Global Business Environment: A Case Study of SASOL Ltd.

This report discusses the global business environment and its impact on SASOL Ltd. It covers the evaluation of structures, culture, and governance within SASOL by applying McKinsey’s 7s model, ethical and sustainable factors, and strategic expansion routes available to the organization.

Global
Business
Environment

Table of Contents
Introduction.......................................................................................................................2
MAIN BODY.......................................................................................................................................3
PART ONE COVERED IN PPT.................................................................................................3
Explanation of structures, culture and governance within SASOL by applying McKinsey’s 7s
model...........................................................................................................................................3
An evaluation of how the above has been influenced by global operations and how the
organisation has adapted to operating in a global market...........................................................5
Applying Hofstede’s Dimensions of Culture to demonstrate how SASOL has been influenced.5
An evaluation of ethical and sustainable factors that the organisation has to consider in a global
market and how this impacts on decision making in a global context........................................6
An assessment and critical evaluation of the range of strategic expansion routes available to the
organisation.................................................................................................................................7

Introduction
Global business, a term widely used today in business environment came into consideration
after globalisation started becoming a norm. Firms started their trade across boarders with multiple
countries in order to create independent economy and culture. When a company or an organisation
begins its operations in multiple countries beyond its home country it enters into International
business environment. International/Global business environment can be defined as the challenges
and opportunities faced by an organisation while commencing its operations in multiple countries in
global marketplace. To better understand global business environment, SASOL a South African
company founded in 1950, headquartered in Johannesburg has been taken into consideration.
Currently operating its energy and chemical businesses in more than 31 countries around the globe.
Further in this report, there is a brief explanation of globalisation and its influence in context to
SASOL. PESTLE framework has been taken into consideration for observation. Apart, the
challenges faced by organisations while commencing business at global level will be discussed in
this report. Recommendation on uses of effective methods while decision making in global business
market will also be shared further in this report.
MAIN BODY
PART ONE COVERED IN PPT.
Explanation of structures, culture and governance within SASOL by applying McKinsey’s 7s model
McKinsey's Model - It refers to the set of tools that are used to analyse the organisational
structure of a company. McKinsey 7s strategic tools assist in depicting the proficient methods
through which effectiveness can be achieved in a company by using seven key elements of the
model (Waheed and Zhang, 2020). These seven models are Strategy, Structure, System (hard tools)
along with Skills, Style, Staff, Shared values (Soft tools). Further mentioned is the detailed
description of model in context to SASOL Ltd.-
 Strategy – As per McKinsey 7s model, Strategy refers to the method a company
approaches to meet its long term goals along with gaining competitive advantage in the
market. SASOL is highly emphasised on establishing chemical businesses and hold
competitive environment in its industry. Management have clear and vivid plans considering
checklist questions like – how to arrange resources, tapping new market and management

structure required to meet the goals etc.
 Structure – Structure refers to organizations hierarchical structure that a company follows
for smooth internal operations. Though, SASOL follows hierarchical structure but with
flexibility so that important decisions can be taken by skipping levels of no need in the
structure to carry efficiency in their operations. Teams have been formed and assigned with
tasks according to the skills and knowledge of the employees.
 Systems –It refers to the process and procedures a company follows for its smooth day to
day activities/ operations. SASOL has been highly focused in determining the internal and
external authorities in its organisational systems. It leads to clear and transparent working of
management. Apart SASOL highly emphasises on successful management of its technical
systems.
 Skills –It is defined as the traits and competencies of the human resources working in an
organisation. The business growth of SASOL is backed by its efficient manpower behind its
operations. Being in energy and chemical industry SASOL is highly focused on recruiting
skilled and knowledgable technical staff to carry operations at its oil rigs. Apart, teams are
formed on the basis of technical competencies of an individual.
 Style –Style refers to the behaviour or attitude of senior level management towards their
subordinates within an organisation. Senior management at SASOL is deeply focused in
building and creating more efficient ideas and strategies to assist teams in the completion of
tasks. Regular monitoring and providing initiatives and ideas to the staff helps achieving
desired goals.
 Staff – Its is defined as the number of total workforce in an organisation. It also emphasises
on hiring, retaining, training, and maintaining of employees working in an organisation.
SASOL conducts business in more than dozen of countries. It has diverse workforce from
multiple background, cultures, nations etc. it allows employees to share their views and
thoughts with each other and create better understanding work environment. Apart, SASOL
is deeply focused in implementing efficient procedures to retain, train and maintain its
workforce.
 Shared Values – Shared values are considered to be the core of Mc Kinsey's 7s model. All

other factors revolve around “shared values”. It refers to the norms and behaviour of all the
staff members towards each other working in an organisation. SASOL emphasises in
creating contributing environment at workplaces. Tasks are assigned to the teams involving
employees with different background to create harmony. This leads in creating healthy
working environment where employees are willing to contribute with full potential and
productivity.
An evaluation of how the above has been influenced by global operations and how the organisation
has adapted to operating in a global market.
For any business operating at global level creates complex working environment, So is with
SASOL Ltd. The above mentioned models at SASOL are influenced by global operations as it is
reaching in new markets of several countries to expand its business operations and highly focused
on implementing operations as per global requirements. SASOL has adapted the market trends and
business culture according to the specific country it operates its business in. Recruiting of
employees, working structure and system in the organisation is been formed considering global
market standards.(Remišová, Lašáková and Kirchmayer, 2019) . Employee development plans are
implemented by the company to train and develop skills and experience to diverse workforce to
build cumulative effort ness in their functioning. SASOL has made the working culture flexible by
focusing towards more to flat working structure than rigid hierarchy. Though, hierarchical structure
is there but its more inclined towards flat working structure giving flexibility of reporting to levels
in no time. It aids in bringing efficiency to the organisation.
Applying Hofstede’s Dimensions of Culture to demonstrate how SASOL has been influenced.
Hofstede's culture model is a framework that is used to learn and understand the differences
between of multiple nation's cultures. This model assists businesses in getting acquainted with
respective culture of a country to understand the ways of commencing business in respective
country. Below mentioned are the categories of Hofstede's model explained in context to SASOL.-
 Collectivism vs. Individualism – South Africa scores high on Individualism, being a South
African based company SASOL's workforce displays same characteristics. Employees are
more focused towards their personal goals rather organizational goals and are more self
reliant – and initiative takers.
 Uncertainty Avoidance Index – It can be described as a level to which people are willing to
avoid challenging and uneasy conditions. In reference to SASOL, workforce culture
displays openness and acceptance to new challenges. Also, they promote coming up with

new ideas and opinions for smooth business operations.(Rufini, 2018)
 Femininity vs. Masculinity – It focuses on the male and female values been considered in a
culture. SASOL being a South African company focuses in Masculinity value. Employees
are success driven, and aren't afraid of putting new ideas into their actions. Also, masculinity
value emphasises on ambitious and aggressive work culture bringing competencies to the
organisation.
 Short-Term vs. Long-Term Orientation – Being a South African company SASOL is
inclined towards the side of short term orientation. As, African countries are less likely to
experience fast economical growth. Employees in such work culture are more concerned in
achieving short term goals without considering Organization's long term growth.
 Power Distance Index – Power distance index is used to understand the norms and cultural
values at the organisation. At SASOL, power distance index score low. Company is focused
loosed hierarchy where consultations and information sharing is considered regular with
more direct and informal communication methods (Kalinkin, 2020).
An evaluation of ethical and sustainable factors that the organisation has to consider in a global
market and how this impacts on decision making in a global context.
To commence business at international level there are ethics and factors to be significantly
considered for carrying business operations. It varies from countries to countries and Developed
nations have more business regulations and ethical consideration to operate a business.
Few factors are mentioned below to get a brief regarding the same -
 Environmental Consideration – Environment is one of the most important factor needs to
be taken into consideration while commencing business operations in a particular country
especially in developing nations. Organisations like SASOL being in manufacturing
business should abide by the environmental standards of the country it operates in so that
pollution can be avoided (Conley and Bilimoria, 2021)
 Business By-products –Mostly businesses focus on its profit margins without considering
the residual by products obtained in manufacturing process. This might be hazardous and
can include plastic to carbon emissions. Company's like SASOL should consider it like a
fundamental duty to efficiently dispose of such By-products to protect the natural
biodiversity of particular country.
 Local community development – Multinational companies should focus on development
of the local community or area it commences its operations in. Companies like SASOL
targets outskirts area to establish their production plants such areas are underdeveloped.

Company must provide development in terms of implementing clean water and sewage
systems, developing schools etc. for the benefit of local community.
Consideration of such factors affects the decision-making process of company. As all the
decision are taken by considering ethical and sustainable factors so that an organisation can
contribute to societal development of the country in which it caries its business operations along
with achieving higher profit margins(Yoshida and Takano, 2018).
An assessment and critical evaluation of the range of strategic expansion routes available to the
organisation.
Business expansion strategies refer to the methods and ways a company can adopt to
increase its business operations to gain more customers, market presence, revenue and ultimately
profits. Further mentioned is the brief assessment of methods available to the organisation to
expands its business.
 Expansion into new market – After a certain period markets with single or one type of
product tends to dry up. This can be used as an opportunity to introduce its products in the
market for the company. After entering in new market new strategies can be planted to
expand business regardless of saturation in the market.
 Start a franchise – It refers to targeting and opening of company's branches in the areas
where demand for products and services are relatively higher and people are willing to
invest energy and money into it. Such expansion strategies favours both the company and
people of the respective place.
 Joint venture or Acquisition agreement – Joint venture and acquisition agreement is more
powerful in such markets where there are already settled players in the market. Venturing
with another business gives a business an opportunity to enter new competitive market with
focus on providing extreme satisfaction to the customers to capture new customer-base (Gao
and Li, 2020).
CONCLUSION -
Apart, brief description of organisational structure, culture and governance is being shared
by implementing models to make it more understandable. Furthermore, various sustainable and
ethical factors discussion presents importance of environment consideration in business world.
Range of strategies are also deeply emphasised in the report to discuss business expansion methods.

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