Analysis of Global Business Environment: SASOL Limited Report

This report analyzes the global business environment, focusing on SASOL Limited's operations. It examines key factors driving global commerce, including market, cost, competition, and environmental influences. The report delves into the strategic challenges faced by organizations operating globally, using PESTLE analysis to assess political, economic, social, technological, environmental, and legal factors. It also evaluates the impact of globalization on organizational governance, leadership, structure, and functions, as well as the influence of ethical and sustainable practices. The report further explores effective decision-making in a global context and various routes to internationalization, highlighting potential barriers. The analysis provides insights into how technological advancements and digital technology are reshaping global business operations and offers recommendations for SASOL to navigate the complexities of international expansion and increase its overall effectiveness and profitability.

Global Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade....................................................................................................................1
TASK 2............................................................................................................................................1
P2 Explanation of complexity of strategic challenges that has been faced by organisations
while operating their functions in global environment .............................................................1
TASK 3 ...........................................................................................................................................4
P3 Evaluation of globalisation influence on an organisational governance and leadership,
structure, culture and functions...................................................................................................4
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions
.....................................................................................................................................................5
TASK 4............................................................................................................................................7
P5 Evaluate the different ways decision making can work effectively in a global context .......7
P6. Various routes to internationalisation including the key barriers.........................................8
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................11

INTRODUCTION
Global business environment are characterized as an environment that exists in various
self-governing countries with elements endogenous to home environment of an organisation
along with influencing process of decision making on utilisation of resources and capabilities
(Noble and Nwanekezie, 2017). In simple terms, global environment mainly referred as an over
overarching environment where an organisation operate their operations. This concept
formatively include wide range of elements that are, technology, culture, politics, geographic
location and economic status. There are different types of factors that influence organisations to
globalise their operations in international market, some of that factors include, profit-making
opportunities, international growth, business growth, international reputation and more. Present
report has been conducted on, SASOL Limited engage in the sector of fast-growing energy along
with chemical company operate their functions in South Africa. Company is looking forwards to
expand their business operations into other countries. In this report, discussions has been made
on, major key factors that drive globalisation along with issues that takes place while conducted
business on global marketplace. In addition with this, report include, different types of factors
that lead towards influencing operations of a company along wit process of decision-making.
TASK 1
P1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade
Globalisation is mainly refereed as an formative interchange of merchandises,
technologies, goods, services and information in between different types of countries. Factor of
globalisation lead towards influencing overall functionality of a business environment. There are
different types of factors that effectively provide wide range of advantages to a nation that
include, increase in per capita income, job opportunities, easy availability of resources and more.
Globalisation are ,mainly found in oil market, capital market, commodity and gold market. Thus,
in simple terms process of globalisation include free trade movement of merchandises,
information, technology, services, and data. With the help of globalisation SASOL Limited can
effectively able to increase its effectiveness by offering their services in other countries where
they haven't reached yet. In addition with this, it also aid company to increase their market share
value along with rise in its profitability. There are various types of driving factors that influence
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organisation expansion at a global level that include, technological advancement, market factor,
cost and more. Mentioned below there are some major factor described in descriptive manner.
Market Factor: It has been seen form the past years that domestic market lead towards
saturation that effectively offers business organisations an opportunity to expand their
organisation at global level. In present case study, with the help of global business expansion
SASOL can effectively able to gain large amount of market share. In addition with this it become
essential for company to effectively analyse actual needs of customers with the help of which
they can able to fulfil each and every aspect of consumer need in best possible manner with great
effectiveness.
Cost Factor: It is a fact that there are some variations in cost within each and every
country. Cost lead towards determining materials, sales volume and production. Thus, it is
important for SASOL to effectively consider overall cost factor in order to expand their business
operations in an international level. Due to bulk shipping overall cost of shipping there has been
a decrease that lead towards increase in profitability of company.
Competition: There is a wide range of competition present in an international market as
there are large number of organisations perform their functions. Competition act as one of the
major factor which is present in any environment. Thus, it become essential for SASOL to
effectively diversify their functioning in other related sectors in order to increase the overall
margin of competitive advantages. Furthermore, it is essential for business organisation to take
advantage of technology on regular basis with the help of which they can increase effectiveness
of both company and its employees. Furthermore, it is important for organisations to provide
formative training to their employees with the help of which they can reduce their scrap.
Environmental Factor:
Environmental factors are termed as an environment where business organisations
operate their functions and activities. There are different types of environmental elements that
effectively influence concept of globalisation that include, political factor, social, legal and
technological factor. SASOL managers are required to frame strategies and related policies with
the help of which they can easily able to determine necessary factors that lead towards changes
in environment. By doing this company can able to perform their business functions at
international market in best possible manner. It will not only help SASOL to increase their
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overall effectiveness and profitability but also aid them to develop their business in an overall
manner.
Significant impact of digital technology upon globalising business operations
With the advancements in technology globalisation effectively facilitated in a rapid
manner. This factor acts as an one of the most essential factor that drives globalisation.
Technological breakthroughs lead towards compelling organisations to increase their overall
economies of sale along with market size. Technological advancements effectively decrease cost
of transportation along with communication that lead towards facilitating worldwide sourcing of
raw material along with other related input. With the help of technology implementation within
organisation company can efficiently encourage globalisation. In addition with this, with the
help of information technology both buyers and sellers can easily able to formulate transactions
within a time and place as per requirement. This will help them to perform their functions with
more easiness and in effective manner. Business units can take advantages of programming
tools, websites and software's with the help of which they can take their business to next level.
Thus, in order to gain more advantages at global level it become essential for companies to take
advantages of digital technology. It further help them to bring more innovative ideas within their
business units.
As per the mention evaluation, it has been analysed that there are wide range of elements
that influence business organisation functioning. It has been further advised to SASOL that it
become essential for company to effectively evaluate overall market environment of a country.
With the help of this they can easily able to analyse legal and governmental regulations of an
economy with the help of which operations of business activities become more effective.
Therefore, with the help of globalisation companies can able to gain more advancements and can
further increase their profitability by operating business at different countries. For this it, is
important to business organisations top management units to frame best effective strategies and
policies with the help of which further expansion of business units become more effective.
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TASK 2
P2 Explanation of complexity of strategic challenges that has been faced by organisations while
operating their functions in global environment
Strategic challenges are defined as problems and issues which are faced by organisation
while they are carrying out their operations in international markets (Elbanna and Pollanen,
2016). These challenges can be either external and internal which creates an impact on decision
making as well as processes of firm. In this internal challenges comprises of factors such as
failure in production process, lack of resources, unskilled employees and many others. On the
other hand, external challenges are associated with economical, social, financial, technological
and there are many others. For carrying out analysis, SASOL has adopted PESTLE analysis
which are described below:
PESTEL Analysis of SASOL-
PESTLE analysis acts as a tool and process which assist organisation to evaluate their
environmental factors which creates influence on business functions as well as operations. By
conducting an analysis manager of SASOL can formulate procedures, plans and strategies in
appropriate way as per the condition prevailing at specific time duration. For SASOL, the
PESTLE analysis has been provided below:
Political: Organisation is carrying out their functions as well as operations in 12 different
countries which comprises of Europe and Asia. They includes political factors which impacts
decision making process of SASOL like political instability, tax rate, economic condition,
legislation, unemployment rate and many others. Due to this manager of organisation can
formulate plans and strategies in relevant way by which they can conduct operations and
function of business in relevant manner.
Economical: These factors comprises of those aspects which are associated with
economic conditions of country and organisation. In this labour cost plays effectual role with
respect to decision making and supermarket activities. From 2018, minimum wage rate of UK
has been enhanced by 4.4% for employees whose age is above 25 years. Due to this budget
associated with salary shift is upward with respect to SASOL that is nearby millions of pound in
UK. This illustrates that when alterations occur in economic conditions, it will impact
organisation in same way.

Social: Behaviour of customers get altered with respect to time and trends as per delivery
of services and products on same day and expect flexible return policy (Pathak and Johnson,
2014). Apart from this, they also prefer to one stop shopping. With respect to SASOL, they
interpret requirements as well as needs of customers and formulate plans & strategies
accordingly in effectual way. By this they can retain as well as attract customers for longer
period of time and this will lead to expansion in business in appropriate manner. As per this,
research has been carried out by PWC and there are around 65% shoppers within UK. This is
possible for individual organisation to evolve effective and close relation with their customers.
Technological: Due to rapid growth in technology, various opportunities are created for
SASOL. By making use of upgraded technology, organisation can make new as well as
innovative products which will enhance profitability as well as growth of organisation. SASOL
has invested their energy within efficient projects which leads to reduction in carbon footprints
which leads to fulfilment of long term goals. Respective organisation has opted for new payment
options which are also referred to PayQwid by which customers can make payments in effectual
way.
Environmental: Organisation needs to take into consideration environmental factors
before business activities are expanded at international market. Different factors are analysed
such as weather, climate and many others. SASOL has focussed on reduction in 50% of their
carbon footprints in coming year, i.e. 2020 so that they can have safe and clean environment.
Apart from this, respective organisation has committed that they are planning to make use of
renewable resources by which they can create 100% electricity by 2030.
Legal: Policies formulated by government creates direct impact on working culture of
SASOL. Before they operate at international level, organisation needs to identify legislations,
laws and regulations of countries in which they are operating. In 2014, Oil pricing company
Commission act was passed. According to this, organisation cannot make changes in prices
without giving appropriate notice to public with this regard. As per this, organisation creates
their strategies. But due to this SASOL have faced problems in 2016 as legal action has been
taken against 17 workers as employers were doing discrimination on the basis of gender and age.
For this they formulated policies and strategies.
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According to above analysis, it has been found that these factors affects the operations of
business organisation (Taks and Green, 2015). It has been recommended SASOL can expand
their business at global level by taking into consideration these factors.
Challenges of Globalisation and strategic challenges of organisation
Globalisation assists organisation to carry out their operations in effectual manner. By
this organisation is able to carry out their entire process and formulate strategies according to
that. It also creates challenges for them as their working is affected. These challenges are
mentioned below:
Mobility of jobs: Due to happening of globalisation many organisations are shifting
towards manufacturing unit in developed countries due to which people are losing there jobs.
Loss of cultural diversity: As culture is exchanged which is taken as good but people are
loosing their distinctive and respective features.
SASOL needs to carry out their analysis and evaluation of market by which they can
reduce the impact of challenges.
Recommendations on overcoming challenges
By analysing entire situation, some major recommendations are rendered to SASOL by
which they can overcome challenges as well as issues in appropriate manner so that their
business can be developed in appropriate way. For this they need to acknowledge beliefs and
culture within operating countries where there are about to render their services. The reason
behind this is that they able to build policies as well as strategies in required way. Apart from
this, they will be able to obviate issues which they go through while they are taking their
business to respective organisation so that they can sustain within market in appropriate and
effectual way. Furthermore, they must hire employees from respective country in which they are
about to expand, this will assist them to carry out their business as per requirements and demands
of country. By making use of this SASOL can conduct and operate their business activities in
efficient way.
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TASK 3
P3 Evaluation of globalisation influence on an organisational governance and leadership,
structure, culture and functions
Mentioned below there is an globalisation influence on leadership, culture, structure and
governance:
Globalisation on governance:
In this formative rules, methods, regulations are included that lead towards providing
effective guidance to organisation (Owolabi and Makinde, 2012). It further helps in providing
best effective balance of suppliers, consumer, stakeholders, workers and management. With the
help of this SASOL can effectively able to perform their operations in best possible manner.
Governance on leadership:
It is one of the major important factor on which it is essential for SASOL to take
advantage of different types of theories such as situational and other related in order to develop
effectiveness of their leaders. In addition with this, if company have proficient team then they
can take advantage of democratic form of leadership styles in order to effectively increase their
overall effectiveness.
Governance on functions:
In order to order to increase overall effectiveness it is essential for SASOL to properly
evaluate each and every aspect of business environment such as, demand of customers and
current trend which is prevailing in an marketplace. With the help of this company can easily
able to perform their functions by measuring their economies of scale. It will further help them to
operate their functions in joint venture and partnerships. This will benefit them to expand their
area of expansion which simultaneously help them to increase their overall probability.
Globalisation on structure:
SASOL is one of the leading and growing company. Within an structure globalisation
may be differ from each other which is effectively defined below with the formative help of
McKindsey's Model.
Strategy: With the help of strategies business organisation can aid in gaining more
advancements in order to remove barriers as to attain more success. It become essential for
company to perform effectively in global market.
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Structure: Business structure effectively lead towards explaining type of culture within a
firm that include, delegation, authority, manner and more. SASOL is required to maintain proper
structure as to evaluate actual organisational requirement (Khan and Khalique, 2014).
System: In order to maintain regular standard of work it is important for SASOL to
perform their functions within an regulating schedule. Company by taking advantage of
interpretative tool can effectively able to regulate their functions.
Shared Values: It is one of the effective superordinate factor as company operate their
functions on similar values. This factor effectively regulate a manner of regulation which is
required by company to comply.
Style: With the help of best leadership and managerial style SASOL can able to
accomplish actual objectives and goals of company.
Staff: It is important for SASOL to recruit employees as per according to company job
requirement along with this company is required to provide proper training to them in order to
accomplish organisational objectives in best effective manner.
Skills: With the help of different types of skills such as creative nature, hard work ,
knowledge and more. SASOL can effectively able to improve their organisational as well as
employees effectiveness.
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions
Ethical globalization is a process wherein data, information, goods, services, technology
and many other thing are shifted ethically from one organization to another. It is a wider concept
that takes into consideration various stakeholders such as shareholders, government, community,
suppliers, employees, customers etc. The underlying motive is to encourage each individual to
work ethically for achieving goals and objectives of an entity. It is important to sustain a position
and gain competitive advantage. The impact of carrying activities are reflected in profit, sales,
revenue, share and public image in a positive way.
Sustainable globalization refers to taking business activities cross borders to help
business attain a stability point where it can have sustainability in competitive market. It will
increase profit of company which by using which it can survive in in the long run. Under this, an
entity make modifications in business structure according to requirements international business
market which is necessary for sustainability. Conducting business at international level can be
challenging due to number of legal formalities and requirements which are compulsory for
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growth and survival in cut throat competition. There are numerous functions which will have
potential impact on the business. Some of the organizational activities or functions have been
described below:
Human resource: This function is associated with choosing the right employees for the
right position so that work can be conducted smoothly. HR department has the responsibility to
find potential and suitable workforce who will apply their skills and knowledge in achieving the
goals and objectives of the company In the context of SASOL, HR department should identify all
the legislation which are applicable on it which must be complied with. When a company is
operating outside its home country, then it becomes mandatory to abide rules and regulations
which may affect the business negatively. SASOL has realized the importance of workforce
diversity along with fulfillment of their expectations for which it has opted for human practices
with a view to sustain in competition. Furthermore, SASOL maintain a friendly and ethical
environment at workplace by giving certain power in the hands of employees so that they can
work towards company's goals and objectives.
Marketing: It is both complex and needed function through which an entity creates
awareness about its products or services. The main activity performed are identification of target
customers by analyzing their needs and demands so that goods can be produced which will
provide them high satisfaction. With regards to SASOL, has a policy to sell goods at initial level
to attract more customers and capture huge market share in international markets. Along with
this, SASOl's marketing department design number of promotion activities which will be
implemented internationally. These are modified on the basis of customs. Furthermore, SASOL
creates a differentiation in the product range to be able to focus on those goods which will help it
retain its position by maintaining sustainability.
Finance: This function is associated with maintaining cash flow so that business
activities are carried smoothly. Every company raise funds for carrying its operations without
any hindrance. In concern of SASOL, finance manager has the responsibility to procure funds o
the basis of various requirements generated in the business. It should be gathered in an ethical
manner. Along with this, finance department make appropriate allocation of finance so that high
standard quality goods can be manufactured. However, an estimation should be made for
conducting analysis of current market trends and other aspects which helps in catering demands
of customers.
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