Global Business Environment Analysis: SASOL Strategic Report

This report provides a comprehensive analysis of the global business environment, focusing on the South African energy and chemical company, SASOL Limited. It explores key drivers of globalization and their impact on business operations. The report applies McKinsey's 7S model to examine SASOL's culture, structure, and governance, and evaluates ethical and sustainable factors within the global market. It utilizes Hofstede's cultural dimensions to understand how the organization is affected by cultural differences across various countries. Furthermore, it examines the factors influencing decision-making processes and evaluates strategic expansion routes, including exporting and licensing, along with their respective advantages and disadvantages. The analysis provides insights into SASOL's strategies for navigating the complexities of the global business landscape.

Global Business
Environment

Table of Contents

INTRODUCTION
Global business environment refer to the interaction of business with outside stakeholders
in order to take the necessary decision and influence the decision making process. It is risky to
engage in external environment and carry out the functioning of business due to influence of
external factors which can hinder the ability to perform operations effectively. Certain factors
such as innovation in existing technology, preferences of customer and government regulation
directly or indirectly hamper the performance of business. To better understand the concept of
global business environment, SASOL limited company has been selected which is energy and
chemical company of South Africa. Due to the fast growing size the company has expanded its
operations in various areas like Canada, Australia, Mozambique as well as plan to expand in the
other countries as well. This report cover topics like analyse the key factors that can drive to
globalisation. Along with that determine strategic complexities which are associated while
operating the business environment. Moreover, evaluate the influence of global market within
the structure, culture as well as functions of an organisation. Further, evaluation of the influence
of globalisation within the decision making and formulating strategy are covered in the report.

PART 1

PART 2
Explanation of culture, structure and governance by using McKinsey's 7S model
To attain the ultimate goals and objective of an organisation the manager need to draft
the suitable culture, structure as well as strategies effectively. McKinsey's model is the suitable
framework that assist organisation to encompasses the use of internal factors in order to prepare
strategy and reinforce the activities fro organisational success (Bititci, Cocca and Ates, 2016).
Thus, there are various aspects ion which the SASOL limited need to focus to people the smooth
business functioning. Explantation of different factors are described below:
Hard elements
 Strategy- Strategies are mainly adopted by the firm to remain ahead of their competitors.
SASOL company analyses the other competitive firm as well as customer in order to
present the effectively performance for adequate functioning of firm. This lead them to
sustain in the market for longer duration.
 Structure- Amongst different structure such as hierarchical and matrix, respected
company follows functional structure. This lead the employee to get work on the basis of
their interest and suitably perform the task under the supervision of functional head.
 System- It means the pattern on the basis of which the manager integrate the new
techniques by upgrading old method or technique into the new ones. This even lead the
SASOLM company to develop their staff for the convenience of company.
Soft elements
 Shared value- In terms of the value existing firm rely on the positive environment that
leads to collaboration and effective accomplishment of tasks. It encompasses the suitable
behaviour or norm that leads to the custom, knowledge, idea as well as belief of the
particular people (Amran, Lee and Devi, 2014). There are different type of culture which
is the part of shared values such as role culture or people culture that differ from one to
other. Within, SASOL limited, task culture issue under which different responsibility area
assigned on the basis of individuals capability.
 Style- As SALOL company operate in different zones so they need to maintain the
adequate leadership style. This help to sustain the position of company. It basically
involve participate leadership style that led the firm to provide the opportunity to
members to maintain long term relationship.

 Staff- SASOL needs the desirable staff that is competitive enough and suitably become
the part of vacant place. So to identify the suitable candidate the responsibility falls under
the shoulder of HR which need to be performance effectively.
 Skills- It refer to the necessary skills and capabilities required to carry out diverse
business activities. Herein, SASOL limited company, makes sure their employees need to
have suitable skills to conduct their task.
Evaluation of ethical and sustainable factors about organization within the global market
Ethical globalisation: It simply means integration of the different guidelines as well as
regulation which are required by the global economy. This is useful for company as it retain
stakeholder interest by delivering them valuable product.
Sustainable globalisation: Sustainable globalisation represent the application of the
viable means that the company need to adopt in order to expand worldwide. This finally assist
the company to take actions in favour of employee, environment as well as society. Thus,
different ethical and sustainable factors which is practiced by the SASOL company is defined
below:
Human resource: This is the essential part of an organization that include functions like
conducting recruitment and selection process, focusing on training as well as performance
appraisal techniques (Eden and Ackermann, 2013). Within, SALOL limited the organization
focuses to invest in their manpower so that they can effectively enrich skills and attain long term
objective.
Marketing: Marketing function comprises of different practices like identifying the
requirement of customer and use of promotional tools in order to generate the information for
innovative product. SASOL limited immensely concentrate in different functions so that the
shared objective can be accomplished effectively.
Finance: Almost all the financial dealing or monetary transaction area taken place under
the supervision of financial department. As they prepare the budget under which the different
department of company need to focus and follow. So to draft any strategy SASOL company take
precaution to minimize the gap between the actual as well as standard position of firm.

Apply Hofstede's dimension to determine that how organisation has been affected
Hofstede's cultural dimension is the framework that is used to understand the culture of
different countries and carry out the functioning of business. It is basically designed to
understand the society as well as behaviour of different people. This include different dimension
to set the business which is described below:
Power distance index: It refer to the extend of inequality that exist due to the different
power shared by the people. The privilege of high power signifies centralised decision making
authority whereas low score leads to decentralised power which is basically followed within flat
organisation so that innovative ideas are shared and generated to attain the organisational goal.
Individualism Vs Collectivism: It represent interrelationship or the integration among
they different member of company. The term individualism represent the individual or personal
task to achieve particular target (Khan and Khalique, 2014). Along with that collectivism is used
to accomplish the team work for the betterment of an organisation. Thus, low score of IDV assist
to develop the capability as well as skill to attain success in order to gain suitable rewards.
Uncertainty Avoidance: This index represent the pattern by which the uncertainty as
well as the chances of ambiguity can be tolerated by the organisation. This help to overcome the
unexpected events. In terms of the SASOOL company experiences low score in UAI index that
reflect it has the high tolerance (risk taking capability) and acceptance for government
regulation.
Masculinity Vs Femininity: The masculinity share the trait like assertive nature and
wealth building. On contrary, femininity have the characteristics like nurturing or modest attitude
to enhance the quality of work. Within, SASOL is the combination of both score as it hire the
aspirant based on their calibre.
Long Term Vs Short term orientation: Both the orientation represent the way by which
society vies the time horizon. Long orientation represent the consistency or persistence in order
to gain huge growth. Whereas, short orientation focuses on quick result that can be attained in
near future. In context to SASOL company usually focuses on the long term orientation fro
diversification.
Indulgence Vs Restraint: This represent the tendency to control business functioning to
attain desired objective. SASOL company concentrate on the high IVR by which it can motivate
the personnel to enjoy their life and remain emotionally stable.

Factors influenced decision making
Decision making is the vital part of business that helps the firm to make the best suitable
choices among the alternatives. This direct the performance of internal department and help the
organisation to move in the right direction (Kirchoff, Tate and Mollenkopf, 2016). For the global
context, this process assist the firm to anticipate the preferences of customer and make viable
decision. Within SASOL company the manager enhances the impact of external factors as well
as internal capability to come up with the solution. This lead the company to distinct its
operations from the other company that deals in similar type of industry. On contrary,
globalisation can act as a hindrances for decision making process like changing tax slabs of
different countries. Additionally, business gets advantage by operating in the area where labour
expenditure are low and political conditions are stable. So the manager of SASOL company can
make effective projects in order to expand its size and diversify in potential market. Therefore,
this leads the form to gain the trust of external as well as internal stakeholders in order to
expands the functioning effectively and in different platform.
Strategic expansion routes as well as advantages and disadvantages within the organisation
Expansion strategy is the useful technique that led the firm to expand its market by
diversifying its business completely to the new market (Eden and Ackermann, 2013). This is the
prime role that assist the internal manager to enhance profitability, market share as well as
customer base.
Exporting: By opting this route the firm itself does not operate the plant in new region
but they depend upon the trading activities such as export and import to sell out the commodities
of firm. This strategic route is suitable for SASOL company as they get opportunity to deliver
commodities within international market.
Advantage
 It emphasize on the portfolio investment that can help the SASOL company to cater the
national and international market and get benefit of economies of scale. Along with that unfavourable external condition at one area does not widely affect the
profitability of firm.
Disadvantage
 It might become complex to abide by different rules and regulation of various countries.
 Tough competition and imposition of high import duties can affect firm's profitability

Licensing: It is the process under which give opportunity to the other firm in order to
enhance the market share across the geographical area on in new territory. In context to SASOL
company can use this method to raise funding and get benefit by stretching customer base.
Advantage
 It acts as a strong source of passive income generated beyond boundaries. It somewhere mitigate the chances of risk associated with diversification due to
involvement of different parties (Owolabi and Makinde, 2012).
Disadvantage
 Leads to huge dependency on the performance of licensor.
 Inter chaos or dispute among licensor and licensee direct affect the offerings.
CONCLUSION
From the above report it has been determine that the term globalisation act as a revolution
that has leads the company to get the wider opportunity on the basis of which they can expand
their operations. This has even let the firm to prepare the vivid strategy and cater the needs of
wide market. There are certain drivers such as advance technology and emergence of competitors
that has leads to diversify the services effectively. Therefore, there are different source for the
firm to expand in the market like the use of licensing and franchising that successfully help to
attain the competitive advantage over others.

REFRENCES`
Books and Journal