Complexity of Strategic Challenges Faced by Organizations in a Global Environment

P2 Explain the complexity of strategic challenges faced by organisations when operating in a global
environment supported by specific examples.
Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1 - Drivers and challenges for globalisation.........................................................................1
1. Introduction to the concept of globalization.......................................................................1
M1 Critically analyses the impact on global business environment in terms of benefit and
challenges...............................................................................................................................2
D1 figure out various opportunities and challenges faced by organization at global level....2
2. Driving factors of globalization..........................................................................................2
3. Significant impact of digital technology upon globalization.............................................3
4. PEST/LE analysis of the organization................................................................................3
5. Challenges of globalization and the strategic challenges...................................................4
6. Recommendations on how to overcome these challenges.................................................5
M2 Identify strategic challenges in context of risk diversification in supply chain flow......5
PART 2 - Impact and Strategic Direction........................................................................................5
1. An explanation of the structure, culture and governance of the organization by Applying
McKinsey’s 7S model............................................................................................................5
2. Applying Hofstede's Dimensions of Culture to demonstrate how the organization has been
influenced...............................................................................................................................6
M3 Evaluate global market and its application to theories and models in the aspect of
organizational structure..........................................................................................................7
D2 Examine strategies which can be adopted by organization operating in global business
environment............................................................................................................................7
3. Evaluation of ethical and sustainable factors.....................................................................8
4. Factors have affected decision making in a global context................................................8
M4 identify key barriers while doing business internationally and recommendations..........9
5. Strategic expansion routes the organization took and analyze both advantages and
disadvantages..........................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Global business environment refers to the collaborative working of more than two
companies with one another in order to enhance their prof9itabilirt at international market place.
It includes both the internal as well as external environmental factor which influences its
operational activities in positive and negative manner (Alqahtani and Saba, 2013). SASOL
Limited is a South Africa based company which is taken into consideration for completing this
project. The company belonging energy and chemical industry. The present report explains
various key factors which drives globalisation. It also determines different kind of strategic
complexities which are faced by business organisations at the time of operating their business
activities at global environment. Furthermore, it also shows how business activities of companies
at international level affects company's culture, functions and structure. Last but not the least it
describes influence of globalisation over organisational decision making and its business
strategies.
PART 1 - Drivers and challenges for globalisation
P1 Introduction to the concept of globalization.
Globalization refers to the integration of two or more businesses through the medium of
exchange of products and services for the common motive of earning profits. It is seen as
business concept but still it is not limited to the business organization only. Concept of
globalization has developed various growth opportunities for the individuals as they are now able
to approach their desirable company working in other nation. Along with this, globalization has
also helped customers in reaching to the products and services from their native nation only.
Overall it can be said that globalization has developed standard of living of people as the with
this concept economical position of every nation is developing day by day (Black, Morrison and
Gregersen, 2013). While analyzing negative influence of the same concept it has been seen that it
creates numerous of tax policies for the companies operating at different nations. This makes it
complex for business organization to deal with high number of legal terms. As per the present
scenario, it has been seen that SASOL Limited is already operating its business activities in
Mozambique, Australia, Gabon and Canada and its superior team is also planning to expand its
business in other nations too. FDI foreign direct investment is the place when an investor
establishes foreign business operations or acquires foreign business assets in a foreign company.
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However, FDI are distinguished from portfolio investments in which an investor merely
purchases equities of foreign based companies.
International economic integration: Economic integration is an arrangement among
nations that typically includes the reduction or elimination of trade barriers and the coordination
of monetary and fiscal policies which are useful for the company as well as for the economy.
International business: International business encompasses all commercial activities
that take place to promote the transfer of goods, services, resources, people, ideas, and
technologies across national boundaries as this help in expansion and growth.
M1 Critically analyses the impact on global business environment in terms of benefit and
challenges.
Global business environment is changing rapidly so as the company have to change
accordingly in order to sustain in business. There are some challenges such as complexity in
business which create confusion among organization and for consumers. Another challenge is
legislative structure where every country have their own legal environment so company must
have proper knowledge regarding laws before launching their new product. There are some
benefits in globalization which help firm to grow instantly. One of the major benefit is expansion
in which company can operates there business beyond the boundaries and can generate revenue.
Globalisation has also allowed a important rise in the level of application used in today’s
world. Many businessperson and internationally bound firms have obtained the help of
technology to exploit new enterprise opportunities. With the assistance of globalisation the job
opportunities has been emerged and people have different opportunities for company to grow
and expand the business effectively.
D1 figure out various opportunities and challenges faced by organization at global level
Global environment is highly uncertainty which influence global change. Global forces
and trends regularly change which directly effect the business. There are some challenges which
are faced by company are growing urban population, rise of emerging market, technological
advancements and climate change. And there are several other opportunities such as untapped
market, expansion and diversification. Company can focus on providing quality product and
services which provide opportunities for SASOL to capture large market share effectively.
Hence this is also improve the brand image which help in providing better model for growth and
expansion respectively. Along with this company has to face different rules and regulation while
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