Global Business Environment Analysis and Strategic Challenges Report

This report provides a comprehensive analysis of the global business environment, using SASOL Limited as a case study. It begins with an introduction to globalization, its driving factors, and the impact of digital technology. A PESTLE analysis is conducted to assess the organizational context, followed by an examination of the challenges and strategic complexities that SASOL faces in the global market. Recommendations are offered to mitigate these challenges. The report further explores SASOL's culture, structure, and governance through McKinsey's 7S model and applies Hofstede's dimensions of culture to evaluate its impact. Ethical and sustainable factors within the global market are assessed, along with factors influencing decision-making and strategic expansion routes, including their advantages and disadvantages. The report concludes with a summary of key findings and recommendations.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1. Concept of globalisation.....................................................................................................1
2. Driving factors of globalisation..........................................................................................2
3. Significant impact of digital technology upon globalization.............................................2
4. PESTLE analysis of an organisational context..................................................................3
5. Challenges of globalisation and the strategic challenges for an organisation....................4
6. Recommendations in order to reduce these challenges......................................................5
PART 2............................................................................................................................................5
1. Explanation of the culture, structure and governance of an organisation. By using
McKinsey's 7S model in the organisational context..............................................................5
2. For applying Hofstede's dimensions of culture to determine that how organisation has been
affected...................................................................................................................................6
3. Evaluation of ethical and sustainable factors about organization within the global market.. .7
4. Factors influenced decision making within the global context..........................................8
5. Strategic expansion routes as well as advantages and disadvantages within the organisation.
................................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11

INTRODUCTION
Global business environment can de identifying as the different kinds of external forces
that all are comes under the business organisations and affect their decision making process in an
effective manner. On the other side organisations faces several kind of challenges as well as
opportunities in the economic, social and political environment. All these kind of external
environment have been developed by the turbulence, uncertainty and discontinuity across the
globe. According to the global context, it is affected by the different strategies and external
environment in an effective manner. For the better understanding of this topic, SASOL limited
has been taken for this present assignment. This is an integrated chemical and energy company
which is based on the Sandton, South Africa and it was founded in the year of 1950. Further
discussion will be made on the different key factors which mainly drives the company and
strategic complexities which is associated with the global environment (Alkhafaji and Nelson,
2013). Along with this, global market affects the structure, functions and culture of an
organisation will get covered. At last, determine the factors of influencing organisational
decision making and several strategies in the context of selected firm will explain in this
assignment properly.
TASK 1
P1. Define cost factor, market environment and competition as well that drive in the trade and
global commerce.
Globalisation is the process of exchanging of goods and services, different technologies
and effective information from one place to another place in an appropriate way. Globalisation
always influence the functions of business at each level into the working place. It occurs when
the standard of living changed as well as low development in the country. Along with this
changes of job automatically reduced from particular country. On the basis of this people need to
interact with each other from different countries in order to make good relations with other to
achieve their opportunities within the competitive environment. At the other side of this topic,
globalisation is a sort of process in different market such as capital, oil, gold and commodities. In
reference to the Sasol, they are maximising their profitability, marketing share in order to gain
competitive advantages in an effective way.
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Therefore, this can be said that there are different type of opportunities for people who
are always looking for the job in the countries as globalisation is the kind of changing
environment so people can face few problems but they are able to achieve their goals as per the
current scenario in the working environment. By using this sort of tool each and every
organisations have various kind of factors which helps them to gain profitability for an
organisation so that they can increase their working skills in a proper manner. This heavily
impact on the other people in a positive manner. Therefore, globalisation is the effective process
within the working environment.
Driving factors of globalisation:
In the present scenario, there are several kind of factors which positively affects the
overall functions of the companies in a proper way. Driving forces mainly affects the
organisation's expansion business that comes in cost, marketing factor, advancement of
technology and so on. These factors are listed below:
Cost factor: There are several kind of factors which comes under the cost in several
countries. In which cost identifies the labour, production, sales and production as well. In
reference to the SASOL limited, they always gives their first priority to cost as they prepared
several kind of chemical globally (Amran, Lee and Devi, 2014). Therefore, they need to consider
cost for their shipping goods to gain achievements.
Marketing factor: As per the domestic market they have few conflicts related to price in
the past years. But they always offered good opportunities to people in the global expansion of
market. According to the SASOL limited, they are able to take market shares from another one in
order to accomplish consumer's needs to increase their market.
Environmental factor: It is the process in which every company operates their business
at higher level. These are mainly includes in the political, legal, social and technological.
Therefore, Sasol mainly create their own strategies according to the current environment in order
to tough competition for maintaining their business at higher level.
Competition factor: In order to expand business in another country it can be little bit
difficult as present time there are various companies who are working for the same scenario.
Therefore, Sasol need to acquire higher technologies and good skill in order to gain competitive
advantage due the expansion of business.
Significant impact of digital technology upon globalization:
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Digital technologies develop the good platform for each and every company by which
they can generate different type of effective tool and techniques in order to satisfying their
consumer's in a proper way. Generally, it includes in the various kind of tools and technologies
like software's, online websites to manage their company's operations in an effective manner. In
context with globalisation, digital technologies have positive impact on the companies so that
they can get profit in the globalisation environment. On the basis of digital techniques people can
interact with each other by using online social sites and so on. Along with this buyers and sellers
also can communicate easily without any issues in a proper way.
In reference to the, SASOL as they are making chemical product n order to gain
competitive advantages in the working place. So that they need to opt different new and unique
technologies by which they can get any kind of idea for expanding their business in a proper
manner. On the basis of using digital techniques employment of an organisation can make them
effective and unique in front of others. Therefore, globalisation affects the overall activity of firm
by which they can make good profit in order to gain people trust and future opportunities.
There are various factors of globalisation which impact on an organisation function and
operations, from which some major of them are mentioned below:-
 International economic integration: It refers to an arrangement which is done among
the diverse location or area which help in removing or minimising trade barriers. Through
this there is development of monetary and fiscal policies. In respect of SASOL limited
by this they able to conduct trading at international level in effective manner.
 Foreign Direct Investment: It is define as a form of investment which help in control
ownership on a business at a particular country along with conduct work in another
country. By this respective company able to operate their business in other country in
appropriate manner and they also able to earn huge profitability ratio.
 International Business and Trade: It refers to situation when a company conduct
international trade of good, technology, services, funds, knowledge and so on across the
nation boundaries. This will help SASOL limited to expand their business operations as
well as function at global basis in appropriate manner.
Through these factors of globalisation SASOL limited get affected in positive manner
because through this they able to expand their business properly and operate it effectively which
leads to attainment of high profit.
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There are also several digital revolution which impact on globalisation and help company
in conducting their work in effective and appropriate manner, some major of them are explain
below:-
 e commerce: It refers to procedure which is related to buying and selling procedure of a
company. According to this when a company adopt e commerce they able to offer their
products as well as services through online medium. In resect of SASOL limited through
e commerce they able to conduct their business through online medium.
 Social media: It refers to medium which is generally adopted by a company in order to
advertise about products and services. Through this they also able to attract huge ratio of
potential customers. By this SASOL limited able to promote their business in effective
manner so that they attract more and more customers.
Through these digital revolution SASOL limited able to expand their business in
international market in effective manner. This will also help them in attracting more and more
customers and attaining huge profitability ratio as well as market shares.
TASK 2
P2 Complexity of strategic challenges which is faced by the organisation while operating a
global environment with suitable examples.
Globalisation is very helpful aspect for each companies as it helps to conduct proper
work in an appropriate manner. On the basis of this company always available to run their
business in a proper way. It also focuses on the different challenges which is faced by companies
so that globalization helps them to improve their works in a proper manner. There are different
kind of strategic challenges and issues drives from the globalisation, those are given below:
Loss of cultural diversity: On the behalf of this culture, exchange in the globalisation is
good but in the same way some countries looses their effective functions.
Cost of expanding: In order to expansion of business than company needs to spent more
money. Along with this they need to make effective product and services as per the marketing
situation so that they have to analyse their each function properly.
Quality of jobs: When the globalisation occurs than organisations require to develop lots
of opportunities for people as they looses their jobs in countries.
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Therefore, it can be said that SASOL limited require to analyse the market condition due
to the globalisation so that they can face any kind kind of challenges which are discussed above.
That's why this representative organisation need to create effective strategies or techniques to
ignoring sort of challenges effectively (Cheng, Green and Ko, 2014).
Overcome these challenges:
According to the above analysation it has been recommended that SASOL limited should
apply effective and attractive strategies in order to overcome their challenges so that they can
achieve their goals effectively without any issues in the working place. When this selected
company will apply effective growth than they are able to know the market scenario and also
grab the opportunities in a proper manner. With the help of this, employee's from the different
countries they can expand their business by observing the market condition. In order to run
business in a smooth way than this respective company needs to analyse every aspects in a
proper way.
International trade laws: These are the combination of laws as well as agreements that always
happen between the countries and commerce. Wherein, international trade law mainly develops
the rules in between the countries or business in order to do business across borders in an
effective manner.
Currency exchange rates: In the term of finance, these kind of rates refers to those currencies
which will be exchanged for another. It mainly considers as the value of one country in relation
to the another currency.
Inflation: It refers to the quantitative measures of the rate which is also considered as the
average level of price for the selected goods and services for the one period of time and in
enhance the unit of currency in the general level.
National income: It is the overall aggregate of money values of income which is mostly earned
by the business firms and individuals within the firm. It can be defined as the measurement of
money in order to aggregates of overall commodities within the marketplace.
Tariffs: It refers to the tax value which is applicable on imports and exports between the
different states. It is also the regulation of foreign trade that mainly taxes on the international
products which always encourages the domestic industries and provide them full of securities.
There3fore, it is much important and effective.
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Subsidies: These are kind of the financial terms which is always support to the economic sector
within the economic situation. Therefore, by using this scenario, people can manage their NGOs.
TASK 3
P3 Influences of globalisation on the governance and leadership, structure and functions or
culture as well.
In order to make effective organisation, manager is required to adopt different kind of
things to achieve goals effectively. There are some aspects which all are followed by the SASOL
limited, given below:
Culture: It is a type of norms and social behaviour within the human societies in which
SASOL limited company follow different culture as per their employee's in a proper manner.
Therefore, it affects organisation in a positive way.
Structure: It is the arrangement and interrelated elements of the organisation in which
SASOL limited manage their operations effectively.
Governance: It refers to the process of governing different kind of aspects like social
media, formal and informal organisation, any state and so on. In reference to SASOL limited
they developed effective creation to interact with people properly. Therefore, they can make
better decision for an organisation (Coltman and et. al., 2015).
In context with SASOL, globalisation is different thing which comes from one aspect to
another and also explained the McKinsey's model to find out the company's strategies
specifically, there are some elements of this model, are listed below:
 Strategy: This is the part of hard approach, which develops competitive advantages in
order to reduce few barriers in order to maintain the level of company at higher level. In
reference to the SASOL, they are adapting unique techniques to improve their situations.
 Structure: It is totally based on the structure of business that defines the authority,
delegation and communication. Wherein, SASOL limited fix their goals to achieve their
targets.
 System: According to this, companies are required to maintain their services and
operations effectively. Wherein, SASOL limited using interpretative tool according to the
organisational needed.
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 Shared value: It is the kind of soft approach in which goals are completed by people
within the organisation. SASOL limited manage their works according to the shared
information with employee's.
 Style: According to this organisation performs their activities in a effective way. Where,
SASOL limited company control their function in an attractive styles (Daley, 2012).
 Staff: As employee's are the very important part of every organisation so that each
company should have effective planning for them to achieve goals. As per the SASOL
limited they are providing training programmes to their employee's in a proper manner.
 Skills: Skills is based on t5he employee's knowledge like it depends on hard work,
innovative work, creative nature and so on. For this SASOL limited check their
employee's skills in order to encourage and motivate them towards achieving goals.
For applying Hofstede's dimensions of culture to determine that how organisation has been
affected:
In order to applying Hofstede's model related to culture, which can be influence SASOL
limited company's functions in a positive way, 6 dimensions are given below:
 Power distance index: It refers to the equalities which can be ignored by the individual
with the power and without power. In which SASOL limited has power to allot work to
their employee's in order to achieve goals.
 Individualism Vs Collectivism: In this work is done by the group members and
individuals to attain the goals and objectives. In which selected company fix their target
in a proper way.
 Uncertainty Avoidance: In this team members feels not good so that this condition
develop negativity in the organisation. Due to the globalisation process of decision
making get influenced of SASOL limited people.
 Masculinity Vs Femininity: It means male or female workers are the same there is no
difference so that it influence SASOL limited company towards gaining better result in a
proper way.
 Long Term Vs Short term orientation: It is also known as union relationship which
selected organisation mainly follows for completing their achievements.
 Indulgence Vs Restraint: As per this selected company works according to their
employee's comfort zone.
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P4 Influences of ethical and sustainable factors about organization within the functions of an
organization.
Ethical globalisation: It is the process of transferring different kind of products and
services, accurate information with the help of ethical globalisation in order to motivate
customer's, stakeholders, employee's to achieve goals.
Sustainable globalisation: It refers to the process of expansion of business across the
world which will enhance the sustainability within the competitive market to meet targeted goals
perfectly (Dubihlela and Sandada, 2014).
There are some organizational functions which is followed by the SASOL limited
company in both ways ethical and sustainable. Are given below:
Human resource: It is the best aspects for an management system of selected
organization in which they can provide several programs to their employee's in order to increase
their working efficiency to achieve effective goals in a proper way.
Finance: This system help SASOL limited in order to achievements in a better way. In
which selected organization able to provide guidelines to their employee's so that they can use
company's fund in a proper way.
Marketing: It is the effective tool of every company in which SASOL limited company
set their objectives according to their marketing scenario in order to run business effectively by
using appropriate strategies to achieve desired goals in a proper manner.
According to the above identification it has been analyzed that all the above elements are
very effective and essential to manage company's situations in a proper way. Therefore, both
ethical or sustainable are effective to use within the global market.
TASK 4
P5 Different ways of decision making within the global context.
In the present context, there are different kind of decision making factors in order to
influence company's decision in a better way. Decision making always depends upon the
effective situation in order to improves the changes within the company. In reference to the
SASOL, they are using effective decision making process in order to influence people within the
market in a perfect way. Therefore, this process of decision making can be divided in few aspects
like develop decision, situation analysis in order to resolved the issues in an effective manner.
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Therefore, this can be said that due to globalisation decision making can be affected by
the negative aspects in which SASOL is not able to take proper decision in an appropriate
manner. That's why it is much effective or attractive in front of other people with the help of this
company can achieve their oriented goals in a proper way.
PESTLE analysis of an organisational context:
It refers to those practices in which companies can follow different type of environment
in the business operation in order to influence people with the current scenario properly. There
are some factors which are followed by Sasol, given below:
Political factor: According to the SASOL, they can get affected by this factor in a
positive way. With the help of this they can increase their sales and revenue. But some time it
can be risky for them like sudden changes in the environment that influence the decision making
process within the company. As this factor includes in several governmental issues and taxation
rates which helps organisation in a effective manner. For making better option company need to
run according to the current scenario effectively (Bititci, Cocca and Ates, 2016).
Economical factor: These factors are includes in the different changes in the economy as
well as business organisation like foreign exchange rates, inflation rates, interest rates and so on.
In context with Sasol limited they wan to make their organisation very effective that's why they
invested more in order to gain much profitability within the specific period of time.
Social factor: These factors directly influencing SASOL limited in a positive manner as
they are encompasses several culture, beliefs, values, norms as well as population they are
holding all these as community. These kind of factors are included in the social aspects like life
style, population within the organisation. On the basis of this, company is able to classify their
different teams in a various scenario by which they can make department for several aspects.
Environmental factor: In the present world, several industries are operating their
business operation in a different standards in order to protect from environmental factors. These
are includes in different groups, society, people and so on. Therefore, company needs to have
several target in order to influence their customer's in an appropriate manner.
Technological factor: In order to gain competitive advantage SASOL limited has to
adopt such kind of new technologies factors like online websites, social media, e-mail, Instagram
and so on by which they can advertise their firm and grab the potential customer's in a proper
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