Influences of Globalisation on SASOL Governance, Structure, Culture and Functions

This report discusses the influences of globalisation on organisational governance and leadership, structure, culture and functions as well as influences of ethical and sustainable globalisation on organisational functions. The Hofstede's dimensions of culture is also applied to exhibit that how a company can be influenced and the evaluation of the strategic decision-making in context to reduce the risk of a company. The considered company is SASOL which is a giant chemical and energy company in South Africa.

Unit 18 Global Business
Environment
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Table of Contents
Part 1................................................................................................................................................3
Part 2................................................................................................................................................3
Introduction.....................................................................................................................................3
Main body .......................................................................................................................................3
Influences of globalisation on SASOL governance, structure, culture and functions............3
Factors that influences the global operations of SOSAL in the global market......................4
Application of Hofstede cultural dimensions to analyse cultural influence of organisation..5
Evaluation of ethical and sustainable factors that SASOL has to consider in global market 7
Different ways of decision making in SASOL can work effectively in global market..........8
Evaluation of the global expansion routes of SOSAL ...........................................................9
Conclusion.......................................................................................................................................9
References.......................................................................................................................................9
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Part 1
(Covered in PPT)
Part 2
Introduction
Globalisation is the procedure of interaction between the organization and governments
in the global level. The main impact of globalisation is that it decreases the manufacturing costs
which overall means that it can provide the services or goods at the less prices to the customers.
In this report, the influences of globalisation on organisational governance and leadership,
structure, culture and functions as well as influences of ethical and sustainable globalisation on
organisational functions is discussed. The Hofstede's dimensions of culture is also applied to
exhibit that how a company can be influenced and the evaluation of the strategic decision-
making in context to reduce the risk of a company. In this report, the considered company is
SASOL which is a giant chemical and energy company in South Africa(Abubakari, Z., Wang,
M. and Paa-Grant, R., 2018).
Main body
Influences of globalisation on SASOL governance, structure, culture and functions
SASOL can determine the influences of globalisation on its structure, culture and
governance by using McKinsey 7s model, which is a method that helps the employees or
managers to determine the performance of an organization. This model is majorly used to find
out that how effectiveness can an organization achieve by interacting with the 7 key elements.
These seven elements has categorized as hard and soft elements, in which there are three hard
elements that involves strategy, structure and systems. The other four soft elements are shared
values, skills, style and staff. The McKinsey’s 7s model of SASOL is discussed below: -
Structure: - It depicts the wholesome structure of an organisation and reflects the
process how the company is organized. In context with SASOL, it has arranged into four
strategic consumer facing business units, three regional operating hubs and two upstream
business units(Alvarez, S., Afuah, A. and Gibson, C., 2018).
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Strategy: - It is basically a business plan that enables an organization take an effective
action in order to achieve or fulfil the company goals and objectives. SASOL main strategy is to
deeply focus on the performance of chemicals through the portfolio on the specific areas in
which the company has an advantage of leading in the marketplace with a particular product.
Systems: - It reflects the regular activities and the process that the employees use to
complete the assigned operation or activity to them. SASOL employees uses GTL technology
which helps to convert the natural gas into a much great quality of liquid. These technology
helps the company to gain a significant profit from the natural gas.
Skills: - These are the abilities of the employees of a company that makes it able to
achieve the company's goals and objectives(Brandão, F., Breda, Z. and Costa, C., 2019). The
skills that a SASOL employee must possess are hard working, in depth knowledge about
different gases and chemicals etc. This element basically depicts the skills of employees that
play an important role in defining the success of whole company.
Style: - It depicts the behaviour and attitude of the senior employees of company that
emphasizes leadership style and how its influence on motivating the people and increases the
performance of organization. SASOL senior employees uses the LEAD sasol program to inspire
the high performance done by the employees and promote the innovations in order to make a
lively organization.
Staff: - This element involves all the human resources and talent management that is
directly or indirectly related to the decisions taken in the company regarding recruiting, training
and rewards. SASOL staff and their capabilities are taken into consideration in this element.
Shared Values: - This element defines the core values of the company and shows the
ethics of general work. SASOL all the objectives, mission and values plays an important role in
arranging all the key factors of an organization to maintain the work functions and operations
stable(Broad, R. and Turnbull, N., 2019).
Factors that influences the global operations of SOSAL in the global market
Political factors: - The extraordinary political concerns of the nations worried with
inside the worldwide enterprise both facilitate or avoid the enterprise like SOSAL. The exchange
agreements entered among the governments of nations are those which can be the maximum laid
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low with political stability, overseas exchange regulations, trade of moves of the brand new
governments, and lots of more.
Technological factors: - Technology elements are those which will increase the
financial boom of SOSAL. Hence, there are both effective and bad influences at the international
locations because of cross border organizations. In addition, it is able to threaten the life of the
neighbourhood organizations to the extent of extinction or growth their stage to international
standards(Culot, G., Orzes, G. and Sartor, M., 2019).
Social factors: - The social culture and environment has a direct effect on conducting the
international businesses. Various social factors like status, education, trends and awareness of
the people in the society enables to analyse the customers behaviour for buying the services or
goods.
Application of Hofstede cultural dimensions to analyse cultural influence of organisation
Hofstede cultural dimensions refers to the theory which is used in evaluating cultural
differences in multinational organisations and it examines how different cultures influence
operations of a company. In context to Sasol limited, it has its operations in various countries
including Germany, France, UK, Belgium, Spain, Italy, UK, Russia, Singapore and so on. The
six dimensions of Hofstede theory is discussed to analyse influence of culture on multinational
operations of the company.
Power distance index: This dimensions refers to the extent to which people in a certain
region excepts inequality as on how power is divided among people. Countries scoring high at
this dimensions prefers hierarchical models in organisation and expects that some people are
more powerful in position than others. Whereas in low power distance countries, unequal
distribution of power is not justified and hence it implies equality in job roles in corporations
where subordinates and superiors are equally treated. For instance, Russia is a country with high
PDI score of 93 implying great level of hierarchy in organisations, whereas, countries like
Germany and UK etc. scores low implying equality of status in organisations(Dinçer, H. and
Yüksel, S., 2018).
Individualism versus collectivism: The high score at this dimension implies
individualism which defines that people in such countries works in a loosely-knit framework and
hence less social implying weak interpersonal relations. In collectivism societies, people tend to
work in groups and takes responsibility for actions of others and show concern for friends,
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family and other members of a group. For instance, countries like France and UK are highly
individualist implying employees tendency of taking own's initiative. Whereas, Russia and
Singapore are collectivism societies implying high team spirits.
Masculinity versus femininity: In masculine societies scoring high, people are more
competitive, ambitious and are driven by success and high accomplishments. Whereas in
feminine societies scoring low, people are more tend to pay emphasis on quality aspects of life
such as peace of mind, modesty, cooperation etc(Haarhaus, T. and Liening, A., 2020). For
instance, United kingdom being a masculine society are driven by factors of competition at
workplace whereas Russia is a feminine society implying peace and cooperation at workplace.
Uncertainty avoidance index: It refers to the extent to which people in societies can
tolerate ambiguity and uncertainty of actions. Societies scoring high at this dimensions are
highly intolerant of uncertain events and thus maintain rigid codes and behaviour. Countries
scoring low are more relaxed and are practical and enjoys the events of life as they come. Russia
and France scoring high at this dimension implies that employees at workplace do not respond to
changes better. Whereas UK scoring low at this dimension implies that their employees and
managers are able to deal with changes while maintaining a more relaxed attitude.
Long term versus short term orientation: Countries scoring high at this dimensions are
more pragmatic and encourage change as they seek it as scope of growth and promotes them.
Whereas countries scoring low at this dimension are adhered to conventional and traditional
norms and perceive change with suspection. For instance, Poland scoring low at this dimension
implies strict rules and conventional methods used at workplace. Whereas Russia scoring high,
implies that employees and managers there follows pragmatic approaches and are practical
instead of adhering to past traditions(He, H. and Harris, L., 2020).
Indulgence versus restraint: In indulgent societies people tend to encourage fun events
and promotes individuals to follow their passion and accomplish their desires. Whereas in
societies scoring low at this dimension suppress their desires and control their impulses which
implies they are regulated by strict social norms. UK and South Africa being indulgent countries
promote their employees to enjoy their leisure time and encourage entertainment at workplace as
well. Whereas Russia and Poland scoring low at this dimension shows suppression of desires.
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Evaluation of ethical and sustainable factors that SASOL has to consider in global market
Environment and regulatory considerations: - SASOL has to consider environment
while they are operating their firm in the foreign country especially in the developing countries
where the principles and regulations are limited. This company has chosen to globalize its
business or conduct the business internationally to follow the most lenient standards of
environment. It must be taken into consideration by the company to avoid any problems related
to environment that moreover helps the company for the smooth functioning(Hovland, I., 2020).
Manufactured Trash Pollution: - Pollution is a giant problem in the environment and
manufactured trash pollution can be a way to reduce the pollution across the globe. SASOL must
consider this factor because it creates a lot of pollution in their firm while making gases and
chemicals. So this company must consider to manufacture the trash pollution and make a good
image in the global level about the firm.
By-products of a business: - The by-products that are produced by SASOL must not
only taken into consideration but it should become a vital onus for the business. The by-products
includes everything from carbon emissions to plastics and waste materials while gas and
chemicals. This consideration can result in making a significant profit by making a new product
with the help of by products(Lencucha, R. and Thow, A.M., 2019).
Social and cultural impacts: - The companies which are conducting their businesses in
the global level raises various social and cultural impact on the firms. SASOL must analyse the
mighty impacts in their company, which however considered as an imperative consideration for
the company. This may help the company but by deeply understanding the social norms and
cultures helps the businesses to conduct the activities without any barriers in the process. For an
example, a fast food chain restaurant based in the United States might open its branch in France,
where the food norms are much different. The fast food chain restaurant can provide a few of
their staple items but the foreign-based restaurants will profit from menu items altered to the
local culture.
Cultural marketing considerations: - The successful run of a business is not always
about changing the style or design of service and product to fit into a cultural framework of the
specific country or region. SASOL must understand that the message that works in Latin
America may not work in Europe. This is the reason the company should take a consideration of
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opening a large advertising agencies offices all over the globe(Malviya, R.K., Kant, R. and
Gupta, A.D., 2018).
Wages and benefits: - This factor is considered as the highest on the list of ethical issue
for global business models. Any company which is expanding its business in foreign country, the
main purpose of doing this to increase the presence level of its product in the worldwide.
SASOL must analyse the factors before entering into the new foreign market that in future it is
going to provide benefits to the company or not.
Safe Working Conditions: - Wages are vital point to take into the consideration but a
safe working conditions to the employees is more important. SASOL must provide a safe place
and environment to their employees for operating their activities. For an example the
occupational health safety administration in US is responsible for creating and enforcing the
safety standards. But the company which is based on the United States is mere needed to
implement these safety standards at their USA based locations, which means that a US oil
company that operates its operations in Africa and the African worker are not subject to the same
standards(Minkov, M. and Kaasa, A., 2020).
Local Community Development: - One of the major ethical problem in businesses is
the return and influences on communities in the worldwide level. SASOL must focus on the
development of local community that basically requires a actual investments in the local
infrastructure.
Different ways of decision making in SASOL can work effectively in global market
Programmed decisions and non-programmed decisions: - Programmed decisions are
usually continual in nature and these decisions mainly deal with the frequent and mundane
problems. Non programmed decisions are not routine in nature and these decisions are related to
exceptional situations. SASOL used these this type of decision making when it deal with the
common problems or some unexpected problems.
Operational and strategic decisions: - Operational decisions are taken into
consideration to tackle the present problems. SASOL prefers to use this decisions method in
order to achieve high degree of efficiency. This method helps to improve the working conditions
as well as the available resources.
Organizational and personal decisions: - Operational decisions are those which are
taken by the senior managers and these decisions can be delegated but the personal decisions are
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directly related to the manager. This decision is taken by an individual and not as a member of
the organization.
Evaluation of the global expansion routes of SOSAL
Global expansion routes can be full of challenges but these routes offers a significant
amount of profit to the company. It must be done by analysing all the positive and negative
impact of choosing the particular expansion routes. The various expansion routes used by
SOSAL are discussed below:-
 Pick the right partners: - SOSAL should conduct a research in finding out the right
partner which can help them to improvise its function and enables them to generate more
profits and revenues(Simone, C., Barile, S. and Calabrese, M., 2018).
 Adopt a clear strategy: - A right strategy helps SOSAL to define and redefine the
company existence in the shifting markets. This helps the company to make an effective
decisions and plan for the well being of the company.
 Be proactive not reactive: - Global expansion is a very crucial step taken by the
company and it is always established for a long term into an another country. SOSAL
should conduct research and must make sure that their entire team is allied with their
long term strategic plan.
Conclusion
From the above report it has been analysed that globalisation of SASOL has a major
impact on the profit and revenue of the company. The influences of globalisation on SASOL
governance, structure, culture and functions through McKinsey model as well as application of
Hofstede's cultural dimensions to analyse cultural influence of organisation is discussed. Other
than this the factors that influences the global operations of SOSAL in the global market,
evaluation of ethical and sustainable factors that SASOL has to consider in global market,
different ways of decision making in SASOL that can work effectively in global market and
evaluation of the global expansion routes of SOSAL are fully explained in the above report.
References
Books and journals
Abubakari, Z., Wang, M. and Paa-Grant, R., 2018, August. Hofstede-GLOBE inspired cultural
dimensions: a review and application in international business research and cross-
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cultural strategy. In Proceedings of the 2018 International Conference on Information
Management & Management Science (pp. 83-88).
Alvarez, S., Afuah, A. and Gibson, C., 2018. Editors’ comments: Should management theories
take uncertainty seriously?. Academy of Management Review, 43(2), pp.169-172.
Brandão, F., Breda, Z. and Costa, C., 2019. Innovation and internationalization as development
strategies for coastal tourism destinations: The role of organizational networks. Journal
of Hospitality and Tourism Management, 41, pp.219-230.
Broad, R. and Turnbull, N., 2019. From human trafficking to modern slavery: the development
of anti-trafficking policy in the UK. European Journal on Criminal Policy and
Research, 25(2), pp.119-133.
Culot, G., Orzes, G. and Sartor, M., 2019. Integration and scale in the context of Industry 4.0:
the evolving shapes of manufacturing value chains. IEEE Engineering Management
Review, 47(1), pp.45-51.
Dinçer, H. and Yüksel, S., 2018. Comparative evaluation of BSC-based new service
development competencies in Turkish banking sector with the integrated fuzzy hybrid
MCDM using content analysis. International Journal of Fuzzy Systems, 20(8), pp.2497-
2516.
Haarhaus, T. and Liening, A., 2020. Building dynamic capabilities to cope with environmental
uncertainty: The role of strategic foresight. Technological Forecasting and Social
Change, 155, p.120033.
He, H. and Harris, L., 2020. The impact of Covid-19 pandemic on corporate social responsibility
and marketing philosophy. Journal of business research, 116, pp.176-182.
Hovland, I., 2020. Knowledge management and organizational learning: An international
development perspective. In NGO Management (pp. 353-368). Routledge.
Lencucha, R. and Thow, A.M., 2019. How neoliberalism is shaping the supply of unhealthy
commodities and what this means for NCD prevention. International journal of health
policy and management, 8(9), p.514.
Malviya, R.K., Kant, R. and Gupta, A.D., 2018. Evaluation and selection of sustainable strategy
for green supply chain management implementation. Business Strategy and the
Environment, 27(4), pp.475-502.
Minkov, M. and Kaasa, A., 2020. A test of Hofstede's model of culture following his own
approach. Cross Cultural & Strategic Management.
Simone, C., Barile, S. and Calabrese, M., 2018. Managing territory and its complexity: a
decision-making model based on the viable system approach (VsA). Land use
policy, 72, pp.493-502.
Online
Compare Countries, 2022. [Online]. Available through:
<https://www.hofstede-insights.com/fi/product/compare-countries/>
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