Global Business Environment Analysis: SASOL Limited Case Study Report

This report provides a comprehensive analysis of the global business environment, using SASOL Limited as a case study. It begins by examining the key factors driving global trade and commerce, including cost, competition, environment, and market drivers, as well as the impact of digital technology. The report then delves into the strategic challenges faced by organizations operating globally, supported by a PESTLE analysis of SASOL Limited. Furthermore, it evaluates the influences of globalization on organizational governance, leadership, structure, culture, and functions, employing McKinsey's 7-S model. The report also assesses the impact of ethical and sustainable globalization on organizational functions, and different decision-making approaches in a global context, including routes to internationalization and key barriers. The report concludes with a summary of the findings and recommendations for SASOL Limited to navigate the complexities of the global business environment effectively.

Global Business
Environment
Table of Contents

INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis of various key factors of cost, environment, market and competition which drive
global trade and commerce..........................................................................................................3
TASK 2............................................................................................................................................5
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples...................................................................5
TASK 3............................................................................................................................................6
P3 Evaluation of influences of globalisation on organisational governance and leadership,
structure, culture and their functions...........................................................................................6
P4 Evaluate impact of ethical and sustainable globalisation on organisational functions..........9
TASK 4..........................................................................................................................................10
P5 Evaluation of different ways of decision making in a global context..................................10
P6 Determine various routes used by companies for internationalisation an organisation,
including key barriers................................................................................................................11
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Global business environment refers to an environment in which different countries
collaborate with one other to formulate a frequent decision for development of economy of world
(Alkhafaji and Nelson, 2013). This will assist in bringing dependency of each nation on each
other for making improvisations in an area and build up decisions for quick development.
SASOL Limited is taken into consideration which is fastest growing energy as well as chemical
organisation within South Africa. They have expanded their business into diverse developing and
developed nations such as Canada, Australia, Gabon and Mozambique for seeking further
expansion within other countries. This report will analyse key factors which leads to
globalisation, including strategic challenges which are related with the same. It will also aid to
determine how this concept may influence its organizational culture, structure and functions, as
well as its decision making.
TASK 1
P1 Analysis of various key factors of cost, environment, market and competition which drive
global trade and commerce
Within present competitive world, globalization refers to a concept which renders different
opportunities to organisations like information, services, technology, transfer of goods and many
other factors across the territorial boundary (Amran, Lee and Devi, 2014). This can be attained
by development of new strategies as well as modification within existent plan and policies.
Along with this, by the assistance of business expansion, organisation can enhance their
profitability as well as enhancement within living standards. With reference to SASOL Limited,
it is already mentioned that they have expanded their operations in different countries around the
world. But they are looking to further expand their operations in new market in unlike nations. In
this case, it is crucial for management to acknowledge different factors which are responsible for
driving process of globalization. They are illustrated below:
 Cost driver: With the assistance of high quality services, products can be accessed easily
within global market. This will lead SASOL Limited to acquire cost advantage within
market. Along with this, management team furnishes goods at high prices and acquire
economies within scale through assistance of outsourcing (Bititci, Cocca and Ates, 2016).

Also organisations can acquire more profit as cost of shipping is declining on customary
basis as supply of products is in bulk.
 Competition drivers: It is one of the crucial factors as there exists intense competition
among organisations due to globalisation. Along with this, with the assistance of FDI
(Foreign Direct Investment), SASOL Limited is enhancing their interdependence in
different countries continuously. This will aid, organisation to attain competitive edge
within market (Cheng, Green and Ko, 2014).
 Environment: It denotes surroundings in which business functions and operations are
carried out. Different environmental factors impacts working conditions of organisation
in both affirmative and pessimistic way. It is the factor with whose assistance
organisation can attain success within business environment by forcing organisation for
adoption of alterations as per requirements of technologies, legislations and laws of
different countries and many other factors.
 Market drivers: From past few years, there has been saturation within domestic market
which leads to international expansion for accumulation of opportunities. With respect to
SASOL Limited, organisation can acquire large number of opportunities through
expansion of their business at international market. For this, it is necessary for them to
scrutinize market trends and then render services as per demands (Coltman and et. al.,
2015). By furnishing products within new markets, selected organisation can attain
vantage as well as enhance sales by confining large marketplace.
Significant impact of digital technology
Digital technology is one of crucial factor which assist organisation to attain wide range
of opportunities within competitive market. It also leads to huge development within
organisation by enhancing communication, mobility, global level connectivity and many others.
As a result all these processes will aid SASOL Limited to bring innovation within their entire
working structure.
Thus, it can be concluded that all the mentioned elements will aid SASOL Limited to
expand their business operations effectively, innovatively and easily. Therefore, this organisation
needs to emphasise on various factors through which productivity can be enhanced at domestic
as well as international levels within market (Daley, 2012).

TASK 2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples
When operating within a global environment, organisation has to go through ample of
strategic challenges which will enhance complexities in operations for performing in a stipulated
duration. It comprises of economics of globalisation, international trade and environmental
challenges associated with the same (Dubihlela and Sandada, 2014). Along with this, there is a
lot of risk involved within strategies associated with diversification, complexities of global
supply chain management and many others. With respect to SASOL Limited, as they deal with
chemical business, therefore, they needs to acknowledge critical problems which are faced by
them while entering within new market will be global supply chain due to enhanced needs of
sustainability. To acknowledge these challenging roles, it is necessary to for SASOL Limited to
make use Pestle analysis. This has been elaborated below:
Pestle Analysis of SASOL Limited:
Political factors: SASOL Limited is carrying out their business operations in diverse
countries. Thereby, this factor plays important role within their business. By identification of this
factor organisation can ensure its impact on long term profitability. As this company is operating
business in chemicals industry that shows its major diversification in global market and expose
itself to a wide environment of political and associated risks (Eden and Ackermann, 2013).
Economical factors: These factors create a strong defy through variations within interest
rate, foreign exchange rate, saving, inflation and many others that reflect entire demands and
investment within an economy. In the similar manner, micro environment factors comprises of
competition norms which influence competitive edge of organisations. SASOL Limited can
make use of economic factor of organisation in which they are looking forward to expand their
business. Organisation need to take into consideration various economic indicators.
Social factors: This factor includes culture of society of a particular nation and way of
operating a business, which may impact directly the existing corporate culture of an
organization. Hereby, shared beliefs as well as perception of targeted audience play a great role
in analysing how SASOL Limited can design its marketing strategies to spread message related
to chemicals and its major diversification (Elbanna, Andrews and Pollanen, 2016).

Technological factors: As technology is evolving and has developed a lot so far, therefore
when organisation enter into a new market then they must make use of latest technologies for
development of innovation within business. This will aid in diversifying their business. This will
strongly affect supply chain management of SASOL Limited.
Legal factors: As per this factor, legal framework is not robust enough for protection of
their intellectual property rights (Khan and Khalique, 2014). Thus, SASOL Limited must
carefully formulate strategies for protecting their business idea from other organisations before
they enter in a new market.
Environmental factors: Every country has their own set of rules and regulations along with
certain environmental standards or norms which creates a strong impact on profitability as well
as productivity of organisation. Thus, before SASOL Limited enters in a new market, they must
examine environmental standards in an appropriate way which will ensure that they are
furnishing their services in an appropriate manner.
TASK 3
P3 Evaluation of influences of globalisation on organisational governance and leadership,
structure, culture and their functions
Globalisation within business environment aids different organisations to move within
new markets and develop their business in specific country (Kirchoff, Tate and Mollenkopf,
2016). This impact different aspect associated with business environment such as organisational
structure, culture, governance, leadership and many more. Corporate governance denotes set of
rules as well as practices which aids organisation in management as well as controlling different
tasks and activities of business. The SASOL Limited is a chemical organisation which operates
their operations at global level and thereby, this company needs to adhere to corporate
governance as per international regulations and rules. These are essential for acknowledging
demands and needs of customers at international level. This organisation needs to make
alterations within leadership style as well as encourage workers for working harder so that
organisational goals can be attained and also expectations of customers are fulfilled. For
analysing other elements of globalisation that impact on functions as well as other aspects
associated with SASOL business, McKinsey’s 7’s model can be used. This model is explicated
below:

 Strategy: This denotes a tool which aids in evaluation of alterations within business
environment and ways in alterations are opted within existent business environment.
Enhanced strategies will organisation to opt for modifications in global business as well
as operate in different countries (Liu and Wang, 2014). This aids organisation to analyse
the ways in which barriers can be minimised. Employees of SASOL Limited chemical
organisation are rendered with effectual training as well as development sessions through
which they can gain competitive edge within their business. These trainings will assist
employees to opt for new technologies, thereby leads to affirmative working
environment. Structure: It will assist to acknowledge the working culture of organisation. The leader
as well as managers of SASOL Limited needs to have hierarchal organisational structure
for addressing international requirements and demands of customers.
 System: SASOL Limited is a chemical organisation which is furnishing their operations
at international level but they have started at time when there were not a lot of
advancements in terms of technology. But at present scenario, for being sustainable and
compete with other businesses it is crucial to opt for latest techniques and tools through
which functions can be carried out smoothly (Noble and Nwanekezie, 2017).
 Shared value: Excellence and enthusiasm will assist in development of values among
employees. Leader as well as managers of SASOL Limited needs to have transactional
style of leadership and as per this management can acknowledge basic requirements of
employees and render affirmative working environment.
 Style: Management of alterations within business is crucial and leaders of SASOL
Limited must opt for transactional style of leadership as well as chaotic style of
management through which they can ensure that employees carry out their roles and
responsibilities in an appropriate manner.
 Staff: Employees are major assets of organisation. Therefore, it is mandatory that
appropriate culture must be executed within business in which every employee will be
treated equally (Okeke, Onuorah and Jakpa, 2016).

 Skills: It is essential to have effectual analytical as well as managerial skills so that
organisational goals of SASOL Limited can be attained through accomplishment of
requirements and demands of international customers.
Globalisation on culture:
This is the knowledge as well as characteristics of particular team of individuals,
religious, languages, habits etc. It can influence TESCO that is described with Hofstede's
theory. It is the concepts which were introduced by Greet Hofstede which can be shown with the
help of six dimensions (Owolabi and Makinde, 2012). Also, this is the tool for cross cultural
communication that explains impact of culture upon individuals as well as society. The entire
dimension is mentioned below: Power distance index: It shows the measures of inequality that is accepted and rejected
through people with or without power. TESCO manager should have power to allot task
to its workers according to their job role. Individualism Vs Collectivism: if work is done by whole team members together then
objectives can be accomplished (Pathak, Hoskisson and Johnson, 2014). Likewise, when
TESCO individual member perform work then problems may rise as a results their goals
can be attained in specified time periods. Uncertainty Avoidance: This is the condition when team members feel anxiety for
inappropriate situation that raise within company. Because of globalisation, TESCO
manager’s decision making abilities get influenced. Masculinity Vs Femininity: This considered that there should not be any difference
between male as well as female workers working into company. Both should be
facilitated with same opportunities. As TESCO can accomplish their objectives in
successfully way. Long Term Vs Short term orientation: This is considered as union interrelationship of
recent and upcoming challenges as well as actions. TESCO should follow short term and
long term orientation for fully accomplishment of goals.
Indulgence Vs Restraint: It is considered as a level of freedom that is facilitated people
for accomplishing it expectations. Whole workers, manager of TESCO should work according to
their comfort level in firm for better results (Scott, 2013).

In addition to this, it will aid in incorporation of alterations within present working culture.
The management of SASOL Limited organisation can opt for Hofstede cultural dimension that
consist of power distance, long-term v/s short-term orientation, masculinity v/s femininity,
individualism v/s collectivism and indulge v/s restrain. By evaluation of these dimensions,
organisations can opt for good culture within their working structure for attainment of short as
well as long term goals of organisation.
P4 Evaluate impact of ethical and sustainable globalisation on organisational functions.
Ethical globalization is defined as a process which states that while carrying out business
at international level; it must be ensured that transfer of services, information, products, etc. must
be carried out in an ethical manner (Shi, Sun and Prescott, 2012). Along with this, in this process
SASOL Limited needs to formulate effectual corporate governance strategies by taking into
account interest of stakeholders, needs at global level and many others. As a result of this
organization is required to conduct their business operations in an ethical manner so that desired
outcomes can be attained from international market. With assistance of sustainable globalization,
SASOL Limited will be able to widen sustainability within competitive market. Thereby, it is
essential for SASOL Limited to make modifications within some of their operations to
accomplish organizational requirements.
Human resource management: It is one of the most crucial assets of every
organization. Therefore, it is necessary for SASOL Limited to acquire fresh talent on regular
basis and have effectual strategies so that long term objectives can be attained through high
effectiveness. For this, there needs to be some variations in HR policies as it will create a strong
impact on accomplishment of projects taken by organization. This will also have an influence on
working conditions as well as performance of entire organization. Thereby, it is necessary for
management of SASOL Limited to render flexible working hours, rewards, incentives, benefits
and many more according to demands as well as working culture of organization.
Finance: It is other important element which is needed while carrying out globalisation
i.e. funds. Before entering within international market, it is necessary for SASOL Limited to
have adequate amounts and resources (Slack and Brandon-Jones, 2018). As a result of this, they
will be able to conduct their business operations in an appropriate manner. Thus, for carrying out
business operations in an ethical as well as sustainable manner, management of SASOL Limited
needs to make lots of investment which will influence the cost of production.

Marketing: With respect to this, new strategies must be adopted by organization in terms
of technologies; marketers of SASOL Limited can identify requirements as well as demands of
chemical products in an effective manner within international markets (Taks, Chalip and Green,
2015). Along with this, latest marketing technologies will assist organization to influence wide
range of customers with respect to services being offered by them. But management needs to
have certain alterations within their existent infrastructure by which operations of business can
be carried out in sustainable as well as ethical manner. For this, organization needs time and
finance to have positive outcome.
According to analysis mentioned, it has been found that by making some alterations as
well as enhancements within existing functions SASOL Limited can acquire large number of
benefits within international market. All the above mentioned processes assist to carry out
different activities in sustainable and ethical manner.
TASK 4
P5 Evaluation of different ways of decision making in a global context
In this process managers as well as leaders have an efficacious role so that they can make
timely decisions for formulation of appropriate strategies and execution of alterations as per
demands of globalisation (Alkhafaji and Nelson, 2013). For this, management of SASOL
Limited renders effective training and leaders are responsible for furnishing effectual guidelines
to employees so that they can work as per requirements of organisation. This will lead
organisation to attain their long term objectives.
Different ways of decision making- Visionary: In this case, management of SASOL Limited will need to formulate clear
vision so that decisions can be made as well as communicate same with employees. This
will enable human capital to analyse their role and responsibilities in an appropriate
manner. The vision will aid employees and other team members to evaluate that what
organisation will attain after entering within new market (Amran, Lee and Devi, 2014). Guardian: This model aids organisation to formulate healthy decisions by taking into
consideration fact based information as well as development of plan in a careful manner
for globalizing business.

 Motivator: In this case, an appropriate choice is made by management of SASOL
Limited to make effectual decisions through persuasive related people with need of
alteration and building up alignment accordingly (Bititci, Cocca and Ates, 2016).
P6 Determine various routes used by companies for internationalisation an organisation,
including key barriers
With respect to SASOL Limited which is a chemical organisation there exists different
barriers in front of them while expanding their business operations on terms of expansion into
new market. The organisation can have following barriers:
 Financial barrier: One of the major barriers faced by any organisation while entering
into new market is lack of mandatory financial resources. With respect to SASOL
Limited, they are globalising their business but if they do not possess adequate resources
then they will not be able to enter into a new market (Cheng, Green and Ko, 2014).
 Managerial barrier: It is the other barrier which is faced by organisation while
globalising operations of business. Management of SASOL Limited needs to alter their
working structure, culture as well as organisational structure to attain goals in an effective
manner within new market. Thus, it is considered as major barrier while expansion of
business operations.
 Market-based barrier: While globalising business functions or operations, inadequate
knowledge with respect to existent trends, needs of customer, foreign market conditions
will act as barrier (Coltman and et. al., 2015). With respect to SASOL Limited,
management of organisation must identify latest market trends so that overall profitability
as well as productivity can be improvised in an efficacious manner.
For eliminating these barriers, organisation needs to opt for best as well as suitable methods
for internationalisation. Some of these routes are specified below:
Routes to internationalisation:
Licensing: It is defined as an agreement in which SASOL Limited can form a contract with
existent organisation for executing their operations in a new market. With assistance of licensing
process, organisation can charge some fixed amount of royalty for selling their services and
products within international market (Daley, 2012). As a result, this method will assist them to

earn income through which they can expand their business within market as well as by this there
will be minimum risk.
Merger and Acquisition: It is one of the most common methods which is being used by
organisation to expand their business. With the aid of this, SASOL Limited can gain high
amount of resources for accomplishment of their goals in an effective manner within
international market. Along with this, merger and acquisition assist in reduction of competition,
risk, capture huge market share and many others (Dubihlela and Sandada, 2014).
According to above mentioned routes, SASOL Limited opted for merger as well as
acquisition method to enter within new market. Reason behind this is that, organisation will be
able to attain needed amount of human capital, resources and many others while expansion of
business within international market.
CONCLUSION
From above report, it can be concluded that globalisation refers to process in which business
organisation can get wide range of opportunities for expansion of their operations within
international market. In addition to this, it has been identified that organisation will be able to
improvise their performance by implementation of alterations within business structure, culture,
leadership style as well as organisational functions. It has also been found that there exist various
strategic challenges which will put lots of pressure on organisation for developing effectual
strategies as well as plan before they expand themselves within new market. As a result, it will
lead to gain higher return on investment.