Unit-18 Global Business Environment: Analysis of SASOL's Structure, Culture, Governance, and Expansion Routes

This report analyzes the impact of globalization on SASOL's structure, culture, and governance using McKinsey's 7s model. It also evaluates the global business culture using Hofstede's framework and ethical and sustainable factors. Additionally, it assesses the strategic expansion routes available to the organization.

Unit-18 Global business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explanation of the structure, culture and governance of SASOL...............................................3
Evaluation of the global operation influence and adaptation of the organization into global
market..........................................................................................................................................5
Application of Hofstede’s Dimensions of Culture for demonstrating the organizational
influence......................................................................................................................................5
Evaluation of Ethical and sustainable factors consideration by the organization and the way it
impacts decision making in global context..................................................................................7
Assessment & Critical Evaluation of the range of strategic expansion routes available to the
organization.................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Globalisation is defined as the process by which various individuals, business and
government interconnects with the aim of performing trade and commerce related activities. The
environment that comprises all the external business environment factors of different countries is
classified as global business environment. Sasol is a multinational company dealing in a wide
range of chemical & energy products. This company is an expert in the field of technology. In
the current report structure, culture and governance of the company will be explained using the
framework named MCKinsey 7s. Operating globally impacts the culture and structure of an
organization, the report will be discussing the impact of globalisation on the structure and culture
of SASOL. The report will be demonstrating effective application of Hofstede’s cultural
dimension model. The ethical and sustainable factors that are needed to considered in decision
making process at SASOL will be covered in the report. Lastly the report will be evaluating the
strategic expansion routes for the company.
MAIN BODY
Explanation of the structure, culture and governance of SASOL
MCKinsey’s 7s Model
It is a tool that is used by organizations to analyse the organization’s design. There are
seven main elements that collectively constitute this model. Below is the explanation of these
model in context of SASOL.
HARD ELEMENTS
 Strategy – The company plans the strategy that enables it to operate continually and
grow in this element of the model. The Business model of SASOL is such that it puts
together the strategy in long term with all the rest of the elements. This enables the
company to attain its goals and make a sound relation with the customers in the long run
(Razmi, Mehrvar and Hassani, 2020). The helps in creation of the company’s vision,
mission and values.
 System – The system element is concerned with the organization’s routine functions and
the orderliness of its activities by following of ideal methods. The system is made
systematized which enables the understanding of the activities of business in the
situations that are usual as well as in the unusual events. The company benefits in the
form of having best results from the proper arrangement of activities.

 Structure – The structure element refers to the company’s organizational hierarchy
which outlines roles & responsibilities of each individual working with the organization.
The organizational structure helps in identifying the person accountable for any particular
event. SASOL is having operations hubs as one of its business unit at regional level and
also the units for customer strategy. The business structure is created in accordance to the
objective of ensuring good, effective and efficient division of employees’ duties &
responsibilities facilitating the achievement of goals. Such business units of the company
are further bifurcated on the basis of the functions performed. Hence the company’s
structure is a combination of divisional & functional forms of organizational structure.
SOFT ELEMENTS
 Style – The style element means the type of leadership style that is followed at the
SASOL. Leadership style have major impact over the decision process and human
resource of the company. The leadership style adapted by the company is
participative form of leadership. As the name suggests having this style allows the
employees to participate in process of decision – making at the company. The
employees’ satisfaction levels enhance because of this leadership form and the
company benefits by ensuring high employee retention. The another advantage to
company is having different perspectives being considered over any topic while
taking decision.
 Skills – Skills refers to the abilities and capacities of the employees of SASOL to
bring value to the company. The human resource associated with the company is
highly skilled, qualitied and capable (Odeh, 2021). Employees are always encouraged
to work coordinating with one another by the management of the company.
Synchronization in the work performed by the employees make the operations highly
efficient, increasing the potentiality of the company to achieve its set goals. The
division of employees into various departments is done on the basis of their expertise
and skills.
 Staffs – The employees working at SASOL belongs to different cultures and
backgrounds. This enables the company to entail benefits from people of different
talents. The working environment of the company is created in such a manner by the

Human Resource department that propagates trust among its employees. Company is
highly benefitted from the positive working culture.
 Shared Values – The core values of the company are transparency, honesty,
creativity and trust. Such values are shared by all the stakeholders of the company.
These values further enable effective and efficient working of the employees of the
company (Kokodey, Gnezdova and Lomachenko, 2018). The core values of company
become significant while operating in the global environment and markets for
encouraging and supporting the employees of diverse nature and in minimizing the
discriminations.
Evaluation of the global operation influence and adaptation of the organization into global
market
The organizational structure, culture and also the governance of the organizations
operating globally is different from the those operating locally. The best of the products and
services are needed to be provided by such companies into the countries they operate for
strengthening their customer and attainment of high market share. The surety of adapting to
different structure and culture by these entities is seen in the profits earning and productivity of
the companies (Morrison, 2020). The general organizational structure adopted by the
organizations operating globally is divisional structure. This is justified on the basis of the
multiple business units working for achieving the same organizational goals. The complexities in
working are reduced because of this type of organisational culture being followed. There exist
clear roles, responsibilities and accountability regarding the work to be done by each of its
employees (Hamilton and Webster, 2018). This is associated with the competitive advantage of
the company and succeeding in the global business market.
To achieve the success and high market share SASOL operates globally by following
divisional as well as the functional structure for the company. Further the participative form of
leadership and also the decentralization allows the employees to participate in the decision –
making by receiving encouragement to their ideas, views and perspectives. The particular
structure made it possible for the company to operate with efficacy in the global market and earn
higher revenues (Damarwulan and Farida, 2018). The recruiting of employees that are diverse
and making them work in coordination is made easier by the company through constant support

to the diversity by understand the different cultures. The development of trust among the
employees becomes possible as a result of such understanding.
Application of Hofstede’s Dimensions of Culture for demonstrating the organizational influence
POWER DISTANCE INDEX
This dimension of the model is used to demonstrate the powers of the society. This index
makes the company capable for developing an effective hierarchical structure taking into account
the prevailing inequality in the new market. High degree of such index for a country means that
the society of that country supports equality and no form of discrimination is tolerated by the
people. The workforce pay scale decision by the company is taken based on this index and also
the segregation of roles & responsibilities is done accordingly. Conclusively the participative
approach and the decentralised approach has created an environment of equal treatment and
participation of employees enhancing their morale and retention into the company.
INDIVIDUALISM VS COLLECTIVISM
This dimension is used to know about the culture accepted by the society of the country
in which the company decides to start operating (Litvin, 2019). There are two terms in this
dimension one is individualism meaning that the people prefer to work individually on their own
without the interference by others. And the second is collectivism meaning that the people are
more into working in teams rather than working alone. This preference of employees us needed
to be understood by the company in order to enhance the output they expect from the employees.
A situation of maintaining balance between both the elements is good for SASOL’s productivity.
MASCULINITY VS FEMININITY
As the workers of the company are both males and females, the roles are given to them
based on their capabilities and skills, experiences. SASOL developed a culture where the
femininity ideology is followed that enables company to care for its employees and treat them
equally and avoidance of egoistic and discriminating, dominating behaviour.
UNCERTAINTY AVOIDANCE INDEX
The dimension helps in analysing where the market company wants to operate is
supportive with respect to being ready to accept the unseen changes or is it resistant to adjust the
changes. A high uncertainty avoidance index implies that the people of the region are not ready
to accept changes generally or they resist any kind of change (Huang and Crotts, 2019). Other
the other low index value means that the people are ready to accept any major changes and adapt

accordingly. The policies of the company must be in accordance to the comfortability of the
workers towards adapting of changes.
LONG TERM VS SHORT TERM ORIENTATION
The dimension helps in understanding whether the operating country employees will be
motivated and driven towards making efforts for the achievement of benefits in the long run or
gets motivate to work for the short term objectives. SASOL’s strategies are formulated in such a
manner that provides for people with both the mind sets.
INDULGENCE VS RESTRAINT
This index results highlights where the people of the country in which the company
operates or wishes to operate focuses more on personal satisfaction, indulgence approach or
more on norms established by the society, restraint approach.
Evaluation of Ethical and sustainable factors consideration by the organization and the way it
impacts decision making in global context
The companies having their businesses globally must have complete awareness and take
into account the societal impact from ethical and sustainable factors. For having sustainable
growth and success in the global markets it is essential to consider the ethical nature of the
business environment (Brenner, 2018). A global company must adhere the legal and ethical
aspect of the country it operates it for ensuring its market share and long term progress. Any of
the decisions taken by the management of SASOL is after the consideration of ethical and social
factors of the concerned country. Major ethical issues existing globally are the child labour,
environment deterioration, workplace discrimination, poor employee working conditions, etc.
The strategies and policies of SASOL must consider these issues. Further the rules and
regulations of the countries must be taken into account.
Global companies including SASOL also face the barrier because different cultures of
different countries. Employees of the company are from different cultures and countries. It
creates in need to develop a culture that support the non – discriminating and inclusive working
environment. It is essential to get the maximum results from the operations by the company. The
culture that is adopted by the company is role culture.
Assessment & Critical Evaluation of the range of strategic expansion routes available to the
organization
CONCENTRATION

This strategic route is concerned with different product lines and markets. There are three
ways to adopt this, market penetration, market development and product development. The sale
of the company is expanded into the current market with current products through effective
promotion in market penetration. In market development focus is on making existing product
available into new markets and in product development existing market is provided with new
products (Moon, 2022). The plus points are specialisation, gaining competitive advantage and
low per unit cost. Down sides are low customer base and decrease in demand.
DIVERSIFICATION
It means selling new products into new markets. The risk involved is high which is taken
to obtain high returns. Plus, sides are satisfaction of changing consumer needs and full utilization
of resources. Limitations are the level of risk, lack of expertise and unacceptability by the
targeted audience.
INTEGRATION
It means merger & acquisition of two or more than two organization operating into same
industry (Zámborský, 2020). The advantages are high revenue and profit earning, increase in
customers and ultimate market share, benefits of high production, better availability of resources.
Limitations are adverse impact over the smaller businesses and rigidity.
CONCLUSION
The above report has evaluated the impact of globalization on SASOL. Analysation of
such impact has been done using the McKinsey’s 7s model. Evaluation of the global business
culture has been effectively done by applying the Hofstede Framework. Further the report has
evaluated the ethical and sustainable factors along with the assessment of strategic expansion
routes.

REFERENCES
Books and Journals
Brenner, B., 2018. Transformative sustainable business models in the light of the digital
imperative—A global business economics perspective. Sustainability, 10(12), p.4428.
Damarwulan, L. M. and Farida, N., 2018. The Role of Quality of Entrepreneurial Networking
and Responsiveness to Global Business Environment in improving the Marketing
Performance of Indonesian Exporting SMEs. Calitatea, 19(165), pp.91-97.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Huang, S. S. and Crotts, J., 2019. Relationships between Hofstede's cultural dimensions and
tourist satisfaction: A cross-country cross-sample examination. Tourism management, 72,
pp.232-241.
Kiseľáková, D. and et.al., 2019. Competitiveness and its impact on sustainability, business
environment, and human development of EU (28) countries in terms of global multi-
criteria indices. Sustainability, 11(12), p.3365.
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environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Litvin, S. W., 2019. Hofstede, cultural differences, and TripAdvisor hotel reviews. International
Journal of Tourism Research, 21(5), pp.712-717.
Moon, H. C., 2022. Global business strategy: Asian perspective. World Scientific.
Morrison, J., 2020. The Global business environment: towards sustainability?. Bloomsbury
Publishing.
Odeh, G., 2021. Implementing Mckinsey 7S Model of Organizational Diagnosis and Planned
Change, Best Western Italy Case Analysis. Journal of International Business and
Management, 11(4), pp.01-08.
Razmi, J., Mehrvar, M. and Hassani, A., 2020. An assessment model of McKinsey 7s model-
based framework for knowledge management maturity in agility promotion. Journal of
Information & Knowledge Management, 19(04), p.2050036.
Zámborský, P., 2020. A blueprint for succeeding despite uncertain global markets. Journal of
Business Strategy, 42(3), pp.168-176.
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