Global Business Environment: Drivers, Challenges, and Impact

This presentation explores the concept of globalization, driving factors of globalization, impact of digital technology on globalization, PESTLE analysis of SASOL Limited, challenges of globalization, and strategic challenges faced by SASOL Limited. It also provides recommendations for overcoming these challenges.

HNBS 318 18 GLOBAL BUSINESS
ENVIRONMENT (1&2)
PROJECT 1

INTRODUCTION
 Global Business Environment is the international interactions out of an
organization's control that influences its business operations, decision
m
 aking on resource utilization.
 International business environment are of two types; external and
internal environment that may cause various advantages and
challenges to a business organization.
 This business report is prepared to understand the drivers and
challenges for globalisation and impact and strategic directions
 For the assessment SASOL Limited, a South Africa based energy and
chemical company is chosen that is hooping to expand into other
countries.

1.CONCEPT OF GLOBALISATION
 Globalization is the economic process of interacting and integrating
between people, organizations and governments worldwide which are
associated with social and cultural aspects.
 It is the spatial temporal processes of change constituting
fundamental transformation of concerns in an organization associated
with human activity expansions across regions and nations.
 Globalisation is the broad term that encompasses several perspectives
and global outlook of different countries combining together in terms
of economy, education, society and politics and is the growing
interdependence of nations resulting from integration of trade,
finance, people and ideas in a single global market place.

2.DRIVING FACTORS OF GLOBALIZATION
 There are many factors that have contributed to process or system of
globalization including several actions of businesses that have accelerated
this activity which are driven by new developments and changes in world
economy. Factors influencing Globalisation are as follows:
 Technological Advancements: Enhancements in telecommunications and
information technology has marked remarkable improvements in information
accessing and rising economic activities.
 Free trade Agreements: Elimination of trade barriers and restrictions
facilitates rise in growth of world trade which is promoted by international
organizations like World Trade Organization and International Monetary
Fund, MNC's and capitalists.
 High competition: Rise in domestic market competition where a business
strives to attain competitive advantage in market tends organizations to enter
global market to expand their market share by selling goods and services
internationally.

3.IMPACT OF DIGITAL TECHNOLOGY
UPON GLOBALIZATION
 Technological advancements facilitates globalization process which
compels business organizations to become global by rising their
economies of scale and creates immense transformations in organizing
production, trade of goods and services, investments and development
of new products and processes.
 Improved digital technologies reduces costs of transportation and
communication between nations and aid international sourcing of raw
materials and other inputs.
 Advancements in digital technologies has reduced the barriers of time
and place in business dealings rendering buyers and sellers make
transactions anytime at any part of the world.
 Transferable technological advancements helps to develop countries
by combining high production at fewer costs.

CONTD...
 E-commerce, E-business and E-banking are the latest
trends in conducting business that renders quick and
voluminous transactions easily through internet.
 Technological achievements and digital technology
leads to improvement and advancements of other
economic sectors and benefits consumers by rendering
updated information and assists in industrial growth by
saving energy and time resulting better productivity.

4.PESTLE ANALYSIS OF SASOL
LIMITED
 SASOL Limited implements a PESTLE analysis as a strategic tool to
investigate the external environmental factors as the organization is planning
to expand its operations and business in other countries.
 Political: Anti trust laws related to Energy and chemical Industry, political
stability, tax rates, wages legislation and interference of government in
major oil and gas industry are some factors that SASOL need to analyse
before investing in a particular global business market or nation.
 Economic: SASOL Limited should consider the government interventions
in free markets, exchange rates and stability of host country, inflation,
unemployment and economic growth rates indicators while investing in a
global market.
 Social: Demographics and skill level of population, education level,
interests, attitudes and culture of the specific market must be considered by
SASOL limited before entering a global market.

CONTD...
 Technological: SASOL Limited must analyse the recent
technological developments of competitors, impact on product
offerings and value chain structure in Energy and chemical
industry of a specific country market before making investments.
 Legal: Several laws like employment, consumer protection,
discrimination, health and safety are mandatory regulations and
enforcements that SASOL Limited need to abide while experting
into any global market environment or nation.
 Environmental: SASOL Limited Should also consider the
weather, climate changes, waste management and pollution
regulations in Energy and chemical industry of specific country
into which it is trying to enter.

5. CHALLENGES OF GLOBALIZATION
AND STRATEGIC CHALLENGES OF
SASOL LIMITED
 Globalization creates opportunities for nations and business organizations to experience
economic growth and profitability by participating in the global trade and competing against
similar countries and markets around the world which has to face several challenges for
operating businesses in such economies.
Challenges of globalisation
 Globalisation has various outcomes that can be addressed by governments, society and other
policy factors:
 Ensuring benefits of globalisation are extended to all nations that certainly not happens
automatically
 Cultural differences and regulatory issues
 Resource limitations and supply chains
 Dealing with instability as a cause of globalisation in developing countries
 Undermined labour and environmental standards has worsened gap between rich and poor within
nations

CONTD...
Strategic Challenges of SASOL Limited areas follows:
 Communication and technology: SASOL Limited is facing a problem of
centralized communication system that makes it possible to communicate
effectively on physically distanced branches as firm is trying to expand over
various nations (Challenges of Operating a Business in a Global Economy,
2018).
 Legal regulations and issues: SASOL limited being an Energy and chemical
company need to abide various laws, tax rules and regulations that are
different in various countries.
 Environmental Conservation: Increased interest of countries in conserving
environment and reversing global warming effects are a concern for SASOL
Limited which it need to comply wherever it starts its operations.

6. RECOMMENDATIONS FOR OVERCOMING
CHALLENGES
 To overcome the challenges of globalization people must be assisted in change when it
it has to as change is inevitable.
 For developed nations glottalization's challenges would be training programs and
business relocations to cities and towns that lose employers but for developing
countries it is to come up with programs to develop sustainable economies.
 Civil society organizations need to broaden their plans to deal with complex issues of
trade, investment, international financial flows and migrations.
 Governments must identify new ways to deal with business organizations and should
be precise about purpose of working with civil societies groups and rendering funds to
them.
 Political discussions between leaders of industrial nations, emerging economies
countries that risks marginalization of globalisation on maximizing benefits of world
trade and reducing its costs.