Global Business Environment Report: Sasol Limited Case Study Analysis

This report provides a comprehensive analysis of the global business environment, using Sasol Limited as a case study. It begins by defining globalization and identifying key drivers of global commerce, including technology, reduced trade barriers, consumer demand, and competition. The report then examines the strategic challenges faced by companies operating in a global environment, such as organizational structure, ethical business practices, legal and regulatory structures, and international trade laws. A PESTEL analysis is conducted to assess the political, economic, social, technological, environmental, and legal factors impacting Sasol Limited. The report further explores the influence of globalization on organizational governance, leadership, structure, culture, and function, as well as the impact of ethical and sustainable globalization. Finally, it evaluates effective decision-making processes and explores various routes to internationalization, including key barriers. The report utilizes models such as McKinsey's 7S and Hofstede's cultural dimensions to provide a deeper understanding of the complexities of global business operations.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Key factors of cost, market, environment and competition which drive global commerce
and trade.................................................................................................................................3
TASK 2............................................................................................................................................6
P2 Complexity of strategic challenges faced by company while operating in global business
environment............................................................................................................................6
TASK 3............................................................................................................................................7
P3 Influence of globalisation on organisational governance and leadership, structure, culture
and function............................................................................................................................7
P4 Influence of ethical and sustainable globalisation on organisational function..................9
TASK 4..........................................................................................................................................10
P5 Evaluate different ways in which decision making can work effectively.......................10
P6 Determine and articulate various routes to internationalisation an organisation an adopt
including key barriers...........................................................................................................10
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12

INTRODUCTION
Global business environment can be defining as the environment within various
sovereign nations as well as it influences decision making on resources uses as well as
capabilities. It is divided within external and internal environment (Amran, Lee and Devi, 2014).
This assignment is based on Sasol limited which is an oil and gas chemical industry organisation
based in Sandton, South Africa. Respective organisation has also expanded in Mozambique,
Canada, Gabon and hope for expanding in other nations also. This assignment is divided within
two parts, first will explain globalisation along with its drivers. Moreover, challenges will be
discussed which organisation face while working at global level as well these challenges will be
identified through conducting PESTEL. Apart from this, second part will discuss, McKinsey's
7S model, Hofstede's Dimension of culture as well as factors which influence culture and
organisational function.
TASK 1
P1 Key factors of cost, market, environment and competition which drive global commerce and
trade
Globalization is a term used when organization develop international influence or move to
operating on international market. It is referring as a movement of goods and services or people
across geographical boundaries. This movement of business or business activities needs to be
managed in a unified and integrated manner (Caiazza, Shimizu and Yoshikawa, 2017). In
economic term, globalization can be described as expansion of business market to other nation
around globe through free trade. It can be considered as an interconnection of people and
businesses across the world that leads to integration of global cultural, political and economic of
countries.
Globalization can be driven by various new development as well as gradual changes in
world economy. Different factors which drive globalization as well as have impact on business.
These factor can affect direct or indirectly to business performing in different areas.
 Technology - Globalisation of business activities will lead to use on new and updated
technology of a country (Charter, 2017). By advance technology company can perform
its business activities in more effective and efficient way. Sasol Limited can use faster

technology in its business activities with cheaper cost of technology in global market
economy.
 Reduction of cross trade barriers - By globalisation Sasol Limited can reduce cross
trade barriers and can get relief by changes in rules and regulation by government. This is
one of the most critical driving force of globalisation as every country restricts movement
of products and services across borders. Globalisation will lead to free trade which will
ultimately increase in growth rate of economy.
 Consumer demand - Globalisation will help in improving in economic condition of
country as well as increase the level of income and standard of living (Cheng, Green and
Ko, 2014). This is leads to increase in demand Sasol Limited products as customers are
more aware of products available. Increase in demand of products in various market will
help in increase market share of company.
 Competition - When company is operation its function is global market it can have
competitive advantage over other rival companies. Sasol Limited can export its products
across the globe and earn more profits and market share of company.
 Differences in tax systems- The respective company’s strategy is to benefit from low
unit labor cost as well as other production costs. Thus, several nations are promoting
foreign direct investments (FDI) by reducing down their tax levels. It will give Sasol an
opportunity of expansion in the targeted nations by keeping in mind the advantages
which are provided by the government of the country.
In current scenario, technology is getting advance and playing key role within
globalisation process of business. There are several technologies out of which digital technology
is also part of that as well respective technology mainly support communication. Thus, such
technology help organisation in communicating information and building relation with customers
at worldwide level (Cumming and Zahra, 2016). Significant impact of digital technology in
globalisation process of Sasol Limited are mention below:
 Digital technology will assist Sasol Limited in expanding their business within different
area as well as company can also approach customers at time with low cost.
 Respective technology removed difficulties of communication and result in easy
approach to customers.

 Along with this, through digital technology transaction related to purchase and sell of
products or services become more easy as well their will be no need to go store individual
can get their needed things by sitting in another nation.
PESTEL is a tool which helps to analysis external factors effecting a company. Political
factor, economic factor, social factors, technological factors, environmental factors and legal
factors are external factors which has a both positive and negative impact on Sasol Limited.
 Political Factor - Political factors are those which are effected by government ruling in
country. In Canada, there is political stability and government has given more importance
to chemicals companies by framing new policies for growth which has positive impact on
Sasol as well (Dubihlela and Sandada, 2014). Local government interference, corruption
in chemical industry, high tax rates and week trading regulations can effect negatively on
Sasol Limited.
 Economic Factor -These factors majorly defines economic condition of country
effecting profitability of firm. Canada has high skilful labour and quality of infrastructure
is also appropriate in chemical industry and this has a very good impact on Sasol Limited.
High exchange rate and raising capital in local market can be an issue for chemical
companies in Canada and thus, it can effect adversely on Sasol Limited.
 Social Factors - Social factors are related to culture, beliefs and attitude of people living
in country. Canada has high level of education and society there is of broader nature this
impacts positively on respective organisation. Some societies there have a negative
attitude towards chemical companies like Sasol Limited and are concerned about health
issues arising due to establishment of such companies.
 Technological Factor - Technological factors are about technology innovations and
companies’ growth effecting through technology. Coming to Sasol Limited, there are
many new technologies which are adapted by respective organisation in recent years and
this has good impact for growth of its business in Canada. Cost of technology for
expansion in various areas in Canada is a negative point for Sasol Limited.
 Environmental Factor - Environmental factors includes weather condition, carbon
footprint, waste disposal effecting firm. Climate of Canada is suitable for chemicals in
which Sasol Limited deals in and this is a positive impact. In Canada, there is carbon

footprint target set by government which is to followed by chemicals companies and can
be considered as negative factors for respective company.
 Legal Factors - Legal factors involves health and safety regulations, consumer law of
protection, international trade regulation and so on. All chemical companies in Canada
should go with copyrights and patent law, employment law which impact positively on
Sasol, as this company follow these laws uncompromisingly. This company even has a
negative impact of legal framework of Canada too as there are certain strict laws related
to air pollution, water pollution and chemical pollution.
There are several factors of globalisation that have wide impact on the operations of
organisation and its function as explanation of these are as follows :-
 International economic integration – It is related to arrangement that done within
diverse locations as well as assist in removing trade barriers. With the assistance of
international economic integration development within monetary and fiscal policies take
place. With the assistance of respective factor SASOL limited can conduct trade activities
in better way.
 Foreign direct investment – It is type of investment plan that will help in controlling
ownership within business activities in specific nation along with conducting work in
another country. With the assistance of foreign direct investment an organisation will
able to conduct their operations in another nation in proper manner and can generate
revenue.
 International business and trade – It is related to situation in that an business firm can
conduct international trade of technology, services, goods, funds and so on across
national boundaries. International business and trade will assist SASOL limited in
expanding their business operations at worldwide level in proper manner.
By these above mention globalisation factors SASOL Limited is getting affected in
positive manner because with the assistance of these respective organisation can expand their
business in appropriate manner and generate revenue.
Apart from this, there are various digital revolution that have impact on globalisation as
well as assist business firm in conducting their work within effectual manner. Out of these some
as explained below :-

 E-Commerce - It is related to buying and selling procedure of organisation. As per this
when an organisation implement e-commerce tool within their working it simply mean
they will offer their product and services through online platform. This will help SASOL
Limited also in conducting their business through online medium.
 Social media – It is related to medium adopted by organisation for doing marketing of
their goods and services. With the assistance of social media SASOL Limited attract
large number of customers as well. Moreover, company will promote their in effective
manner through social media.
By these digital revolution SASOL Limited will expand their business within
international market in proper manner. Along with this, all these will also assist in attracting
customers as well as gaining huge profitability and market share.
TASK 2
P2 Complexity of strategic challenges faced by company while operating in global business
environment
Everything have its positive and negative both impact same as globalisation also have. As
Sasol Limited are facing various challenges while doing business at international level.
Explanation of these challenges are mention below: -
 Organisational structure – It is one of the major challenge company face by doing
business at global level (Greenwood, 2016). Because it may hurdle the ability of effective
incorporation within new region with value chain as well corporate structure. There is
requirement of huge investment along with some specific strategy business unit for
managing operation of Sasol Limited at global level. Although, finding right direction
and strategy of foreign investment is important for sasol Limited.
 Ethical business practices – There are some challenges of globalisation is ethical
business practices faced by the company in areas such as product safety, corruption,
product safety, labour and so on. All these play wide role in success or failure of global
companies as well there are several nations who have strict laws related to all these
issues. Thus, Sasol Limited have to invest in such nations who have rules and regulation
related to the issues as well result in profit maximisation from their globalisation process.

 Legal and regulatory structure – Every country has some unique laws and regulation
for governing companies. Thus, if organisation will not follow it then these will give
negative impact on their working. So it is essential for Sasol Limited to understand all
legal factor of particular nation while doing business expansion so they will make
strategies by keeping these factor in mind.
 International trade laws – when it come to global level expansion there are several
trade laws which act as an strategic challenges within working of SASOL Limited as they
have to follow. As there are some trade restrictions which directly shows that if company
will not follows international trade laws then they are performing unlawful activities.
 International economic factors - It include several factors such as currency exchange
rate, inflation, national income and so on. All these work as an strategic challenges for
SASOL limited within their global expansion because economy of every nation have
different business environment and organisational working condition which will give
wide impact on working of respective organisation at global level.
 Government restrictions – There are various restrictions government have on several
activities such as tariff, subsidies, quotas of export and import etc.. Because of all these
SASOL limited face strategic challenges while expanding their business at global level.
As government of every nation had given some rules and regulation which have to be
followed by every company who want to expand their business.
After going through the above mention issues it has been recommended to SASOL
Limited that, they can take several major steps to remove. Thus, for operating at global level
marketing division of respective organisation have to go through all the rules and regulations
which are introduced by government as well follow them for smooth working of organisation
without any restrictions. This will result in avoiding legal issues and help in building image of
SASOL Limited at global level. In addition to this, SASOL Limited have to made several
strategies before entering in global market. So that, available resources will be utilise in better
manner and company will gain maximum return. In relation of this, respective business firm
have to build their good brand image for gaining trust of foreign customers. Apart from this,
SASOL Limited have to analyse economic condition of nation before entering within market so
that their inflation and deflation, currency exchange rate etc.. So that, their impact on the
working of association will be identified in effective manner and SASOL Limited will design

their expansion strategy in effective manner. Moreover, they have to implement all government
policies within their working so that issues will not affect their organisation.
TASK 3
P3 Influence of globalisation on organisational governance and leadership, structure, culture and
function
McKinsey's 7S Model have seven areas of organization which are classified within soft and
hard. Out of these seven strategy, structure and system comes within hard elements as well these
are help in easy management of business activities (McKinsey’s 7S Model. 2016). Remaining
four come under soft element explanation of these 7s in relation of Sasol Limited are explained
below: Strategy – It is related to planning process which is formulated by organization for
gaining competitive advantages as well as for long term sustainability in international
market. Sasol limited is applying strategies in their working which help them in achieving
competitive advantages through strong mission, vision and values. Structure – This element of Mckinsey's model represent way in which business
department and other process in doing their day to day operations. Although, structure is
more observable and easy to modified framework (Kasemsap, 2018). Sasol limited use
divisional structure in which they easily manage their department working in effective
manner. System – It is simply process of organization which disclose day to day operations of
business activities as well as examine the way of decision making. Thus, Sasol Limited
have to manage as well as maintain their overall system in effective manner. So that, they
will provide integrated energy as well as chemical services to existing and potential
customer is better manner. Skills – This element is related to abilities as well as capabilities of Sasol Limited staff
members for performing their daily basis activities within effective manner. Along with
this, skills also include competencies and capabilities of personnel’s (Khan and Khalique,
2014). When modification take place within business environment or organization major
issues will be face by staff members related to their skills because they have to reinforce
latest strategy and structure which need update skills for performing work. Moreover,

Sasol limited investigate skills of their personnel’s so that task will be assigned to them
according to their capabilities. Staff – They are assets of organization as well play important role in accomplishing their
goals and targets. Thus, Sasol limited look that how much staff members are required for
performing organizational operations. Although, respective organization have approx.
30100 employees who are working for achieving goal and regenerating revenue. Style – It is related to the way in that organization is manage by top level division which
involve major actions such as decision making. Moreover, it also includes management
style of leader and manager which they use for managing daily basis operations (Lewis
and et. al., 2017). Sasol Limited are also using management style which help them in
performing daily basis activities within effective manner and result in accomplishing per-
determined goals.
 Shared value – This is core element of Mckinsey's model because shared value are
standards and norms which result in analysing staff member’s behaviour as well activities
of firm. Thus, staff members of Sasol Limited have to follow all the shared value in
effective manner for performing their working within effective manner.
Hofstede's culture dimension is the framework utilize for cross cultural communication.
It was introduced by Geert Hofstede and there is various type of culture dimensions within it.
Explanation of these in relation of Sasol Limited are as follows: - Power distance – This dimension is related to the degree by that less powerful human
being of society allow as well as except power which is distributed unevenly. Power
distance culture is implemented within Sasol Limited because within organisation power
is not equal within everyone as they are given according to job role of individual. individualism V/S Collectivism – It is culture dimension that focus on the questions
related to that individual will select the Kint network of member or preferred to be left
alone. Uncertainty avoidance – It is related to expression or state of degree where society
members not feel comfortable with confusion as well as overconfidence.
 Masculinity V/S Femininity – In this masculinity is related to preferences of community
related to achievement, material rewards for success or growth. On the other hand,
femininity is related to preferences for cooperation, caring, collaboration, quality life etc..

For SASOL Limited masculinity V/S Femininity culture will be suitable as well
implementation of this will help them in building positive environment within their organisation.
Along with this, such practices will result in business expansion in proper manner.
P4 Influence of ethical and sustainable globalisation on organisational function
There are numerous ethical and sustainable factors which are considered by Sasol Limited within
global market. Explanation of these are as follows :-
 Insist on integrity in business relationship – This is sustainable factor because every
company want to expand their business at global level. Thus, for them it is important to
build good relation with other organization of international level (Noble and Nwanekezie,
2017). In addition to this, Sasol limited have to build relation with customer, suppliers
and accept competition for their long term sustainability in global business environment.
 Treat employees fairly – It is an ethical approach which result in promoting staff
members well being, their safety and security at performing several activities within work
place. Along with this ethical consideration also says that company have to pay salary to
the employees according to their working hours or work. Thus, treating employees fairly
result in building good image and goodwill of Sasol Limited at global level.
 Engage in sustainable processing activities – Ethical consideration is important for
business firm because it help them in decreasing negative impact and result in easy
operations of business (Owolabi and Makinde, 2012). Sasol Limited do their process for
transforming natural gas within energy and chemical product which include oil, waxes,
transport, fuel and many more. Thus, they have to develop wastage policies and strategies
that will result in maintaining healthy or Eco-friendly environment.
Ethical Globalisation – Globalisation has integrate economy of world as well as bought
prosperity to some nations but left several others on the margins. Moreover, globalisation would
be sustainable only when it is incorporate the dimension of justice, as it indicated with the
concept of globalisation with solidarity or ethical globalisation.
Sustainable Globalisation – Globalisation is the term which defined as rapid expansion as
well as integration of business activities across border in response to dramatic technology and
government policies. Furthermore, sustainable globalisation represents a breakthrough and
fundamental transformation in how people approach doing business in global world.