Globalization's Impact on Organizational Structure, Culture, Functions

This report examines the impact of globalization on organizational structures, cultures, and functions, using models like McKinsey’s 7S and Hofstede’s Dimensions of Culture. It analyzes how globalization influences organizational governance, leadership styles, and ethical practices, focusing on SASOL as a case study. The report further explores the effects of ethical and sustainable globalization on organizational functions, including human resources, finance, and marketing. It discusses effective decision-making strategies in a global context and various routes and barriers to internationalization, providing a comprehensive overview of globalization's multifaceted impact on modern organizations. Desklib offers this document as part of its extensive library of student-contributed assignments and study resources.

THE IMPACT THAT GLOBALIZATION HAS
ON ORGANISATIONAL STRUCTURES
CULTURES AND FUNCTIONS

TABLE OF CONTENTS
PART- B..........................................................................................................................................3
P3 Influence of globalization on organisation governance, leadership, structure, culture and
functions.......................................................................................................................................3
P4 Influence of ethical and sustainable globalisation on organisation functions .......................5
P5 Different way decision-making can work effectively in global contextualised.....................6
P6 Various routes and barriers that organisation can adopt to internationalisation ....................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................1

PART- B
P3 Influence of globalization on organisation governance, leadership, structure, culture and
functions
Globalisation can be defined as growing interdependence between the countries in terms
of exchange of culture, products and services and information. Government of many countries
through taking active part in globalization has influence company to expand their operations in
order to earn huge profit margin and market share. In order to understand the way globalization
has influenced organization governance, structures, leadership and culture two model has been
used such as McKinsey’s 7S model and Hofstede’s Dimensions of Culture. Such as:
Structure: The SASOL has followed hierarchy organisation structure in which information as
well as order flow from top to bottom within the company. There is clear defined of roles and
responsibilities that need to be accomplished by particular individual that has resulted in smooth
operations of businesses and achievement of end goals. With globalization, the company is
planning to have matrix or division organisation structure so that it can easily expand its
operations and adapt with external changes in minimum time frame (Hakanen, Helander and
Valkokari, 2017).
Strategy: The company has make use of different strategy as well as method in order to achieve
its end goals or attract more and more customers within the firm. Likewise, it has communicated
individual about the vision, mission of firm and focused on making strategies as per customers
need and wants for maximum benefits. Globalisation has impacted on strategy of SASOL as it
has to adapt flexibility and adaptative strategy in order to grow and retained its operations in
external environment.
Skills: It can be stated that SASOL have highly dedicated, determined and ambitious staff
member that have sufficient skills pertaining to the way particular task can be completed.
Globalization has helped company in having more talented, hard working and skill workforce to
contribute in growth and success of enterprise (Zheng, 2017).
System: Company have well-defined system or procedure and policies related to the way
particular task need to be completed in the firm. Globalisation has provided opportunities to
make the best use of system to delivered services to range of customers in limited time frame for
benefits of firm.

Shared value: Enterprise has emphasis on following ethical value and moral principle while
operating its numerous functions that has helped in retaining competitive positioning in global
market. Globalization and with increase competition level, SASOL has been force to
transparently, honestly share information to its stakeholders and customers in order to make them
happy and satisfied and retain market share.
Style: The leaders of SASOL have make use of democratic leadership styles to motivate
employees to work hard for accomplishment of end goals. But with globalization, the leaders are
influence to select transformational leadership styles in order to quickly adapt external changes
and grow businesses operations (Grizane and Jurgelane, 2017).
Staff: There are around 30100 employees that are working in the SASOL so that several tasks
as well as activities can be completed in limited time frame. Globalisation has provided
opportunities to have more qualified and skills workforce that can easily help company in
earning maximum profitability.
Hostefede culture model is another model that has been used in order to understand the
way globalization has affected on culture of SASOL. Such as:
Power distance: SASOL is an organization that have culture that all decision will be made by
the top management that has to be followed by subordinate while completing their respective
work. Globalization has influence culture of company to decentralized power so that decision
can be made at rapid stages for benefits of firm.
Individualism: Most of the people working in SASOL prefer I over we that has lead barriers in
effective expansion and growth of firm in international market. So, company in order to survive
and sustain its operations in global environment has to motivate people to work in team for
achievement of last goals (Kordoš and Habánik, 2018).
Mascunity: Company focus on equity, competition and better performance through reducing the
conflict between employees by coordinating them to work for company benefits. So
globalization has influenced to improve its performance to maximum extend in order to provide
tough competition to other firms.
Uncertainty avoidance index: The people working in SASOL has more relax attitude, they
follow all specified rules and regulation thus they tried to avoid uncertainty or adverse situation.
But with globalization, it has to changed culture or motivate people to adapt themselves as per
external environment to sustain its positioning.

Long term orientation: It can be illustrated that people working in SASOL are long term
orientated as they give importance to values, moral principles and traditions. So globalization has
helped company in promoting its value to make more and more customers happy and satisfied
beyond their needs.
Indulgence: Most of the people in SASOL does not have control over their emotion, desire that
has resulted in facing numerous problem in the firm. Globalisation has influence company to
make culture where people have ability to control over their aggression, anxiety and many more
to effectively deal with situation.
P4 Influence of ethical and sustainable globalisation on organisation functions
With growing ineffective use of resources and more harm cause to society and
environment has influence company to undertake steps related to making optimum use of
resources for benefits of society. Ethical and sustainability will contribute company in making
use of resources in such a manner that they are available for existing as well as future generation
to satisfied their respective wants. SASOL while performing its function has to considered
ethical and sustainability factors to sustain competitive advantages in external environment. Such
as with globalization there are various functions of company has being impacted likewise human
resource, financial and operations (Grab, Olaru and Gavril, 2019). The way functions has been
affected because of ethical and sustainable globalization can be illustrated in detailed as follows:
Human resource: The company human resource manager while making rules, regulation and
policies related to management of people have to consider all ethical and sustainable principles
so that company can sustain in global environment. Likewise, it needs to ensure that all
individual are provided equal growth and development opportunities to make the best utilization
of their skills, capabilities for benefits of firm. It has to ethical and transparently share all
necessary information about the company to employees so that they can actively take part in
achievement of organization end goals. So, overall it can be stated that SASOL human resources
has been influence because of ethical and sustainable as it needs to incorporate all activities that
are right for all individuals that are working in the firm.
Finance: Another function of SASOL is to manage the finance of company through identifying
appropriate source through which it can be raised, make their optimum utilization so that it can
earn maximum return. Ethical and sustainable globalization has influenced finance function to
make the best use of available finance through investing in alternative sources. Ethical and

transparently share information related to total profit margin as well as revenue that has been
generated by company to its stakeholders and investors. So that they are happy to work for
benefits of organization. Thereby the ethical and sustainable globalisation has impacted on the
financial operations or use of capital of firm in optimum manner for benefits of company.
Marketing and sales: The another function that has been impacted because of ethical and
sustainable globalization in SASOL is marketing and sales. Before globalization, company is not
give more emphasis on ethical and sustainable marketing but in recent scenario, in order to
promote products it has make use of ethical and sustainable marketing (Kozubikova and
Kotaskova, 2019). Likewise, all information, facts and figure related to company and its products
need to be truly share to customers so that they can take right decision to purchase for fulfilment
of their respective desired.
Thereby in this manner the ethics and sustainable globalization has impacted on SASOL
functions.
P5 Different way decision-making can work effectively in global contextualised
Decision-making is important process that is performed by the manager of company to
take necessary decision related to firm so that it can enjoy huge profit margin and market share
in external environment. Global environment involves numerous changes so the manager have to
take appropriate decision so that company can grow and survive in competitive market.
Managers of SASOL has devoted effective time and efforts in order to take decision that are
fruitful for organization. Likewise, it firstly identified and understand the problem that is face by
company or customers that are living in the society thereby find alternative method that could be
used to satisfied their wants (Lasserre, 2017). Therefore, the different ways that has been used by
manager of SASOL so that they can work effectively are as follows:
Identify decision: The first step that has been taken by manager of company is identified areas
in which decision needs to be make such as SASOL manager by understanding that there is high
competition has planned to improve its quality of products and services delivered to customers.
So that it can grow and sustain its operation in competitive market.
 Gathered information: Second steps that SASOL manager has taken so that decision-
making can work effectively in global context is gathering information about different
changes like government policies, taste and preferences of customers, products or things
that are offered by competitors and many more.

 Alternative method: Moreover, the decision-making of SASOL has work effectively in
global environment because manager has also identified alternative method that could be
used to solve particular problem or take appropriate decision.
 Weigh of evaluation: The manager of SASOL has weighed of evaluation of alternative
options that are available for better decision-making. Manager through weighting each
decision is able to decide particular course of action that could be taken for benefits of
firm.
 Selection of alternative: SASOL manager out of several alternative method, select
particular method that can be used for benefits and growth of organization (Grab, Olaru
and Gavril, 2019). Such as with increase in competition, company in order to survive in
market has decided to make continuous innovation in its products and services so that
more and more customers are part of organization.
 Take action: Manager on the basis of selection of alternative method has finally taken
action to implement the decision so that company can earn maximum benefits possible.
Likewise, SASOL has start conducting research to gathered information and implement
the decision so that best outcome can be gained.
 Review decision and its consequences: This is last stage at which the decision are
review its terms of its benefits and consequences in future circumstances. Such as
SASOL manager is able to identified that through continuous innovation company is able
to build and retained strong brand image in the market.
P6 Various routes and barriers that organisation can adopt to internationalisation
With globalisation, companies are planning to expand their business operation in
international market through making use of different routes such as franchise, joint venture,
acquiring business and many more. SASOL can adapt these routes while expanding its business
in international market to achieve higher growth and success in future circumstance. Such as:
 Franchise: It is method that is used for distribution of products or services through
franchisor that have well-established brand trademark and effective system that helps in
adding new individual within organization (Liñán, Paul and Fayolle, 2020). So, company
may opt franchise as option in order to get continuous royalty income to effectively to
business in smooth manner.

 Joint venture: Another method that could be used by SASOL for internationalization is
forming agreement with two or more parties that are ready to pool their resources so that
all task can be easily completed. Thus, through joint venture all risk and return are shared
between the two companies and it can easily grasp attention of new customers and earn
high profitability.
 Acquiring the businesses: Company may also acquire another firm that have sufficient
resources, brand image and market share in international market. SASOL through
acquiring established businesses can easily expand business and enjoy huge revenue
(Hopkinson and et.al., 2018).
Barriers related to adapt to internationalization
 Financial barrier: The first and foremost barrier that is face by the companies in
internationalization is financial barriers as it has limited amount of capital that can be
used for expansion of business. Therefore, insufficient availability of finance and other
resources has resulted in creating barrier related to adaptation to internationalization.
 Lack of knowledge: Moreover, the manager of company does not have sufficient
knowledge related to the new market that lead challenge in formulating appropriate
strategies that could be used to grow and expand business operations.
 Government policies: Last barrier related to internationalization that SASOL might face
is strict government policies and procedure that it has to follow while expanding its
operation across worldwide. High taxes rates and more impose duties are some of the
challenge or barriers related to internationalization that may be bear by SASOL
(Amankwah-Amoah and Wang, 2019).
 Leader of SASOL in global environment to take right decision will make use of
transformational leadership style so that it can easily change its strategy, set of
actions to sustain its operations in external environment. Transformational
leadership will contribute in reducing the associated risk and enhancing overall
profitability to maximum extend. In additional to this it helps in motivating
employees to easily accept the external changes so that company is able to retained
competitive advantages in market and earn maximum return. Company is able to
easily formulate partnership with other firm in international market and attract
more and more customers to be part of organisation. Therefore, it can be

summarized that transformational leadership style will be best for SASOL in
current and future circumstances.
CONCLUSION
From the above report it can be concluded that globalization is concept that helped in
interconnection of countries and expansion of business operations to maximum extend. It has
impacted positively and negatively on leadership, culture and governance of SASOL so company
by effectively adapting its strategies is able to lead competitive market share. Furthermore, it can
be stated that in internationalization, there are number of barriers as well as routes that can be
adapted by SASOL to grow its business globally and earn huge profit margin. At last, it can be
summarized that quick and effective decision-making in global environment helped company in
gaining differentiate positioning.

REFERENCES
Books and journals
Amankwah-Amoah, J. and Wang, X., 2019. Opening editorial: Contemporary business risks: An
overview and new research agenda.
Grab, B., Olaru, M. and Gavril, R., 2019. Self-managed teams as a key to unlocking digital
transformation in business management. Quality-access to success, 20. pp.280-286.
Grizane, T. and Jurgelane, I., 2017. Social media impact on business evaluation. Procedia
Computer Science, 104. pp.190-196.
Hakanen, T., Helander, N. and Valkokari, K., 2017. Servitization in global business-to-business
distribution: The central activities of manufacturers. Industrial Marketing
Management, 63. pp.167-178.
Hopkinson, P and et.al., 2018. Managing a complex global circular economy business model:
opportunities and challenges. California Management Review, 60(3). pp.71-94.
Kordoš, M. and Habánik, J., 2018. Corporate culture interplay issues in global
economy. Problems and Perspectives in Management, 16(3). pp.302-310.
Kozubikova, L. and Kotaskova, A., 2019. THE IMPACT OF TECHNOLOGICAL FACTORS
ON THE QUALITY OF THE BUSINESS ENVIRONMENT. Transformations in
Business & Economics, 18(1).
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Liñán, F., Paul, J. and Fayolle, A., 2020. SMEs and entrepreneurship in the era of globalization:
advances and theoretical approaches. Small Business Economics, 55(3). pp.695-703.
Zheng, J. G., 2017. Data visualization for business intelligence. Global Business Intelligence,
pp.67-82.
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