Drivers and Challenges of Globalization. Impact and Strategic Direction

This report discusses the impact and strategic direction of globalization on Sasol, covering topics such as governance, culture, structure, Hofstede's dimensions of culture, ethical and sustainable factors, and strategic global expansion routes.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 2............................................................................................................................................3
Describe the governance, culture and structure for the company by the application of
McKinsey's 7S model.............................................................................................................3
The way these elements effect global functioning and the way company adopt in working
globally...................................................................................................................................4
Hofstede’s Dimensions of Culture for evaluating the influencing culture.............................5
Sustainable and ethical factors valued by the company globally...........................................6
Strategic decision making with the reference to risk and diversification globally.................7
Describe the range of strategic global expansion routes used by the company.....................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Global business environment comprises of the ways in which an organisations trade
globally. It is explained in the form of cultural, economic, legal and political variations among all
countries. This reflects to the influencing of the utilization of resources and their capabilities for
functioning in the home environment of their company (Clark, Pidduck and Tietz, 2022). This
report on Sasol gives a description on McKinsey's 7S model, the way it is influenced by global
operations, the way organisation adapt with global functioning, Hofstede's dimensions of culture,
ethical as well as sustainable factors for global market, strategic decision-making with risk and
diversification globally and analysis of range of the strategic global expansion routes for
company.

PART 1
Covered in PPT
PART 2
Describe the governance, culture and structure for the company by the application of McKinsey's
7S model
McKinsey's 7S model is applicable for evaluation of company's design which tells their
effectiveness in 7 elements that are categorized into soft and hard. The elements are given below-
 Strategy – It refers to a plan of company which is made in order to compete in the
market. It is done for analysing action plan for getting advantage more than the
competitors, it is related to an organisation's mission and vision. It is a hard element so in
context to Sasol Ltd, they don't need to compromise in cost otherwise their products can
become inferior.
 Structure – This refers to the way an organisation is forming teams, departments and the
hierarchy level. This also defines the specific person's responsibilities, tasks and relations
in a company. It is a hard element and Sasol should separate their suppliers area wise so
that the geographical factors couldn't affect them much (Gloet and Samson, 2022).
 System – This represents to the set of routine activities and method that employees
should adopt to complete their tasks. This defines an infrastructure of the organisation
that is involved in flow of work thus it is a hard element. Sasol must concentrate in cyber
security so that they could invite work from home to increase their productivity.
 Shared values – This tells us about the ethics of the company that are followed in
working of all employees which are related to the key values given in mission, vision and
objectives. It is a soft element and Sasol is much better in building values but focus on
sustainability as the investors have been concerned of environment.
 Style – This a type of leadership applied by the leader in the terms of situation faced by
the employees. It can also be known as behaviour of the top level management that forms
a code of conduct in their manner of their communication and decision making. It is a
soft element and Sasol's leaders should increase input in work offline and the for the
online workers they should handle them by dividing them into more teams.

 Staff – They are workers and all the persons who are representing a company all together
in their capabilities. It is a soft element ans as per Sasol should interact online with their
staffs for recognising their culture and being transparent according to their hierarchy
(Majewska, 2022).
 Skills – It is an ability, expertise or efficiency of a worker in a particular task given. It
can also be called as competency of an organisation which tends them to success
according to their objective. It is a soft element and Sasol should improve the staffs who
are working from home by training them.
The way these elements effect global functioning and the way company adopt in working
globally
The soft elements are somehow related to the persons working in an organisation. Sasol
can't change them easily, if the they decide to set up into a new marketplace then they need to
concentrate well on these soft elements. They are measured when they are not efficient enough
for merger and acquisition as the major possibility is to fail. This leads to failing in culture and
shared values of both companies (Mbalu and Kamau, 2022). Sasol is directing towards
interacting their staffs more on online mode for the ones who work from home so that they could
manage their culture and as many employees are leaving so early so their HR team is capable
enough to hire the new ones. The style that leaders possess is for making the workflow better.
They share their values very well so there are no changes required in that but they should use
more sustainable ways for protecting environment thus this will attract more investors.
The hard elements cover the soft elements of company and Sasol can easily change
structure and systems among them. The company should make their products more costly as well
as they should get more market shares and compete on costs. Structure of the organisation should
be in small teams to make decision-making in a timely manner. The system of the organisation
should be more focusing on relations with customer, data visualisation across the company and
web app optimization.
Hofstede’s Dimensions of Culture for evaluating the influencing culture
The theory of Hofstede’s Dimensions of Culture is a structure for knowing diversified
cultures across various nations and the manner of doing a business as the culture has an impact
on business. It is categories in six cultures that are mentioned below -

 Power Distance Index – It considers the ways to measure the inequality and power.
High power distance index is a culture that has some inequity and various powers and the
higher rank and authority are valued and low power distance index is characterised by
decentralisation, participative style and distributing power (Ott, 2022).The structure of
Sasol is democratic despite being autocratic and there are less variations among the
power and authority of seniors and juniors. They discuss directly and contribute in their
ideas.
 Collectivism vs individualism – It is represented in the manner societies have obligation
and are their dependency on teams. The word “I” reflects individualism which means the
personal objective are prioritized and the word “we” reflects to the goals and roles of
group. In context to Sasol, the workers are self reliable and have strong self goals as well
as self achievement. They consider to be independent and independent.
 Uncertainty Avoidance Index – It is referred to the basis of enduring uncertainty and
inexactness. The high index of it will be suffering low uncertainty and vice versa. The
high index are strict norms and rules and the low index are acceptance and openness.
Therefore Sasol contains openness and they take their work as an opportunity as well as
implementing innovative ideas so the company accepts their suggestions.
 Femininity vs Masculinity – It is known as the difference in tough and tender as it is
related to the society's prioritize their success behaviour in sexuality, equality and
attitude. Masculinity is known for different gender, roles, assertive and wealth improving.
Femininity is formed of fluid gender roles, nurture and quality of life. The employees of
Sasol are more masculine as they are competitive and motivated which achieve the
organisational goal.
 Short term vs long term orientation – This is known for the time period valued in
society. Long term orientation takes time and they are characterised by long term growth,
perseverance and persistence. Short term orientation doesn't take that much time and are
characterised by quick results and traditional values (Cross and Carbery, 2022). Sasol is
more into short term orientation as they collaborate with other businesses globally. As
they are concerned of the changes in external environment so they are focused toward
future achievements.

 Restraint vs Indulgence – This considers the scope for providing the desires in the
society and that depends on their control of desires and impulses. Indulgence relates to
the society's acceptance in fun and enjoyment. Restraint refers to a society that is being
regulated in some rules. The company is having an indulgent culture as their workers
have flexible time and an option for work form home which also not affects the quality of
work. The company gives them facilities like gym, movie theatre and etc.
Sustainable and ethical factors valued by the company globally
 Environmental and regulatory considerations – When the organisation is trading
internationally then it considers not to harm environment and develop the nations top the
areas in which there are less norms. Sasol needs to be more focused on the environmental
aspects and choose some standards for not polluting the cities by managing their wastage
while manufacturing goods.
 Manufactured trash pollution – The company majorly commits unethical
considerations by polluting atmosphere through the waste produced while manufacturing
goods in the industry. Sasol is somehow careful in their waste management as they care
for their society and sustainable norms.
 Safe working conditions – This is the responsibility of managers to check upon all the
employees following regulations and rules. There are different agencies which are also
accountable in the matter of creating and enforcing safety standards at workplace. Sasol
is caring for their every employees and have formed life saving rules and thus attains a
safe working environment (Davari and et. al., 2022).
 Ethics and corruption – Paying bribes is literally ignored in some countries as followed
at even higher authorities, this leads to downgrading the economy of the country
indirectly. Sasol always strictly prohibits their workers to pay and accept for bribes.
Strategic decision making with the reference to risk and diversification globally
Strategic decision making are related to the organisation's mission, vision and objectives.
There are some of the concepts on international diversification that are using the company's
abilities as well as accessing to the newer resources and technology in the market of other
countries. There are advantages from economies of scale and decreasing the manufacturing cost
by arranging the resources from other countries as well as occupying low cost labours by
diversifying. Getting to know new experiences and knowledge through merger and acquisition as

well as increasing the efficiency in the performance of the company. The international trading
also includes major risks so the decision-making are taken vitally to meet the demands for
uncertainty in future. Sasol's management always concern for the risk management principles for
making them aware of the undesired happenings in the upcoming environment to decrease risks
and the related effects (Zakrzewska and et. al., 2022).Therefore, in diversification it is necessary
for Sasol to apply the five types of stages that are evaluate risks, analyse them, form plan, track
risk and control them by making decisions. Thus globalisation tends to change the leadership
styles, decrease international trade barriers and make strategic decisions as well as implement
them.
Describe the range of strategic global expansion routes used by the company
The global expansion is sometimes problematic for firms. The companies don't want to
function in a high competition market so they expand as it is a better way to achieve growth
strategy (Vargas-Hernández and Orozco Quijano, 2022). There are five global expansion
strategies that can be adopted by the company which are holding a light footprint, acquiring a
clear product strategy by testing the product in the targeted audiences, make acquaintances for
decision making and to know about the opportunities. Other strategies involve to make profit
then invest it and repeat it again, this helps in getting market shares, partnering up also decreases
risks and at last to be proactive not reactive in planning and executing into new markets.
CONCLUSION
This report concludes hereby providing a brief introduction and purpose of global
business environment in which there are structure, culture and governance in a company with the
application of McKinsey's 7S model to Sasol, the way they are influenced by global functioning,
the way the company acquires functioning in a global market, Hofstede's dimensions of culture
of Sasol, description of ethical and sustainable factors that the company has to follow globally
and at final there is an explanation on range of strategic global expansion routes which a
company can adopt.

REFERENCES
Books and Journals
Clark, D.R., Pidduck, R.J. and Tietz, M.A., 2022. The malleability of international
entrepreneurial cognitions: a natural quasi-experimental study on voluntary and
involuntary shocks. International Journal of Entrepreneurial Behavior & Research.
Cross, C. and Carbery, R., 2022. Organisational Behaviour. Bloomsbury Publishing.
Davari, A. and et. al., 2022. The determinants of personal luxury purchase intentions in a
recessionary environment. Journal of Marketing Management, pp.1-32.
Gloet, M. and Samson, D., 2022. Knowledge and innovation management to support supply
chain innovation and sustainability practices. Information Systems Management. 39(1).
pp.3-18.

Majewska, I.A., 2022. Teaching Global Competence: Challenges and Opportunities. College
Teaching, pp.1-13.
Mbalu, P. and Kamau, C.G., 2022. Corporate Sustainability Accounting and Reporting in
Kenya. Available at SSRN 4000715.
Ott, C., 2022. Talking about cultural differences in an age of globalization and hybridization:
Between Obelix and Stephen Colbert. Missiology, p.00918296211035746.
Vargas-Hernández, J.G. and Orozco Quijano, E.P., 2022. Business Under Crisis: Strategic
Organizational Sustainability—A Contextual Transformation. In Business Under Crisis,
Volume III (pp. 19-45). Palgrave Macmillan, Cham.
Zakrzewska, M. and et. al., 2022. Enterprise agility–its meaning, managerial expectations and
barriers to implementation–a survey of three countries. Journal of Organizational
Change Management.