependent specifically
making the national borders virtually non-existent. Both market and competition generally have
become global and mainly facilitated by the progression in technology, enhanced transport
systems as well as the regional trade agreement within others. however, the organization and
nation are interconnected and interdependent hence consisting a very complex system. The
complex systems generally cannot be easily analysed, understood, influenced as well as the
predicted behaviour. It can make the effective strategic decisions that can make challenging due
to the turbulence and uncertainty of the system.
Challenges and complexities globalisation brings to an organisation such as SASOL.
In context with globalization, it mainly presents several difficulties for the MNC’s in terms
of capital investments and the leaderships. establishing the organization within the new country
or within developing country, it can require a substantial upfront capital. Within this, the needed
infrastructure specifically may not be among the place (Naudé, 2021). Furthermore, there are
several difficulties and the complexities that the globalization specifically brings down to an
organization such as SASOL that can consist the global recruiting, migration of employees,
export fees and incurring tariffs and so on.
PART B
The application of McKinsey's 7 model discusses the governance, structure and culture of
the company SASOL.
The McKinsey’s model is the way of analysing the organisational design of the any
company for increasing their effectiveness in business (Samarasinghe and et. al., 2019). The
McKinsey's is based on seven factor and it increase the culture and structure property of any
company and organisation. The application of seven model of McKinsey's are as follows:
Strategy: The strategy refers to the group of plan and action which is used to increase the
business plan and increase the sustainable growth of the business and company. The strategies
include the rules and regulation as well as values which decide the mission of the company. It
also includes the plan which increase the benefits of the company in comparison to the
competitors (Wasilewski, 2020). The strategy of company SASOL, chemical company is based
on the profitability and growth. The SASOL has developed their strategy to access the of

chemicalaccording to the demands of customers. The strategy includes the premium subscription
and discount on order .
Systems: The system consist of the methods and procedures which help in the establishing
the workflows and enhance the decision making. The SASOL system is very protective and it
has used the point of sale system (POS), which receive the orders automatically (Guse, 2022).
The system is very advanced and there is no need of involvement of staff in taking the order.
Structure: The structure defines the organisational development of company and their
roles and responsibilities as well as their hierarchical arrangements. In context with the SASOL,
the structure of this company is based on the theory of Fayol's principles and structure is known
as the Matrix Organisational Structure.
Shared values: The shared values are the core part of any business. This includes the
standards, principles, norms and believes which is set by the organisation for the peoples. It
consists of fundamental values of the organisation and company. The company SASOL consist
of five shared values which included the convenience, price, risk reduction, brand and
accessibility (Rani, 2019). The values of SASOL has increased the shared values for increasing
the profitability of their business.
Style: The style is the concept which is related to the management and leadership of any
organisation. The style also establishes the code of conduct in between the employees and senior
staff. The style is the way by which company represent its attitude toward the staff and
customers. The SASOL company has used the style in quality of their products and company
only focused on high quality chemicalss. The SASOL has used the machine learning algorithm
for offering the orders to riders.
Staff: The staff includes the all employees and staff working in the company. The staff
also includes the training team, recruiting team and all human resources. The staff is the group of
all members in the company which collaborate all the function in the organisation and corporates
the function of each other’s. The staff of SASOL company increase the optimal experience to
their customers in terms of best chemicals and best quality services (Malik, and Raziq, 2022).
The SASOL also focus on staff interaction for understanding their lifestyles and increasing their
coordination in team.
Skills: The skills are the most important part of the McKinsey's model because this model
is helpful in changing the business's nature. The skills are defining as the capabilities of any

company which enables the capacity of employees in achieving their goals. The skills help the
company to know their weakness and strengths by the set of their skills. The skills help the
company to increase their profitability. The SASOL company has focused on well
communication and team management skills in their employs. The company also provides the
training for increasing the soft skill of their employees.
The effect of global functioning and way which is adopted by the company for working
globally with the help of these elements.
The effect of global functioning of SASOL company is very positive as this company has
establish their image at global level by the quality of their products and best service offered by
them. The McKinsey's elements have very helpful in making the image of SASOL at global
level. The company provides the service of chemicalss and grocers riders for increasing their
business globally. The SASOL used point out sale system for ordering their services as it
decrease the time. Due to their best structural organisation and best staff service policy the
company has established the 160,000 chemicalss and grocery partners (Olkiewicz, 2018). The
SASOL has increased their technology service which is helpful in taking the 1000 orders
simultaneously. The SASOL company follow the all sustainable pathways which is beneficial for
the protection of the environments. The SASOL has invested all the resources which increase the
performance of company and provides the competitive edges. The SASOL has utilised their
efficiency in machine learning and provides the best experience to their customers, riders and
chemicalss (Howcroft, Dundon and Inversi, 2019). The support system of SASOL focus on team
decision and the team management of SASOL company has increase their performance globally.
The SASOL has unique system that is dispatch engine ' Frank' enhance their performance by
calculation and matching the orders of the customers with best combination of the riders. The
system of SASOL company provides the machine learning algorithm, historical data for
calculation and predicting the rider’s times, chemicalpreparation time etc. The SASOL company
has integrated aggregator strategies in their market place and uses the logistic model in their staff
selection and skill development of staff for increasing their working at global level. For
developing the Business at global level, the SASOL company provides the 24 hours’ effective
services to their customers. The SASOL also help their kitchen and chemicalss partners with
their analytics. The chemicals promote the SASOL through their channels and this strategy help
the company to establish their image in the minds of customers. The SASOL has also increase

the partner system with the chemical industries and through this strategy the company increase
their connection between SASOL and POS system of the chemicals for increase their business at
the global level.
Hofstede’s Dimensions of Culture for evaluating the influencing culture.
The Hofstede’s Dimension of the culture is mainly a structure for acknowledging several
cultures among various countries. In addition, the manner of doing the business as a culture
particularly make impact over the business. Within this, the dimensions of culture are generally
categorized among six cultures and are as discussed below:
Collectivism Vs individualism: It is generally represented within the pathways which
community have the responsibility and are generally their dependency on the teams. while
talking about SASOL, the workers are quite independent as well as can feature a robust self-
desire towards self-achievement (Myeni, 2018).
Power distance index: It mainly considered the methods towards degree the disparity and
electricity. The shape of organization like SASOL is mainly democratic no matter being
autocratic and there are much less versions the several electricity and the authority of juniors and
seniors.
Uncertainty Avoidance Index: It stated the premise of putting up with an uncertainty as
well as inexactness also. In this, excessive index of it can be struggling a reduced uncertainty. In
contrast with SASOL, the company can incorporate openness and that they can take their
paintings as an opportunity in context with enforcing the advanced notions so the business
organization can accept their advices.
Sustainable and ethical factors valued by the company globally.
Environmental and regulatory considerations: SASOL organization mainly requires to be
more concentrated on environmental aspects and can be chosen some significant standards for
not polluting the states or cities by simply managing their wastage while manufacturing the
goods (Gip and et. al., 2022).
Safe working conditions: SASOL organization is caring for all worker and can have create
an effective lifesaving regulations and hence can accomplish a safe working environment for
them.

Corruption and Ethics: The paying bribes is mainly avoided among some countries as
followed at higher government, that can lead to downgrading the economy of country indirectly.
SASOL organization can strictly forbid their employees to pay and accept for the bribes (Odhav,
2020).
Strategic decision making with the reference to risk and diversification globally.
The significant strategic decisions making are greatly linked with mission, imaginative and
prescient and the aims of an organization as well. In this, there are various standards across
worldwide diversification that can use the ability of an organization to get an access towards
more current assets and the generation within side the marketplace of several nations. there are
advantages from the economies of scale and reducing the producing fee through pathway of
means of arranging the assets from several unique nations to occupying the low fee labours
through pathway of means of diversifying. In addition to this, getting to know the new feedbacks
and the information through procurement and merger to grow the performance among entire
performance of the organization. However, in diversification it is generally essential for SASOL
organization to use the basic five styles of ranges that can compare the specific risks, examine
them, can shape the plan, tune the opportunities and manipulate them through pathways of means
of making selections. Therefore, the globalization has a tendency to change the effective
management styles, can lower across nation exchange the limitations and make the effective
strategic choices to put into effects them (Klerck, 2022).
Describe the range of strategic global expansion routes used by the company.
The growth across nation is from time to time that can elaborate for the organization. the
groups do not require to feature in an excessive opposition marketplace to enlarge its miles in a
greater manner to reap the enhancement in method. In this, they are specifically the five nations
growth techniques which can be followed with the help of using organization which are
protecting a mild footprint, creating some clean product methods with the help of using a trying
out the products with concentrated people, can make cronies for the choice making and to realize
the specific opportunities also (Fonseca, 2021).
CONCLUSION
From the above discussion, it is concluded that global business environment is important for
both business and countries itself. The business environment can offer an inclusive platform to

grow more clients of the service and products. It can ensure the improvement and rise of the
countries and business. The MNC’s have impact on the quality of life for several people across
countries. Within this, there are the standards assessment of demanding the specific conditions as
well as the difficulties which is to be challenged through the pathways of means of company
within its globalization. It can conclude through pathways of means of providing specific
strategies on overcoming the ones who are demanding the conditions for the agency.

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