Global Business Environment: SASOL Ltd Expansion and Strategy Analysis

This report provides a comprehensive analysis of SASOL Ltd's global business operations, focusing on its structure, culture, and governance within the context of international expansion. It explores how globalization influences these elements and assesses the impact of ethical and sustainable practices on organizational functions. The report delves into the strategic expansion routes taken by SASOL Ltd, evaluating the advantages and disadvantages of its internationalization strategy. Furthermore, it examines the influence of globalization on decision-making processes and overall business strategy, considering factors such as cultural dimensions and ethical considerations. The report utilizes models like McKinsey's 7S and Hofstede’s cultural dimensions to provide a structured evaluation of the company's global presence and expansion strategies.

Global business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PROJECT 1 .....................................................................................................................................3
Covered in PPT.......................................................................................................................3
PROJECT 2......................................................................................................................................3
1. Explanation of the structure, culture and governance of the organization.........................3
2. How structure, culture and governance are influenced by the global operations. ............5
3. Evaluate the influences of ethical and sustainable globalisation on organisational functions.
................................................................................................................................................6
4. Influence of globalisation on organisational decision making and strategy.......................6
5. Assess which strategic expansion routes the organization took and analyses both
advantages and disadvantages................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9
.........................................................................................................................................................1

INTRODUCTION
Globalisation is describes as a process by which various national and regional economies
gets interconnected with global network of trade, communication and transportation. It is way by
which political, social and cultural relations across the countries gets interconnected. It also
benefits the world economies as Foreign direct investment tends to increase and boost
technological innovation and industrial restructuring. This project will discuss about the SASOL
limited organisation which is a fast growing energy and chemical company in South Africa and
expanded into Canada, Gabon and Australia and planning to expand in other countries soon. This
report will discuss about the structure,culture and governance of the organisation. It also analyses
the influence of ethical and sustainable globalisation on organisation functions. In addition to this
it also determines the expansion routes for the respective organisation analysing both the
advantages and disadvantages.
PROJECT 1
Covered in PPT
PROJECT 2
1. Explanation of the structure, culture and governance of the organization
There are various determiners which affect the operations and functions of business when
expanding globally (Savrul, Incekara and Sener, 2014). Respective industry should properly
concentrate on number of factors associated with globalisation. Such are described as under-
Structure- It defines the way or the process business operations are carried in respective
industry. There are various countries which have different structures and directly affects the
performance of business firms (Ferraro and Briody, 2013). Structure adopted by respective
industry is very complex and employees need to carefully understand. Hence, Sasol ltd follows a
complex functional structure for producing chemical related products integrating the work with
all departments in the organization.
Culture- Organizations must be able to understand the culture of the countries in which it
is expanding such as the attitudes of people, beliefs and lifestyle. Culture of the company should
be significant which can manage and integrate all the functions accordingly. Respective

company follows a proper hierarchical structure for keeping the organization functions smoothly
and efficiently.
Governance- It is the ruling authority in the company which manages and supervises all
the work and has the power of decision making. They also have the capability to overcome the
challenges when the SASOL ltd will expand internationally and increase the revenue for the firm
(Wetherly, 2014). In respective company managers are responsible for the decision-making and
have full control over the business. They follows a proper advisory board governance model
which helps the respective organization to get expertise knowledge for better functioning of
organisation.
1. McKinsey’s 7S model illustrates the overall structure of organization.
In this model there are 7 areas of organization which are interrelated and create sustained
competitive advantage.
Strategy- These are the actions and plans made by SASOL to achieve competitive
advantage. Industry should make a sound strategy which has strong mission, vision and values.
SASOL makes long term strategy for their business which make give strong results and able to
compete in the market.
Structure- In general it is the organizational chart in which business units are organized
and includes the information of who is accountable to whom. Respective organization follows a
functional organizational structure for smooth operations of business.
System- These are the procedures of the company which shows how business activities
are executed in the industry. Respective industry chooses simple methods of treating chemicals
which becomes easy for the employees which is also not hazardous.
Skills- These are the abilities of the employees to perform work in operations. SASOL
should provide adequate training to the employees and makes them highly efficient in
performing work.
Staff- It determines what type and how many employees are needed in respective
organization and how they could be recruited, motivated and rewarded. At Sasol intelligent as
well as well as risk taking employees are needed to perform work (Lee, Olson and Trimi, 2012).
Style- It represents the management style of leaders in the company. Managers at Sasol
uses participative decision-making process to make the employees feel that they are important
part of the organization.

Shared values- At SASOL, managers uses ethical norms and standards which guides
employee’s behavior towards the organization.
2. How structure, culture and governance are influenced by the global operations.
Structure, culture and governance are highly influenced by the global operations as these
factors vary from country to country. It becomes difficult for the respective firm to manage the
structure, culture accordingly when expanding internationally (Tokuoka, 2012). Different laws in
different country makes the performance of the business work difficult. Structure, culture and
governance are impacted by globalisation as they demand new ways of performing task in order
to compete in the market. As the SASOL Ltd follows a complex functional structure with proper
hierarchical structure which make the company highly dynamic to change their work structure
according to the demand in the market. They should become flexible in order to perform the
functions according to the environment of the respective country.
.
Hofstede’s Dimensions of Culture which determines how organization has been influenced.
These factors determines the impact of culture on the society and on the values of the
member of that society. Their is brief overview of six cultural dimensions-
 Power distance- It explains to each member in SASOL Ltd. That power is distributed
unequally in the industry, according to their position. This should be removed by
distributing power equally and makes the employees motivated.
 Uncertainty avoidance- It describes to extent to which people in the society are not ease
with ambiguity and uncertainty. Employees at SASOL Ltd should be prepared to face any
contingencies when expanding globally and take appropriate measures to overcome
challenges.
 Masculinity vs Femininity- It implies preference of society for assertiveness and
heroism. On the other hand femininity represents for cooperation and modesty (Sanchez,
Nardon and Steers, 2013). Respective industry should focus both the factors and avoid
cultural differences to gain profit while going global.
 Individualism vs collectivism- Employees in the organisation wants to work alone and
some of them likes to work in team. This creates conflicts among the employees at work
place and influences the performance of organisation.

 Long term vs short term orientation- It describes the inclination of society to achieve
long term profit as well some of the individuals need immediate profits or gains. In long
term employees of the respective company focus on virtues and obligations as in short
term people are less willing to compromise (Compact, 2014). These directly influence the
working of SASOL LTD.
 Indulgence vs Restraint- Employees with high indulgence enjoys their life on their
emotions whereas restraint employees are more concerned on their conduct and
behaviour according to the social norms. These type of cultural differences affects the
working of SASOL Ltd.
3. Evaluate the influences of ethical and sustainable globalisation on organisational functions.
For any organisation it is very difficult to expand globally, it has to integrate with
regional, societal and economic structure. Their are different areas which affect the ethics and
sustainability in different manner.
Health care facilities- It is essential for the respective company as it deals in hazardous
chemical industry which needs to maintain health and safety aspects while manufacturing
process and using such procedures which will provide them high level of safety in performing
work (Solomon and et.al., 2014).
Treat employees fairly- Organisations should not discriminate employees on the basis of
income as well as status. The respective company should treat all the employees with utmost
justice which helps the company to expand its business operations globally.
Engage in sustainable Manufacturing practices- In order to minimise the impact of
ethical and sustainable aspects SASOL Ltd should consider sustainable manufacturing practices
which will reduce the cost of manufacturing as well as produce goods which are sustainable in
nature by adopting such methods and procedures.
Insist on integrity on business relationships- They should also consider integrity in
business relationships by maintaining a way of formal communication between all the staff
members and focus on such aspects which makes a good business relationship.
Apply ethical considerations to products and services- Ethics is the main concept
while manufacturing products and services. In context to the respective company they should
produce goods and services which are ethical in nature and their manufacturing doesn't impact
the environment in any way.

.
4. Influence of globalisation on organisational decision making and strategy
Ethical and sustainable factors have affected decision making in the global context in the
following way-
 For carrying out the best activity or taking favourable decision in SASOL Ltd, manager
of the company needs to address the whole problem which occurs regarding the attitudes
and beliefs while expanding to other countries (Bharadwaj and et.al.,2013). They should
properly provide right decision which helps in managing and maintaining regarding
ethical factors.
 When the company is expanding globally it has to concern the sustainable factors such as
resources, time and cost available for the respective industry for expanding and can meet
the requirements of the country and sustain for long term. It also needs to focus on
sustainable manufacturing practices otherwise it will affect the business operations of the
manufacturing industry.
 For operating the business operations globally company needs fair treatment for
employees as they are responsible for performing business task and also helps in effective
decision making.
 SASOL Ltd should also consider ethical practices while manufacturing products and
should not harm the environment when expanding globally. Strategy for producing
products should be framed in such away that it doesn't impact the revenue generation of
the company as well as affects the decision making.
 Respective industry has to make sure that the business operations conducted doesn't
pollute the environment and the society. They have to take decision according to the
country in which they are expanding and maintain proper ethical and behavioural norms.
The above mentioned ethical factors such as treating the employees fairly as well as
considering ethical performance have affected the decision making in the global context as
because when the company expands its operations it becomes its responsibility to work
according to environment in the specific country as well as makes the decision accordingly. This
affects the decision-making as decisions and the way of doing task changes according to the
different country. When the respective company insist on integrating business relationships it

effects the decision making according to culture of the country and disturbs its performance of
business operations.
5. Assess which strategic expansion routes the organization took and analyses both advantages
and disadvantages.
Expansion through internationalization is the strategy adopted by organizations who want
to expand their operations beyond the national market. The need arises when the organization
has the capacity to fulfill the demands of the customer and earn huge revenues for the business.
There are various strategic expansion routes which the respective organization can take but the
SASOL ltd has expanded its route by-
 Expansion through internationalization- SASOL ltd is expanding its route through
expanding of its business in Australia and Canada and in various other countries to meet
the requirements of the country and earn profit as well as enhance market image.
Advantages-
 It offers access to the new markets and this international expansion provides a chance to
conquer new markets and reach more of the consumers, thereby increasing sales (,Daim
and et.al., 2012).
 Another benefit of going global is the opportunity to access new talent pools which offers
SASOL a unique advantage of increased productivity with their new ideas and thoughts.
 Respective company choose international expansion to gain competitive advantage over
the opponents and helps to build strong brand awareness with the consumers.
 It also provides additional investment opportunities that foreign markets offer and helps
to develop new resources.
Disadvantages-
 There is a fluctuations in the currency as compared to the home country and makes
difficult for the respective industry to estimate or measure profits accordingly.
 Prevailing political situation in the country as well as conducting market research of the
foreign countries makes it difficult for the respective industry to invest lot of time and
money for expanding globally (Ardichvili and et.al., 2012).

CONCLUSION
From the above report it has been concluded that expanding the business globally is
directly linked with various factors which affects its operations. Structure, culture and
governance creates a huge impact on business to expand internationally. This requires the
respective industry to focus on these sustainable factors which help in proper growth and
development that helps the company to earn huge revenue and enhance market image.

REFERENCES
Books and journals
Ferraro, G.P. and Briody, E.K., 2013.The cultural dimension of global business. Upper Saddle
River: Pearson.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Wetherly, P., 2014.The business environment: themes and issues in a globalizing world. Oxford
University Press.
Lee, S.M., Olson, D.L., and Trimi S., 2012. Co-innovation: convergenomics, collaboration, and
co-creation for organizational values. Management Decision. 50(5). pp.817-831.
Tokuoka, K., 2012. Does the Business Environment Affect Corporate Investment in India? (No.
12-70). International Monetary Fund.
Compact, U.G., 2014. Overview of the UN Global Compact. Recuperado de https://www.
unglobalcompact. org/ParticipantsAndStakeholders/business _associations. Html.
Solomon, M.R and et.al., 2014. Consumer behavior: Buying, having, and being (Vol. 10).
London: Pearson.
Bharadwaj, A., et. al., 2013. Digital business strategy: toward a next generation of insights.
Daim, T.U., and et.al., 2012. Exploring the communication breakdown in global virtual teams.
International Journal of Project Management. 30(2). pp.199-212.
Ardichvili, A., and et. al., 2012. Ethical cultures in large business organizations in Brazil, Russia,
India, and China. Journal of Business Ethics. 105(4). pp.415-428.
Sanchez-Runde, C.J., Nardon, L. and Steers, R.M., 2013. The cultural roots of ethical conflicts
in global business. Journal of business ethics. 116(4). pp.689-701.

1