Global Business Environment: An Analysis of SASOL Limited

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Global Business Environment
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Table of Contents
Introduction......................................................................................................................................4
LO1..................................................................................................................................................5
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.....................................................................................................................5
M1 Critically analyse the impact that key factors have upon the global business environment
in terms of benefits and challenges..............................................................................................6
LO2..................................................................................................................................................8
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples...................................................................8
M2 Critically analyse strategic challenges in context of risk and diversification strategies and
the supply chain flow...................................................................................................................9
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations...............................................................................................9
LO3................................................................................................................................................10
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions..................................................................................................10
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
...................................................................................................................................................11
M3 Critically evaluate global market influences in application to appropriate theories and
models relating to organisational structure and culture.............................................................12
LO4................................................................................................................................................14
P5 Evaluate the different ways decision making can work effectively in a global context......14
P6 Determine and articulate the various routes to internationalization an organisation may
adopt, including key barriers.....................................................................................................15
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome......................................................................16
D2 Critique strategies that can be adopted by organisations operating in a global business
environment, making valid and justified recommendations of how they should adapt their
organisational structure and decision-making processes...........................................................16
Conclusion.....................................................................................................................................17
References:....................................................................................................................................18

List of figures
Figure 1: Globalization factors........................................................................................................6
Figure 2: McKinsey 7S model.......................................................................................................10
Figure 3: Checklist.........................................................................................................................12
Figure 4: ethics decision making...................................................................................................14

Introduction
The Global environment includes a wide range of features that influence the business of the
company including the culture, political, technological and geographic location with the
economic status. It defined the factors that affected the business of the company like internal and
external factors and also included the competitive market trend and user experience. The global
factors are important for the development of the proper developing strategy for the business
organization. The assignment is based on the analysis of SASOL limited organization that works
in the Energy and Chemical Field and established in South Africa. The organization is wanted to
extend its business in different countries like Gabon, Australia, Canada, and Mozambique. The
assignment described the factors of Globalization and Impact of the factors in the SASOL
company business. The CEO of The Company SASOL provided a report that contains the
concept and knowledge of Globalization and issues in the foreign market. Pestle analysis of the
business organization is the way that described the factors, issues, and opportunities of the
business organization. 7’s model and Hofstede’s Dimensions are the models that described the
factors of adoption, policies and the need of customers towards the new products. The decision-
making method is used for the effective strategic plan to improve the business of the
organization.

LO1
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade
Globalization factors have impacted the business and responsible for company growth. The
analysis of SASOL Company identified the factors that affected the productivity of SASOL
organization. The Globalization and trade of Global market are classified in the feature of
interconnection, Growth complexity, Diversity and rapid changes in the market. The factors of
Globalization are included cost and currency rate of the foreign country.
The factors of Global market:
Market factors: The factor includes determining the trend of the market and needing of the
customers. The taste of the customer and interest is required for high-quality products. The
market factors included user requirement and new approaches to identified the requirement of
the customer to improve that business.
Cost: the economic scope and cost of the products are the factors that are required for effective
productivity. The labor rate of a foreign country and currency ratio affected the return of the
SASOL Company.
Social and environment feature: the factor includes the nature of the user and lifestyle of the
customer and their family. The environment factors with the policies of a foreign country are
provided a barrier for the business and required the effective business design to reduce the
barrier of the environmental factors (Blythe, & Martin, 2019).
Culture and competitive market: the understanding of foreign culture and resources are
required for globalization of business. New techniques and technology with the effective quality
of productivity is the factor that is required for the effective competitive market plan. The
competitive market design is the factor that affects the business of the organization and required
more attention for moving the company in the other country market.
Trade liberalization is the method that is used to restricting the free or nonprofit exchange of the
service among the nations. The approach is included in the plan and policies to provide effective
product service in the domestic marketplace. The method contains the effective market design
for reduced the barrier of cost and provided a more strong economy that showed lack of
competitive market.
The below figure contains the factors that affected the business of any organization in a foreign
country. The traded of company defined the rate of products, trade policy and demand of the
target country. The policy and government rule with the taxes are the factors that are required for
the growth of the organization (Brache, & Felzensztein, 2019).

Figure 1: Globalization factors
Source (Huda, et al., 2019)
M1 Critically analyse the impact that key factors have upon the global business
environment in terms of benefits and challenges.
The analysis of the Global environment described the nature of the customer and provided the
interest. The Global factor is provided various benefits For the SASOL organization with
including some challenges. As a manager of the company identified that the global environment
introduced the factors that enhanced productivity as well as barriers.
Global environment benefits:
 The global theories include effective knowledge of the service and technologies of a wide
range of market that provided enhanced marketing design to understand the requirement
of the clients to improve the company business.
 The concept includes the benefit of low-cost labour, demand for innovative and new
products, cheap and natural resources that are supported in the international business
marketplace.
 Low-cost employees and other factors are provided with opportunities that include the
source of business growth. The Global factors include the effective marketing plan to
reduce the competition of the SASOL Company. The approach identified the wide range
of knowledge and information that contained potential to enhance the economy level.
The globalization features included an effective market plan to improve the company profit and
reduce the competition.
Challenges:

 The main challenge of the globalization is ethical issues like security and safety of the
employees and the factor of corruption also need to face. The cost factors and investment
of the factors that affected the return of the company.
 The communication among the employees is also the challenge for the effective
workplace and effective team communication is required for business growth.
Inequality and differences in the money exchange ratio is also a challenge for the global market
and created a barrier for the company (Huda, et al., 2019).

LO2
P2 Explain the complexity of strategic challenges faced by organisations when operating in
a global environment supported by specific examples.
The challenges and issues of the Global market affected the company business. The Organization
SASOL faced Global issues like government law and regulatory policies, ratio of currency in the
global market and competition form the local marketplace. The Challenges and barrier of the
Global market on the SASOL Company is clearly described by the Pestle analysis of the
organization which is discussed below:
Political features and factors: The political factors provided a significant role in the business of
the SASOL organization. The company faced the issues of military invasion and risk of the
integration. The organization is also affected the corruption level that enhanced the cost of the
material. Anti-trust and pricing regulations are affected by the company business in a foreign
country like Australia and others.
Economic factors: the intervention of country government and free marketing trade for material
with the stability of the money exchange rate is the issue with global marketing. For
Organization SASOL, the financial market efficiency is required to understand the capital of the
foreign country. The knowledge of Oil and energy industry is required for effective productivity.
The education level of the target market is also the challenges for the company to extend its
business (Steiss, 2019).
Social factors: the skill and efficiency of the employees and class of the society are affected by
the business of the company. The gender and age factors also the challenge to understand the
actual demand of the client. The nature of society towards SASOL companies also challenging
factors for establishing the business in the target country.
New technology: According to the demand of the client and competitive market trend required
new technology and effective marketing technique to create effective communication among the
user and the company. The company includes new attractive advertisement approach with the
effective service to enhancing the communication and relation.
Factor of environment: the weather and change in the climate are issues for the SASOL
Company to set up a new business in the target market. The rules and pollution regulation is
different from the domestic market place and also waste management in a different country is
always a challenging factor in the foreign country (DesJardine, et al., 2019).
Legal features: the rules for the Gas and Oil industry is the issue for the SASOL organization and
law of discrimination affect the company business. The knowledge of the employment laws and
safety and security laws have affected the business of SASOL Company.

M2 Critically analyse strategic challenges in context of risk and diversification strategies
and the supply chain flow.
The challenges in the supply chain are occurred by the delivery time and less effective image
quality of the products. The marketing strategy is having the risk in the investment of the
organization and policies of the government that affected the market and quality of the company.
The organization SASOL faced the issues of economic and political factors which created a
barrier and expensive export of products in the target country. The organization faced the issue
of larger demand at time and the company required an effective decision-making approach to
resolve the demand issues. The supply flow of the service and goods of the SASOL Company
includes the factors of supply design and complexity of supply management in the foreign
country.
Diversification referred to the marketing plan that contains the knowledge of the market and
competitive demands of the technology. The customer satisfaction and need of client are needed
to understand the actual marketing demand and trend of the target market. The rate of crude oil
and natural gases affected the supply of the SASOL Company. The infrastructure of North
America may affect the cost of gases and improving the cost of the supply. The SASOL
organization also faced the issues of oil agreement in the US country (Crane, et al., 2019).
.
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations.
Opportunities:
 The Global marketplace provided the interest of new customers and new approached to
improve the market of SASOL Company.
 The government relocates incentive and avoidance of hazards and barriers are providing
more opportunities for business growth.
 The Global market includes a new source of material and low-cost resources for business
material with cheap labour for the organization.
Challenges:
 The rate of money in the foreign country and long supply of products improved the cost
of the Sasol organization.
 The laws of employees benefit and waste management have influenced the business of
SASOL company in the other country.
Communication and different body language of the foreign country crated barrier for the
company in the foreign market (Pieterse, 2019).

LO3
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
The various factors of the external environment have affected the business of the SASOL
organization which effectively described by the McKinsey 7’S model. The Evaluation of the
factor of globalization influence is described below:
Figure 2: McKinsey 7S model
Source (Kondakci, & Zayim-Kurtay, 2019)
Structure: The effective structure is provided management of the organization and identifies the
effective management of each level of the organization. The SASOL Company included an
effective management plan to monitor the structure of the organization.
Leadership style: The effective leadership styles manage the working in the organization and
included opportunities for the business. The less effective strategy of the organization is the
challenge for the organization that influenced the company business.
Culture and skills: the culture of the foreign environment required understanding and effective
communication to improve quality. Global market knowledge includes effective information of

foreign culture that provided effective decision making for business opportunities (Kondakci, &
Zayim-Kurtay, 2019).
The Global market plan introduced opportunities for the organization and provided an effective
strategy to achieve the goal of the organization.
The McKinsey 7S model is used to identifying the strategy and structure of the business to
improve the business plan. The organization required a system to monitor the working of the
staff. The model identified the skill and knowledge of the staff to understand the capabilities of
the employees. The model is used to identified the skill and education of the employees to
enhance the quality of the SASOL company. The globalization is discussed the various factors
that are required for the growth of company growth. Low-cost employees and customer
relationship include effective communication to extend their market in the foreign business
marketplace.
Hofstede model: this model provides the nature of the business culture and workplace structure.
The model described the dimensions of the structure and skills of employees that defined the
efficiency of the employees. The model contains the dimensions of the low power and market
culture that influenced the market of the SASOL Company. The model includes the behavior of
the agent and emotions as the marketing strategy to enhance the business (Hartnell, et al., 2019).
Both models have discussed the factors that influenced the business of SASOL company. The
company required to include the strategy of the Global market to improve business. The skilled
employee and low coat productivity with the low investment improved the return of company.
P4 Evaluate the influences of ethical and sustainable globalisation on organisational
functions.
The globalization and extent of market in the other country include more opportunities for
business with high profitability but also contained the issues and challenges that made a barrier
for the organization. The barrier of the global market is in the form of high investment, quality
issues, and customer requirement. The factors are supported to enhance the productivity of the
SASOL Company and included improved modification in the business.
Ethical globalization functions:
 The factors of ethics affected the business of company in a negative or positive way and
introduced competition for the business.
 The ethical functions contain the government issues and policies that created a barrier for
the organization and free treading of business affected the company business.
 The ethics reduced the production cost due to the high market competition and customer
satisfaction.
 The ethics functions include the quality service that used new technique and innovative
technology to enhance the productivity of the organization.

 The ethics provided benefit for the local employees, the organization includes the local
employees with the business to providing employment in the country.
 The different market strategy and interest are always issues and challenges for the
organization to understand the taste of the foreign customer with the proper requirement.
 The globalization is supported new trend of market and technique to attract foreign
customer with effective quality.
 Values and ethics like equality, protection, and justice are the factors that supported the
human and includes the company agreement and law documents. It includes security and
effective framework for supporting social responsibilities and rights.
Sustainability has described the range of marketplace that is appropriate for the company
business. The approach included strong decision-making for the issues which are faced by the
organization. The approach includes new technology that enhances business function and
harmless technology (Sarkis, 2019).
M3 Critically evaluate global market influences in application to appropriate theories and
models relating to organisational structure and culture.
For the evaluation of global marketplace influence used McKinsey 7S model. The model
contains the factor that created changes in company management for effective advertisement and
market design. The model identified the efficiency of the SASOL infrastructure and
qualification of the staff of the company. The model contains an effective business design that
enhances the motivation of the staff and pushes them to achieve the goal of the company. For the
evaluation of SASOL Company, the model applies a checklist based analysis that is containing
the questionnaires to detect the issues and skill of the staff. The SASOL Company used a proper
management plan for selecting an employee for the post and also analyses the qualification and
experience according to the required post.
Figure 3: Checklist