Global Business Environment: SASOL's Strategy and Expansion Routes

This report provides an in-depth analysis of SASOL's global business environment, focusing on the impact of organizational structure, culture, and governance on its global operations. It examines how these factors influence SASOL's ability to adapt to changing business environments and gl...Read More

Unit 18 Global Business
Environment

TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
PART A...........................................................................................................................................4
(Covered under PPT)..................................................................................................................4
PART B............................................................................................................................................4
Explaining the structure, culture and governance within SASOL..............................................4
Analysing above factors influence on global operations............................................................5
Applying Hofstede dimension of culture....................................................................................6
Analysing ethical and sustainable factors that organisation need to consider in globalization.. 7
Analysing strategic decision making in relation to risk and diversification...............................9
Range of strategic global expansion routes available to the organisation................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Global business environment consists of various factors that business needs to consider to
conduct various operational activities in smooth and efficient manner. Also, the present report is
based on SASOL that is fastest growing energy company and is planning to expand its work in
other regions. Moreover, the study will focus on importance of structure, governance and culture
in delivering high quality of products to its targeted customers. Furthermore, the study will
identify how SASOL has influenced and adapted to the changing business environment and
needs of global markets. Also, the report will focus on importance of understanding work culture
and objectives of different markets through applying model. Moreover, certain ethical and
sustainable factors that business needs to consider on daily basis will also be covered under this
report in detail. Lastly, critical evaluation of strategic decision making in assessing total risks and
diversification of the business will also be analysed under this study.
MAIN BODY
PART A
(Covered under PPT)
PART B
Explaining the structure, culture and governance within SASOL.
Every organization has specific structure that helps in giving more clarity in carrying out
certain business operations and helps in better decision-making in long run. There are various
types of organizations structure that are incorporated by the firms baaed on the objectives it
wishes to achieve in the future. Also, some organization structures are functional, Hierarchy,
divisional and matrix (Alnsour and Kanaan, 2021). Moreover, firm like SASOL proper
organization structure is developed where all the roles and responsibilities are designed
according to the business units that are present within the firm. Moreover, leadership team is
based on the certain projects and subsidiaries that wished to be achieved by each business unit.
In context of culture it can be said that it defines the way of living based on certain
knowledge, beliefs and behaviour of the individuals. Also, it is very important that culture of any
organizations is very good so that positive environment could be maintained and all work could
be carried out smoothly (Berger‐Walliser and Scott, 2018). Moreover, a better work culture

ensures that productivity is maintained at higher levels and employees are able to maintain better
job satisfaction and loyalty towards the supervisors that also reduces the chances of conflicts.
Moreover, it could be better explained through applying MC Kinsey 7 s model that
consists of elements such as structure, strategy, system, skills, style, staff and shared values. In
structure the SASOL designed chain of commands within workplace so that work could be
carried out smoothly (McKinsey 7S Model, 2022). In strategy a well formulate plan is
established by SASOL so that competitive advantage is gained in the future. Further, in systems
the quoted firm establish proper work flow based on which effective decision-making is done.
Moreover, in skills various competencies and capabilities are developed within individuals so
that certain objectives could be accomplished. Furthermore, in MC Kinsey style element proper
code of conduct is established by quoted firm so that work could be carried out in the best
manner. In case of element of staff SASOL carries proper talent management activities for
establishing effective training, recruiting and reward systems at the workplace. Last in this
framework are shared values where company vision, mission statement is clearly defined so that
better organizational design could be formed.
Analysing above factors influence on global operations.
To generate greater revenues in future and attract more potential users every firm develop
policies related to global expansion where it would create opportunities to operate in different
regions. Furthermore, in context of organization structure it can be said that SASOL is one of
the fastest energy growing company and it is following hierarchical organizational structure
over long period (Boateng and et.al., 2021). Also, through following this structure the
organization have one power group at the top with subsequent levels at below. Moreover, this
structure has allowed SASOL employees to gain specialization in different areas and skills.
Furthermore, the quoted firm has been able to establish clear lines of authority that also kept
employees motivated for longer time period. However, this structure has certain disadvantages as
chances of lack of collaboration among the SASOL employees are always greater. Also, the firm
might lose internal innovation as it creates rigid structure and employees might face
communication barriers that are not good when the firm is planning to expand into newer
regions.
Culture is also very important aspect that SASOL needs to consider while developing
any kind of global strategy as expanding to newer regions it is very important that highly

qualified individuals are recruited in the firm so that number of activities and difference among
the individual in the new markets could be easily recognized and knowledge could be shared
among various groups in systematic manner without creating any kind of conflicts (Bower,
2017). Also, SASOL needs to develop those organization policies that respect each diverse group
and its opinions so that chances of future conflicts are very less and there is increased
understanding among the people.
Governance is defined as system through which any organization is controlled or
operated. Moreover, SASOL needs to ensure that proper governance is developed so there is
efficient risk management, proper compliance to organizational rules and administration of
certain activities of the firm. Also, in quoted firm people who are in power need to be
accountable and responsible for conduct of various activities at the workplace. However, it
would be difficult for SASOL to adapt to changing laws and rules while expanding into new
regions and therefore it is very important that firm involves transparency in its working so that
various activities are carried out efficiently without facing many difficulties (Christensen and
Kowalczyk, 2017). Also, the firm might adopt for developing better strategic plans through
collecting decisions from various employees so that proper reports, budget and costs could be
prepared for target market. Thus, all these factors need to be closely analysed and evaluated by
SASOL so that greater organizational success and growth might be achieved through
globalization.
Applying Hofstede dimension of culture.
It is the framework that helps in understanding differences in cross cultures and evaluates
how work is carried by any firm across various cultures. Moreover, it is based on six elements
that are briefly described as follows:
Power distance (35): It is degree to which less powerful members of the country
believes that power is distributed unequally. Also, in UK this rank is lowest as people who mean
that people have sense that there is fair play within the country and thus all the rules need to be
strictly followed and abide by people (Falk and Hermle, 2018). Also, SASOL have to strictly
follow all the rules and establish clear line of authorities that would allow the firm to conduct
smooth business operations in other regions.
Individualism (89): It is interdependency of individuals among the members of society.
Also, a higher degree in UK means that people are more concern about individual choices rather

than group choices. Hence, all products are made according to specific groups rather than
collective choices. However, for SASOL this might create negative impact while operating in
different society that works more on collectivist approach rather than individualist approach.
Masculinity (66): It states that society is driven more by achievement, success and
competition. This factor is also very high in UK that means various firms compete with each
other to sustain in the market for longer time and stay ahead in competition. This is positive
factor for SASOL as it would incorporate regular innovation and creativity even while expanding
into different markets (Gechkova and Kaleeva, 2020). However, if in any region there is high
feminine factor than dominant value would be to live more quality life and caring for others
which might create certain difficulties in operations for SASOL.
Uncertainty avoidance (35): It defines a culture that has fear of unknown situations and
always tries to avoid it when possible. Thus, for UK this factor is very low that means that
country is interested in enhancing creativity and innovation and for this purpose it encourages
more of outside forces to be flexible develop creative minds to start up any new business in the
country (Hofstede’s insight, 2022). Also, it is positive factor for quoted company as it would be
able to overcome certain challenges from its rivalries while working in new markets or regions.
Long term orientation (51): It is how society maintains links with its past connections
to deal with current present and future challenges. Also, in UK it can be said that it is very good
score which means that companies are very careful while making certain choices and decisions
and so SASOL would also develop policies that are better than the pasts.
Indulgence (69): It is defined as degree to which people are able to control certain
impulses and desires. A high score in UK means that people are able to control certain desires
and emotions due to which individuals tend to have positive attitude towards various situations
and problems. Moreover, for SASOL this factor might be quite challenging as to operate in
different regions it need to carefully analyse various needs of the people so that any party of
group of person is not dissatisfied with the company actions and way of working.
Analysing ethical and sustainable factors that organisation need to consider in globalization.
Ethical refers in doing the right thing through developing standards so that the company
might be socially responsible for all the activities that are conducted within the organisation or at
workplace. For the company like SASOL it is also very important that socially ethical practices
are been followed at the workplace so that maximum output and productivity could be achieved

from its employees. Also, there are various types of ethical and sustainable factors that company
needs to strictly follow to achieve greater success globally:
Standard working conditions: It is very important that SASOL develops better working
culture environment where all the activities are conducted in systematic manner and roles and
duties are clearly defined as per the industry norms and regulation. Thus, considering such
factor would allow the firm to not only attract talent people while working globally but will also
help in retaining the best talent for the firm in long run.
Workplace diversity: To successfully work in global environment it is very important
ethical factor that SASOL need to consider so that more people are respected and encouraged to
work in the firm in different regions (Geddes and Jin, 2018). Also, maintaining the workplace
diversity is very essential so that conflicts could be minimised and better outputs are delivered.
Income inequality: To work in sustainable manner it is very important that there is no
income inequality among the workers of the firm. Also, gender biasness might impact the
productivity and output levels of the firm that also harms goodwill of the firm for longer time
period.
Focus on innovation: To work globally and in sustainable manner it is crucial that
company is focusing on innovation so that maximum revenue is achieved in limited time. Also,
innovation could be done in various forms by SASOL depending upon the goals it wants to
achieve in the target market. Moreover, innovation would allow quoted firm to use various
resources in best of manner without any kind of wastage.
Environmental policies: SASOL need to consider this factor while working in any target
market as it is very important that while carrying out any business activities minimum
environmental damage is caused so that resources are not wasted and company could be
classified as socially responsible for conducting any future activities.
Flexibility: To be ethically responsible firm it is necessary that the firm is flexible in its
working operations so that future challenges could be solved easily (Hong and Cheon, 2017).
Also, SASOL flexibility would ensure that firm is carrying the activities in proper manner
without any type of conflicts and misunderstanding among the people. Also, in quoted firm
flexibility could be achieved only when organisation structure, policies, leadership etc. are
changed to the great level while working in any of the targeted market.

Privacy: This ethical factor is also important while working in different regions of the
country. For firm like SASOL it need to ensure that employees maintain confidentiality of
information so that data is not misused by any of the third party and also there is no kind of false
representations of the data against the law or government body.
Analysing strategic decision making in relation to risk and diversification.
Strategic decision making helps the firm to achieve the bets results in limited time period.
Also, strategic decision making is done by top management so that certain complex task could be
achieved in easiest manner. Furthermore, while making any kind of strategic decision SASOL
need to keep in mind that the amount of risk and benefits is already estimated so that accordingly
resources could be acquired and work could be carried out. Moreover, while diversifying any
kind of business activities either in form of new product line or working in completely new
regions it is very important that proper administrative and operational decisions are undertaken
so that welfare of the employees and factory growth could be maintained over the years. Also,
according to Kristjánsdóttir and et.al., (2017) strategic decision making strengthens the
organisations directions and improves the operational efficiency to the great level . Moreover,
effective strategic decision helps the firm to become more profitable than other competitors
working in the market as it closely identifies the needs and wants of the customers through better
marketing plans. However… on other hand stated that it is very time consuming and costly
process as extensive market research need to be conducted and hence if any firm makes
ineffective strategic decisions than it might lead only to wastage of resources and decision
making that might not allow the firm to run for longer time period in the target market.
Moreover Lee Song and Hong, (2019) said that every business needs to undertake certain
risks to become successful later in the business. However, taking too many risks might only
reduce the efficiency of the firm to conduct best of activities achieve greater business goals.
Thus, SASOL need to analyse the total cost, budget, risk and available funds before making any
kind of strategic decisions so that better opportunities could be grab in the future. Also, the risk
could be only diversified when company expand its operations globally at various levels that
would ensure firm that revenue is generated regularly from various areas. Moreover…argued
that firm needs to involve lower levels employees while making any kind of strategic decisions
as it might give better ideas and suggestions for making certain changes or improvement in the
existing policy. Thus, it would help the firm devising those policies that are better than the

competitors and would also help the firm in achieving systematic growth and earn higher
revenues.
Range of strategic global expansion routes available to the organisation.
To work in various regions it is important that organisation uses various sources through
which it might operate in the new environment easily. Furthermore, there are various types of
expansion routes that are available to the SASOL that would allow it to achieve greater
organisational success in limited time period. Moreover, these expansion routes are described in
detail as follows:
Exporting: It is the easiest and safest ways that could be adopt by the firm to expand its
operations in other regions. Also, exporting of the goods is least expensive method that does not
allow much effort’s to be put in (Hamilton and Webster, 2018). Moreover, marketing of the
goods is also done by third party that also reduces the burden of the parent company to advertise
it products in that region. However, too much dependency on the distributors would only result
in losses for the firm that also sometimes cause difficulty for the firm to work efficiently in host
country.
Licencing: It is method in which one company give right to another company to
manufacture its own products for certain time period. This method is also popular and could be
used by SASOL as it does not have to incur additional costs of promoting or selling the product
in the target market (Zakaria, Abdul-Talib and Amelinckx, 2020). Also, licensee has knowledge
of the existing market and hence it would devise better policies that would sell the products of
the company in much easier manner. However, major limitation is that SASOL would receive
only portion of profits form the total sale of the products and the firm is likely to lose control
over the product over the course of time
Partnership: It is combination of two or more firms that have agreed to share profits of the
business equally or on some ratio so that greater efficiency is achieved and higher revenues
might be generated for the firm that is planning to wok globally. Also, through partnerships the
firms would be able to share better understanding and knowledge of the target market that would
lead to effective decision making (Kasemsap, 2018). However, quick decision making is not
done in this method as consent and approval of all partners is required. Also all the partners
share unlimited liability and such type of business is uncertain as there is higher chances of
instability in the business.

Thus above are some methods that might be opted by SASOL to operate in various
regions. Also, there are other methods such as franchisee, mergers and acquisitions, in house
expansion etc. that could be opt by various firms based on certain future objectives. However,
the one that would be best suited for SASOL might be licensing through which the firm need not
carry out extensive market research of each areas where it is planning to expand. Also, it would
save the additional costs and time that would be involved in setting up plant in targeted market.
CONCLUSION
From the above report it can be concluded that conducting the business globally is important
for the survival and growth of any business. Also, the report had identified the importance of
structure, culture and governance within SASOL through MC Kinsey model of framework so
that working of the firm could be known. Moreover, the study had analysed influence of such
factors on the overall working of the firm in long run. Furthermore, current UK environment and
factors affecting the SASOL had also been identified through Hofstede dimension so that better
efficiency and productivity might be achieved in the future conduct of activities by the firm.
Also, various ethical and sustainable factors such as privacy of data, better working conditions,
equality etc. had been discovered that would help quoted firm to achieve greater organisational
success. Lastly, significance of strategic decisions in risk and diversification along with certain
recommendations for SASOL had also been covered under this report in detail.

REFERENCES
Books and Journals.
Alnsour, A. and Kanaan, O., 2021. The effects of financial and non-financial incentives on job
tenure. Management Science Letters. 11(3). pp.729-736.
Berger‐Walliser, G. and Scott, I., 2018. Redefining corporate social responsibility in an era of
globalization and regulatory hardening. American Business Law Journal. 55(1). pp.167-218.
Boateng, A. and et.al., 2021. National culture, corporate governance and corruption: A cross‐
country analysis. International Journal of Finance & Economics. 26(3). pp.3852-3874.
Bower, J. L., 2017. Managing resource allocation: Personal reflections from a managerial
perspective. Journal of Management.43(8). pp.2421-2429.
Christensen, B. J. and Kowalczyk, C., 2017. Introduction to globalization: Strategies and effects.
In Globalization (pp. 1-16). Springer, Berlin, Heidelberg.
Falk, A. and Hermle, J., 2018. Relationship of gender differences in preferences to economic
development and gender equality. Science.362(6412).
Gechkova, T. and Kaleeva, T., 2020. The mckinsey 7s model in the airport system protection.
Knowledge International Journal. 42(5). pp.843-848.
Geddes, C. E., Li, H. and Jin, X., 2018. Optogenetic editing reveals the hierarchical organization
of learned action sequences. Cell. 174(1). pp.32-43.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hong, Y. Y. and Cheon, B. K., 2017. How does culture matter in the face of globalization?.
Perspectives on Psychological Science. 12(5). pp.810-823.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Kristjánsdóttir, H., and et.al., 2017. Hofstede national culture and international trade. Applied
Economics. 49(57). pp.5792-5801.
Lee, J., Song, H. D. and Hong, A. J., 2019. Exploring factors, and indicators for measuring
students’ sustainable engagement in e-learning. Sustainability. 11(4). p.985.
Zakaria, N., Abdul-Talib, A. N. and Amelinckx, A., 2020. Advancing cultural frontiers to
champion global business in emerging markets. In Transcending Cultural Frontiers (pp. 1-10).
Springer, Singapore.
Online
Hofstede’s insights. 2022. [Online]. Available through: <
https://www.hofstede-insights.com/country/the-uk/>.
McKinsey 7S Model. 2022. [Online]. Available
through:<https://corporatefinanceinstitute.com/resources/knowledge/strategy/mckinsey-7s-
model/>.