Unit 18 - Global Business Environment: SASOL's Strategic Direction

This report provides a comprehensive analysis of SASOL Limited within the global business environment. It begins by defining globalization and then applies a PESTLE analysis to SASOL Limited, identifying key political, economic, social, technological, environmental, and legal factors influencing the company. The report discusses the driving forces behind globalization, including cultural exchange, improved transportation, technological advancements, reduced trade barriers, and labor availability. It examines the impacts of digital technology on globalization, highlighting benefits like enhanced communication and challenges such as increased competition. The report also addresses the challenges and complexities globalization brings to SASOL Limited, such as weather-related issues, cultural barriers, and societal challenges, offering recommendations for overcoming these obstacles. Furthermore, the report delves into McKinsey’s 7S model, Hofstede’s cultural dimensions, ethical and sustainable factors, strategic decision-making in relation to risk and diversification, and an evaluation of strategic global expansion routes available to SASOL Limited. Desklib is a valuable resource for students seeking similar solved assignments and past papers.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Part 1................................................................................................................................................1
Concept of globalization.............................................................................................................1
PESTLE analysis of SASOL Limited.........................................................................................2
Key driving factors of the globalization......................................................................................3
Impacts of digital technology upon globalization.......................................................................4
Challenges and complexities globalization bring to SASOL Limited........................................5
Recommendations.......................................................................................................................6
PART 2............................................................................................................................................6
1. Introduction and purpose........................................................................................................6
2. McKinsey’s 7S model for the organisation.............................................................................7
3. Influence of global operation on structure, culture and governance and the strategies
adopted by organisation in global market...................................................................................8
4. Hofstede’s cultural dimension................................................................................................9
5. Ethical and sustainable factor which is required for firm in global market..........................10
6. Evaluation of strategic decision making in relation to risk and diversification in a global
context.......................................................................................................................................10
7. Assessment and critical evaluation of the range of strategic global expansion routes
available to the organisation......................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
Appendix........................................................................................................................................15

INTRODUCTION
Global business environment is a kind of atmosphere different independent countries that
are characterized by external various factors that impacts the company within their home
environment as well. The business environment are consistently subject towards changes and the
industries needs to cope and keep pace with the rapidly changing environment. The factors such
as global warming, enhanced population, advancement in technology, demographic changes, etc.
are considered.
This presentation will discuss the concepts with the help of choosing SASOL Limited
which is fast growing energy ad chemical company head quartered in Cape Town, South Africa.
Moreover, this study will highlight the aspects related to globalization, analysis of external
environment, key driving factors of globalization, their significance, impacts, challenges along
with recommendations to overcome from those challenges.
MAIN BODY
Part 1
Concept of globalization
The globalization is a kind of concept which refers to preparing and making effective
relationships all across the world. It has been generated with s systematic procedure which help
the firm to make appropriate interactions along with integration among people, companies and
governments of diversified locations those are driven by international trade and investment
benefits. Basically, it is a process by which people as well as goods move further easily all
across the nation. It is an economic concept which provides integration of new market trends,
trade and investment along with certain barriers to slow down the flow of products and services
among all the nations. This enables the businesses to change the ways in which nation, people
and businesses interact with each other.
The globalization also enables the SASOL Limited to get their business over diversified
locations as it is the most powerful force that affects the modern world so much that without
globalization it would be difficult for some companies to even survive within international
environment.
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PESTLE analysis of SASOL Limited
It is a strategic management tool that has been utilized by SASOL Limited in order to
make better and beneficial decisions. The company operates into diversified atmosphere where
the establishment is highly influenced by enhancing environmental activism, increasing
regulatory framework, technological changes, government decisions and so on. The factors
which highly influences the SASOL Limited are:
 Political
These are the kind of factors that are related to the level and quality of intervention of local as
well as global governments as plays a vital role in objectives of the policies. Armed conflicts,
governance system and taxation policies are the major political factors. Moreover, it has also
been evaluated that government of South Africa has come under global pressure to adhere world
trade rules related to chemical manufacturing industry. Government resource allocation along
with time scale also affects the functioning of SASOL Limited into most effectual manner.
 Economic
This involves the economic performance of countries, exchange rate, labour market conditions,
inflation rate, taxation rate, etc. are considered under this specific factor. The performance of the
company is correlated with the economic performance of the South Africa's economy. Thus,
government interventions into basic material sector greatly impacts the SASOL Limited.
Furthermore, downward pressure over customer spending, skill level of workforce, availability
of core infrastructure, increasing liberalization, etc. are considered into this section.
 Social
With the help of this factor SASOL Limited will able to better understand the ways of doing
business along with their customer preferences. The factors such as gender role, demographics
through which company cater various segments of the population, societal norms, leisure
interests such as customers of South Africa are giving higher preferences to experiential
products rather than traditional value proposition, will be considered. Apart from this, the
education level also provides leverage to expand their presence in South Africa.
 Technological
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There are various ways in which technology affects the SASOL Limited which includes
innovation into products that are being offered, access towards greater information related to the
company, advanced customer services, access of population towards the technology, rate of
technology that driven change, access to mobile phones that drive empowerment supply chain
disruption, etc. are considered for the business expansion.
 Environmental
In order to provide focus over the environmental factors that impacts the SASOL Limited safe
disposal of hazardous material, safe water treatment, climate changes, laws related to pollution,
safe waste disposal, increasing focus over sustainability, insurance policies, etc. are considered
as the major factors that impacts the company effectively.
 Legal
This factor plays a major role in the development of the chemical manufacturing sector in order
to enter into globalized market. This consists of environmental laws, business laws, data
protection laws and time taken by business cases within the court, health and safety laws,
employment laws along with anti-discrimination laws within the company.
Key driving factors of the globalization
Globalization is the only factor that increases the production of goods and services all
across the world. Majority of companies have gone beyond their national boundaries in order to
operation into diversified locations. While doing business globally, there are various factors that
derive the forces behind globalization such as:
 Cultural exchange: This is the foremost and biggest drivers of globalization as people
travel through different countries and share their cultural beliefs and values at diversified
locations. With the help of this specific procedure, the understanding regarding the
culture takes place which drives globalization.
 Improved transportation facility: With the help of improved and great transportation
facilities, the companies are easily able to transport their services and goods within
particular or stipulated time frame. Any person is able to go anywhere due to such
enhanced facility likewise, the goods can also been transported beyond national
boundaries within some days. This happens over daily basis within certain parts of the
world and this is how the business actions occur.
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 Technological changes: It is one of the major driving force as advanced electronic
commerce system has made the firms successful in each and every aspect. This enables
the traders to do business from remote places to other parts of the world.
 Low barriers to trade and investment: Few years ago, the countries are highly hostile
and unfriendly in context of foreign investment but now they highly require foreign
direct investment and show their interests towards free trade agreements specially with
EU, USA and UK. This illustrates the significance of free trade or free movements of
goods to all others parts of the world.
 Labour availability: Companies generally look for the countries which provide cheap
labour price facilities in order to save the cost incurred within the procedure. There are
various developing nations which highly able to provide cheap labour in order to run the
business activities efficiently. This provides the company managers more opportunities
for expansion and development of any specific field.
Impacts of digital technology upon globalization
Technological enhancement helps the establishments to reduces the costs of
communication as well as transportation along with provide facilities in order to facilitate global
sourcing of raw materials and other kind of inputs within the environment. The technology has
the power to make the economy to become more competitive. Especially at the time of
considering digital technology which includes e-commerce, internet, e-money, e-billing,
telecommunication devices, etc. In order to elaborate over the impacts of digital technology over
globalization:
 Helpful for effective communication without boundaries: In present scenario,
communication is one of the major reason which facilitates globalization which helps in
making communication among all the countries of the world. This can be done in either
ways.
 Assist in gathering and transferring on time informations: With the development or
enhancement in technology, the companies are able to share information from one place
to another with minimum cost on money and time.
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 Help to make easy and safe monetary transactions: This enables the firm to generate
electronic money from one place to another with optimum safety level. This also enables
the company make necessary records in digitalized manner.
 Ability to search foreign market and order them without physical evidences: the
products have been searched with the help of their features, specifications, safety,
quality, price, etc. with the help of using advanced technology that enables the business
entities to search potential market areas and run their business effectively.
 Tough competition: Global organizations face tough competition from their competitors
and look for innovative ways to expand their business beyond the borders. Due to high
amount of competition among businesses, proprietors are looking for the ways to explain
businesses to foreign market.
Challenges and complexities globalization bring to SASOL Limited
Weather and climate issues: Climate and weather variation badly impacts on suitability of
business activities. Because these all are unexpected events in various country or area and its not
easier to manage climate conflicts. Heavy rain season is mainly challenging term which
influence performance of SOSOL Limited industry because when they decide to enter within
new market they do have duty or responsibility to involves appropriate individual which has
great idea and knowledge for managing climate changes activities.
Cultural barriers: In the cultural barriers one major barrier which impacts on activities of
overall business sustainability into new market is language issue. Because individual has their
different language and pattern of communication so it impacts on performance of employee
involvements for business task completion (Salvia and et.al., 2019). SOSOL limited company
provides chemical and energy services its essential that they involve individual for managing
their business activities. So business manager face complexities in involvement of new
employee because of language issue. Language understanding of different country is not easier,
it require one mediator or in case they not provide and share information with similar emotional
then language and sentence can be provide wrong information to other. So this process is one of
the most challenging term in globalization business activities.
Societal challenges: It includes that people or individual cultural and their believes, values,
thought process towards with new business. Individual business manager or their team members
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when enter into new market its very common risk or challenging term that people not build trust
with easier manner. So this issue mainly impacts on activities of business and its sustainability.
Societal challenges also refers to influence inivdiual audience attraction towards with new
company or new service distributor industry. Because people also develops higher concern on
proper decision-making because energy is not takes few amount it takes higher changes or cost.
Recommendations
From the identification and overall project study on SASOL Limited its been very clear
about this company and its useful for develop information that which factors mainly impacts on
business activities. Idea of this term that SASOL Limited industry mainly provide chemical and
energy services is important that organization who mainly perform and implement work with
machines or other technology sources they do have duty to engage appropriate services and
activities which structure and raise audience attraction. So idea of this term makes sure business
manager develop and implement methods or effective advertising with great manner which
useful for develop higher attraction of audience because its useful for attracts audience attraction
(Ma and et.al., 2018).
Also one major thing which essential for business effectiveness is involvement of digital
advancement is the best approach which helps to reduce multiple conflicts, determine values of
customer, market activities, audience attraction and many more. Proper and appropriate tool do
technology is the only approach which attracts audience attraction towards with the business
services. Individual has idea that globalization is not easier task but appropriate policies and
strategic decision-making plan makes effectiveness in global business expansion. From the
identification of challenges which impacts on activities of SASOL Limited company
performance its important term to resolve individual risk or issues with uses of appropriate
approaches and great sources with perfect involvement strategic approach addition within
organization practices.
PART 2
1. Introduction and purpose
Business often look for the expansion when they have potential customer base at native country.
Globalisation is the major factor which is creating opportunities for the business to expand their
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business activities across the borders. Globalisation affects the work place environment in such
it is the responsibility of the organisation to proceed with the strategy to adapt the values in
international market (Ulucak and Khan, 2020). Sasol Limited is the rapid growing chemical and
energy company, its headquarter is located in Cape town, company has good presence in
international market in New York, Frankfurt, Gabon, Australia and also in UK. Firm is looking
for continuing their expansion in other location as well for better business productivity.
Following report will covers the structure, governance and culture within the organisation, also
include the McKinsey’s 7s model, it also covers the evaluation of how firm adapt the values to
operate in global market. It will further discuss the Hofstede culture dimensional model and
evaluation of the ethical and sustainable factors which need to consider in global market.
2. McKinsey’s 7S model for the organisation
This framework suggests the 7 element which every organisation need to adapt in order to
grow their business. For the SASOL organisation McKinsey 7 S structure are as follows:
Structure: Structure is the main component in which the organisation arranged it is the chain of
accountability that is performed by every element of firm. Thus for the SASOL firm
globalisation has driven many changes, for them they need to alter their mission and to introduce
some new aspect which also involves the technologies and other new activities. Therefore, in
such it is also important to conduct training programs for the employees so that they will add
values in work structure.
Strategy: A well curated business plan which enables the firm to develop action plan for the
achievement of sustainable goals and to develop the competitive edge. Therefore, SASOL also
need to review their strategy according to globalisation, as to introduce something unique in new
market, which will add values in their business.
System: It suggests the business infrastructure of the organisation which develop the work flow
and decision making chain. SASOL company need to develop a work flow system in new
market and to develop a work culture which motivated employees towards their goals.
Style: Senior employees’ behaviour in firm develop the code of conduct from their conversation
with others. Globalization impacts the individual behaviour as well, therefore Leader of the
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SASOL need to encourage their team members to effectively lay out the task (Sarbu and et.al
2021).
Staff: It includes the talent management and all the HR regarding firm’s decision, rewarding and
training system. Thus for the SASOL it is important for them to provide training session to their
employees and also it is important to teach them about the cultural awareness in order to develop
in global market.
Skill: Skill is the competencies and abilities which allows the employee to lay out company' task
in efficient manner. Generally, globalisation brings opportunity for expansion in such SASOL
also need to focus on skill full employees, they also required to adapt changes in managerial
work to recruit managers to enhance the judgemental power.
Shared values: Mission, objectives and knowledge which is shared by the employees plays an
significant role in workplace culture.
Thus globalisation has impact over the functionality of the organisation, for the cultural
factor it allows to exchange the different country’s cultural aspects and also globalisation
impacts the governance from peace and stability. Thus in such it is important for the SASOL to
mould their work unit efficiently which helps them to develop share in global market.
3. Influence of global operation on structure, culture and governance and the strategies adopted
by organisation in global market
Global market always possesses in its own nature, usually the environment is found is
dynamic in nature which the businesses required to adopt changes for their productivity. For the
structure, global operation requires a skilled work force who have good knowledge in dealing
with global people. In such it is essential for the SASOL to enable their management team to
adopt the changes according to global market and to analyse the need of work place. It is
obvious that work place structure is affected by the global market, company can also require to
hire the candidate from global market to successfully established themselves in global market.
For the cultural aspect global operation have the major impact on this value it drives many
changes, if the firm do not follow the cultural values then they are not able to create their strong
position.
Cultural globalisation is characterised with business convergence and customer cultural aspect
of various countries. Therefore, SASOL company need to develop inclusive cultural values in
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work place structure, they require to recruit candidates to drive changes in work place
environment, with this they will easily communicate with customers also beneficial for
designing products accordingly (Shahbaz and et.al 2019). Thus for the governance it is
important for the organisation to follow all the government policies in international market
otherwise they will have to face the legal activities. SASOL company need to adapt certain
changes such as to develop structure to train their employees as to communicate with new staff
and to value their cultural background. It will enable them to efficiently operate in the global
market.
4. Hofstede’s cultural dimension
A Framework that is required to understand the cultural differences across the different
countries. Its dimensions are as follows:
Individualism- collectivism:
It is person’s preference where the spotlight is shift on self and on autonomy. Whereas
collectivism refer as person majorly prefer their society and family. In individualism staff
require to work independently which lead them to develop self-actuation. But in collectivism
unquestioned managerial structure is main reason for the team members of organisation. Thus in
the global market it is important for SASOL to know what things are required for their work
place, if they have individualistic leader then they have to depend on leaders’ view and opinions.
Uncertainty avoidance:
It is the degree of feeling which states that which members feels that they are uncertain
in such situation and being threatened (De Lombaerde and et.al 2018). Thus for the SASOL if
the consumer in market prefer a environment which implies by rules and policies, they need to
proceed accordingly and to develop cultural awareness values to interact with consumers.
Power distance:
It is refer as how the social inequality is followed and being accepted in different
cultures. Hofstede suggest that how some organisation are centralised where the autocratic
leadership is required to run the work place system whereas in low power distance culture
inequality is not identified in such workers required to be consulted in decision making and
needed a democratic leader. Thus for the SASOL it is important to analyse their business need in
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international market, they can proceed to implement low power distance which makes them able
to improve the relationship quality, communication and interaction among the team members.
Masculinity-femininity
Masculinity presents the culture with different gender roles where the males focus on
success and accomplishment where the females concentrates on improving life quality. Thus in
masculine culture where the males manager are more assertive on the other hand in feminine
culture, SASOL need to hire the candidate who negotiates the disputes (Shin, Chotiyaputta and
Zaid, 2022). It will be beneficial for implementing both culture as to increase the business
productivity.
5. Ethical and sustainable factor which is required for firm in global market.
` Ethical factors helps in developing the trust in parties, businesses earn this trust by
representing the ethical behaviour in global market. Thus for the SASOL it is essential for them
to obey the law of global market and to follow the fair trade policies and respect the custom of
the market. For their global expansion it is important to connect with the societies for that they
can proceed to conduct events which attracts the global people and provide them about their
products and services. It is their responsibility to ensure that their particular product is not
offending the cultural values of people and also need to ensure that they are following all the
government policies (Dissanayake, 2021). Every country is much aware of the sustainability,
thus it is required for the SASOL to design the product by keeping environmental factor, as they
need to ensure that their services have less impact over environment, and to commit to product
which have less carbon footprint impact. Thus it is important to follow all code of conducts and
sustainability factor to develop in global market.
6. Evaluation of strategic decision making in relation to risk and diversification in a global
context
Business expansion at global market its essential term to involves strategic decision-making but
its very clear that individual organization when enter into new are they do have to face multiple
challenges when they develop strategic decision as well. External forces and internal both
factors mainly influence performance of business. Globalization has power to influence
expansion of strategic decision-making and it affects risks as well. Diversification in global
context also badly impacts on activities and performance of individual (Ghermandi and Sinclair,
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