Exploring Global Business Environment: Commerce, Challenges & Routes

This report provides a comprehensive analysis of the global business environment, focusing on the key factors that drive global commerce and trade, including cost, market dynamics, environmental considerations, and competition. It explores the complexities and strategic challenges faced by organizations operating in a global context, using SASOL as a case study and applying PESTLE analysis to illustrate the impact of economic, social, political, technological, environmental, and legal factors. The report also examines various routes to internationalization for organizations, highlighting key barriers such as resource constraints and the influence of digital technology on globalizing business processes. Furthermore, it addresses the challenges posed by globalization, such as job mobility and cultural homogenization, and offers recommendations for businesses like SASOL to effectively manage these issues by respecting cultural values and leveraging local expertise. The report concludes by emphasizing the importance of strategic policies and adaptability for businesses to thrive in the global market, with references to relevant academic literature.

Unit 18 –
Global
Business
Environment

Introduction
 The international business environment has been
defined as an environment that occurs in many
self-governing nations and contains components
that are endemic to an organization's home
environment, as well as impacting decision-making
processes about resource and capability use. The
term "global environment" refers to the overall
context in which an organisation works.
Technology, society, politics, geographic location,
and other factors all play a role.

P1 Analyse key factors of cost, market,
environment and competition that drive global
commerce and trade.
.
 Globalisation is primarily defined as the formative exchange of
products, technology, goods, services, and information among
various nations. Globalisation has an impact on the entire
operation of a corporate environment. There are a variety of
elements that can efficiently give a nation with a wide range
of benefits, such as increased per capita income, job
possibilities, easier access to resources, and so on. The oil
market, financial market, commodity price, and gold market
are all examples of globalisation.

P6 Determine and articulate the various routes to
internationalisation an organisation may adopt, including key
barriers.
 To connect the term 'internationalisation' to the the key goals, huge organisations, as well as small and medium-sized
businesses, might become international.
 They also mentioned that a SME's foreign development is extremely beneficial in terms of contribution to a nation's
growth in the economy. However, it's important to remember that not every small business is ready to grow into overseas
markets.
 Economic and personal resource constraints are frequently cited as a hindrance to SMEs' internationalisation. Financial
issues as a whole, resource availability, the cost of overseas operations, and limited access to money and credit are
among them. The relevant evidence includes the losses experienced by new foreign new enterprises or early-stage SME
exporters in terms of securing operational and gained a number, as compared to their more established peers.

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 The influence of digital technology on globalising corporate processes is significant
 Globalisation has been effectively enabled in a quick pace as a result of technological improvements. Among
the most important factors driving globalisation is this aspect. Technological innovations push businesses to
raise their total economies of sale while also expanding their market share. Technological improvements
have successfully reduced the cost of transport and communications, allowing for easier global procurement
of raw materials and other associated input. Companies may effectively foster globalisation by using
technology throughout their organisations.
 Furthermore, with the use of information systems, both purchasers may readily create deals at a time and location that
suits their needs. This will make it easier for them to carry out their duties in a much more efficient and productive way.
Device that plugs, websites, and programs may assist lines of business in taking existing activities to the next level. As a
result, using computer media to stay ahead of the competition on a global scale has become crucial for enterprises. It also
assists them in introducing more fresh ideas into their particular fields of business.

P2 Explain the complexity of
strategic challenges faced by
organisations when operating in
a global environment supported
by specific examples. The term "strategic difficulties" refers to the problems and concerns that organisations confront
when conducting business in worldwide markets. These problems might be external or internal,
and they have an influence on corporate decision-making and procedures. Internal problems
include things like manufacturing process failures, a lack of resources, and untrained staff,
among others. External obstacles, on the other hand, are related to economic, social, financial,
technical, and other factors. SASOL has used PESTLE analysis to carry out its analysis, which is
mentioned below:
 PESTEL Analysis of SASOL-
 PESTLE analysis is a method and procedure that helps organisations assess their different
conditions that have an effects on the business functions and processes. SASOL managers may
design processes, plans, and strategies that are suitable for the conditions that exist at any
given time by completing an analysis. The following is the PESTLE analysis for SASOL:

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 Economical: This category includes characteristics that are related to the country's and
organization's economic situation. In this case, labour cost has a significant impact on
decision-making and supermarket activity. For workers above the age of 25, the minimal pay
rate in the United Kingdom has been increased by 4.4 percent as of 2018. As a result of this,
the wage budget for SASOL, which is in the millions of pounds in the UK, has risen. This
demonstrates that changes in economic conditions have a similar influence on organisations.
 Social:Customers' behaviour changes with regard to time and trends as a result of same-day
delivery of services and products, and they anticipate a flexible return policy. Aside from that,
people like to do all of their shopping in one place. In terms of SASOL, they effectively analyse
client's needs as well as demands and build strategic plans in response. They will be able to
keep and attract clients for a longer amount of time as a result of this, which will lead to
suitable business development. According to PWC study, there really are around 65 percent of
shoppers in the United Kingdom. Individual businesses can develop successful and close
relationships with their clients as a result of this.

Encounters of Globalisation and
strategic tasks of administration
 .
 Globalisation aids businesses in carrying out their activities efficiently. This
organisation is capable of carrying out their complete process and formulating
plans based on it. It also poses difficulties for them because their work is
disrupted. These difficulties are listed below:
 Job mobility: As a result of globalisation, many companies are relocating their
manufacturing operations to developed nations, causing individuals to lose
their employment.
 Cultural variety is being lost as culture is traded, which is a wonderful thing,
but individuals are losing their distinct and individual characteristics. SASOL
must do a market study and evaluation in order to mitigate the effect of
problems.

Recommendations
 Following an analysis of the complete scenario, several important
recommendations are made to SASOL on how to handle problems and concerns
in an effective manner so that their firm may grow in an appropriate manner.
For this, businesses must respect the beliefs and cultures of the nations in
which they will be providing services. The reason seems to be that they are
capable of developing policies and plans in the needed manner. Apart from that,
they ould be able to evade challenges that they encounter while presenting
their business to the proper organisation, allowing them to remain relevant and
effective in the market. Furthermore, they should hire people from the nation in
which they intend to develop, as this will aid them in carrying out their
company in accordance with the country's standards and demands. SASOL may
execute and operate their company activities more efficiently by utilising this.


Conclusion
 According to the aforementioned paper, there are several sorts of elements
existing in a corporate environment that have a significant role in influencing
organization tasks and processes. These elements have both good and negative
effects on a business unit. As a result, it is critical for businesses to improve their
effectiveness by utilising a variety of strategies and policies, as this will enable
them to expand their total market share as well as their opportunity area.

References
 Agarwal, J., 2018. Women Entrepreneurship in India: Problems & Essential Strategies.
 Bandera, C., Collins, R. and Passerini, K., 2018. Risky business: Experiential learning,
information and communications technology, and risk-taking attitudes in entrepreneurship
education. The International Journal of Management Education, 16(2), pp.224-238.
 Costa, S.F., Santos, S.C., Wach, D. and Caetano, A., 2018. Recognizing opportunities
across campus: The effects of cognitive training and entrepreneurial passion on the
business opportunity prototype. Journal of Small Business Management, 56(1), pp.51-75.
 Cunningham, J.A. and Menter, M., 2020. Micro-level academic entrepreneurship: A
research agenda. Journal of Management Development.
 .

Thank You