Structure, Culture and Governance of SASOL: Applying McKinsey Model and Evaluating Global Operations

This report evaluates the structure, culture, and governance of SASOL by applying McKinsey's 7S model and analyzing the impact of global operations. It also discusses Hofstede's dimension of culture, ethical and sustainable factors, and strategic expansion routes available to the organization.

Report Format

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART 2............................................................................................................................................3
Structure, culture and governance of an organization such as SASOL applying Mckinsey
model to the organization............................................................................................................3
Evaluation of above elements influenced by global operations and organization adapting these
elements in global market...........................................................................................................5
Hofstede's Dimension of culture demonstrating the influence on the organization...................5
Evaluation of ethical and sustainable factors that organization must consider in global market
and its impact on the decision-making........................................................................................7
Strategic Expansion routes available to the organization...........................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Global business environment refers to the environment of a company doing its business
globally. This helps the business to analyse the market by analysing with the companies,
competitors and clients of the organization. SASOL Limited is an organization doing its business
in energy and chemical in Sandton, South Africa. Presently, it develops the synthetic fuel
technologies and also produces types of liquid fuels, electricity and different types of chemicals.
This report will outline the structure, culture and governance of organization applying
Mckinsey's 7S model and evaluation of factors influenced on global operations. Further this
report will outline the Hofstede's dimensions of culture and its influence on organization. It will
also outline the ethical and sustainable factors and its impact on decision-making and strategic
expansion routes available for the organization.
PART 2
Structure, culture and governance of an organization such as SASOL applying Mckinsey model
to the organization
Structure of the organization refers to the system that in which the activities of the
organization is working. This describes the flows between the levels of management like from
top to down management (Gökdeniz, Kartal and Kömürcü, 2017). The organization must follow
this structure for the proper flow of the management in the company.
Culture of the organization is the collection of practices, values, ethics etc. which makes
the organization work nicely. Culture of the organization depends on the types of employees
recruited. The organization must recruit and select best employees which maintains makes their
organizational culture.
Governance in the organization helps the employees to always think good for their
business. This makes the company to increase their production and unlock the innovative
opportunities. SASOL employees should have good governance which helps to increase the
growth of company by reducing the risk.
7S Mckinsey’s Model
The Mckinsey's 7S model describes the different tools which helps the company to
analyse the design of the organization. It has seven elements which are- Structure, Strategy, skill,
Shared valued, Systems, Style and staff.

1. Structure: In this element, it describes the type of structure that the company is
following in their business organization (Gechkova, and Kaleeva, 2020). Its
shows the relation between the employees and owner that who is accountable to
whom. The organization must know the accountability and responsibility for
maintaining the proper structure in the company.
2. Strategy: This is very important for the company to make the strategy for
achieving the profit in the market. Strategies can be of long term as well as for
short term. It makes the company to have a competitive advantage in the market
and compete with the competitors.
3. Skills: These shows the abilities of the employees which should have by them in
order to perform good in the organization (Mckinsey 7S model, 2021). The cited
company employees must have technical skills to use the machines used in
making of chemicals and fuels.
4. Shared Valued: These are the core values of the company as these include
standards and norms which helps the employees that how to behave in the
organization. The employees of the SASOL must be properly guided with the
norms and standards of the company,
5. Style: This element shows the management style of the company like in which
way the top-level managers are managing the company. The organization must
have good style of managing and interacting with their employees.
6. Staff: This element includes that the type of employees needed in the organization
and how they will be selected, motivated and trained for their work. The
organization should recruit, select and trained their employees as it works in
chemical and fuels making which is done by using the safety needs.
7. Systems: This includes the procedures of the business organization which helps
them to work in a proper flow and make the decisions regarding the company.
The cited organization must have system and process of managing the work
which helps them to earn good profit.

Evaluation of above elements influenced by global operations and organization adapting these
elements in global market
The elements of the 7S Mckinsey model have a great impact on the global operations as
these elements influence the global market of the business organization. Every element has
influenced by the global operations like structure is the main element which must be focused by
the company as organization must have proper structure to work in the global market as working
globally the company must go through lots of problems and complications regarding the proper
structure and system. The second main factor that company must have is strategy which should
be very clear and specific and company must decide its overall aim to increase its market share
or to increase its sales in the global market. The cited organization must have quality of staff
with having good skills which helps the company to operate and trade in the global market.
The SASOL Limited should adopt these elements which helps the company to make the
smooth flow in the global market. By adapting hierarchical system in the company and following
to down system the company is managing its work in the global market. The company must
respond to needs of the customers which helps to survive in the global market. By doing business
globally company must have good division of labour which makes the employees to know about
their work and by this production increases and help to grow in the global market. The
organization must have set objective and strategy as company is growing in the global market
this makes the company to increases its sales and profit. Recruiting and selecting the skilled staff
helps the organization to make their customers serve the best quality of products and maintain
their position in the global market by operating well.
Hofstede's Dimension of culture demonstrating the influence on the organization
Hofstede's dimension of culture was developed by Geert Hofstede in 1980, in this theory
there is an understanding of the differences in culture across the different countries and its
impact on the business organization. It has six types which describes the culture of the
organization. The six categories are as follows:
1. Power distance Index: The power distance index complies with the inequality
and power distribution in the organization. The view point of the followers that
are lower level which are followed regarding the inequality, powers and
dimensions in the organization culture (Minkov and et.al., 2018). High power
index shows that the organization has equality and equal distribution of powers

and lower power distance index shows that the organization has the
decentralization decision-making and can take in the management system of the
organization. As the organization is operating globally it must have good power
distance index and must not do inequality on the organization cultures.
2. Individualism vs. Collectivism: This theory focus on the “I” vs. “we”. It describes
that individualism which has a great impact on achieving the personal goals in the
organization whereas collectivism focuses on the achieving the goal of the
organizational goal (Hofstede's Cultural Dimension Theory, 2021). For having the
good organizational culture the organization must have collectivism culture as
organizational goal is important in operating in the global market.
3. Uncertainty Avoidance Index: This theory considers in the unknown situations
and contingent event are deal by the business organization. Company must have
high uncertainty avoidance index which makes the organization to lower there
risk and confusion. This can be reduced by having the strict rules in the cited
organization. This manages the culture of the organization and makes the
company to deal in this situation.
4. Masculinity vs. Femininity: This theory describes the differences between the
gender. This shows that masculinity comes with following features like have
different gender role and it helps the organization in increasing its wealth whereas
femininity has following features like nurturing, fluid gender role and focus on
the quality of life. The organization must not make differences and have equality
and positive behaviour towards their followers.
5. Long term orientation vs. Short term orientation: This culture of theory
emphasis on the time horizon in order to achieve the goal. Long term orientation
focuses on the long term success of the organization whereas short term
orientation focuses on the present goal of the company. The organization must
have both term orientation which helps the company achieve goal and increase
their market globally.
6. Indulgence vs. Restraint: Indulgence includes that the employees must be free
and enjoying related to their work whereas the Restraint is just opposite of
Indulgence. The organization must have free flow of communication in the

business as it makes their followers to share their problems which maintains the
organizational culture.
Evaluation of ethical and sustainable factors that organization must consider in global market
and its impact on the decision-making
International business ethics are the rules and regulations for doing the global business
and maintaining their position in the global market (Ahmed, Kamran and Naeem, 2021). As
ethical and sustainable factors are very important for the company to manage as it has great
impact on the decision-making. Some ethical and sustainable factors are:
Ethics maintains management: Ethical factors like following of rules and regulations of
the helps in the proper management of the business organization. As management is done by the
human resources of the company they must follow the ethics of the company. If the company is
operating globally it should have proper management across the globe which makes the company
to earn more profit. SASOL must have good management system in their organization which
makes the company to work smoothly and properly. Global business helps the company to
increase their market share and profit of the organization.
Organization must not do corruption: To operate in the global market organization must
not do corruption. It is an immoral practice that company must not follow in their organization
(Kraus and et.al., 2018). The company must follow the code of conduct as it helps the company
for doing business operations. The cited organization must not do corruption if they have to
maintain their business in the global market. Company should not only follow its organizational
ethics but it should also follow the environment ethics which helps the company to grow in the
global market.
Corporate Social Responsibility: It is a sustainable factor which must be taken by the
company while exploring its business globally. This is a social responsibility for the company
towards the environment where the business is set up. The organization must give some percent
of its profit as CSR which helps the company to maintain its position in the environment. This
shows that the company is following and respecting the ethics related to the macro environment.
Impact on decision making:
By doing the proper management in the organization it helps the company to make proper
decision. Having top to down hierarchy system helps the company to take their decisions fast

(Cheng, Zhong and Cao, 2020). As the cited organization is working in the global market and
doing global operations it helps the company to make proper decisions in the company.
By not doing wrongful activities such as corruption in the global market it helps the
company to grow in the global market. Legal activities helps the organization to make the proper
decision regarding the objectives of the company.
Strategic Expansion routes available to the organization
Merger and Acquisition: It describes the merging of the companies or its assets by
doing financial transactions, acquiring property, purchasing the assets of the company and
managing the acquisitions. In this route, the one company acquire or merge with the another
company and continue its business. SASOL Limited can adopt this route to expand its business
global market (Mendy and Rahman, 2019). This helps the company to increase its financial
positions and assets. By merging or acquiring the company can increase its market share which
increases the profit of the company. But there are some barriers which the company should face
like losing the trust of their old shareholders by merging with another company, company may
merge or acquire the wrong company which was in loss from many years.
Joint venture: In this venture two or more companies pool their resources together and
work for a definite goal. This venture is for the limited pereiopod only as like the goal achieved
partnership is over. This makes the company to increase its profit without getting into the
partnership for the lifetime. The cited organization can also use this route to expand its business
withy the other companies in the global market. It provides the benefit to the company to
increase its market share for a short time and increase the profit. There are some barriers that
company may face it they take this route for expanding its business like the partners must not
have a clear communication, resources must not distributed equally or the partners may not be
trustworthy.
CONCLUSION
The above report has concluded the structure, culture and governance within an
organization by applying the 7S model of the Mckinsey which includes the style, staff, system,
skills etc. which must be managed in the organization. Further this report describes the
evaluation on the elements of the Mckinsey model which was influenced by the global market
and the organization must adopt these factors to operate in the global market. This reports also

describes the Hofstede's dimension of culture theory which evaluate the culture of the
organization with the six categories of this model that is long-term orientation vs. short term
orientation, masculinity vs. femininity, uncertainty avoidance tax etc. Further it also describes
the ethical and sustainable factors and various routes and its barriers to expand its business in the
global market.

REFERENCES
Books and journal
Ahmed, Q. W., Kamran, S. and Naeem, S., 2021. Ethics and sustainable leadership in Finnish
schools. Al-Azhār. 7(01). pp.16-24.
Cheng, C., Zhong, H. and Cao, L., 2020. Facilitating speed of internationalization: The roles of
business intelligence and organizational agility. Journal of Business Research. 110.
pp.95-103.
Gechkova, T. and Kaleeva, T., 2020. The mckinsey 7s model in the airport system
protection. Knowledge International Journal. 42(5). pp.843-848.
Gökdeniz, I., Kartal, C. and Kömürcü, K., 2017. Strategic assessment based on 7S McKinsey
model for a business by using analytic network process (ANP). International Journal of
Academic Research in Business and Social Sciences. 7(6). pp.342-353.
Kraus, S. and et.al., 2018. Sustainable entrepreneurship orientation: A reflection on status-quo
research on factors facilitating responsible managerial practices. Sustainability. 10(2).
p.444.
Mendy, J. and Rahman, M., 2019. Application of human resource management's universal
model: An examination of people versus institutions as barriers of internationalization
for SMEs in a small developing country. Thunderbird International Business
Review. 61(2). pp.363-374.
Minkov, M. and et.al., 2018. A reconsideration of Hofstede’s fifth dimension: New flexibility
versus monumentalism data from 54 countries. Cross-Cultural Research. 52(3). pp.309-
333.
Online
Mckinsey 7S model. 2021. [Online]. Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/strategy/mckinsey-7s-
model/>
Hofstede's Cultural Dimension Theory. 2021. [Online]. Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/other/hofstedes-cultural-
dimensions-theory/>