Detailed Report: Global Business Environment of SASOL Company

This report examines the global business environment, focusing on SASOL, a fast-growing energy and chemical company. It begins with an introduction to globalisation, explaining its driving factors, including technological advancements and consumer needs. The report then applies PESTEL analysis to SASOL, evaluating political, economic, social, technological, environmental, and legal factors impacting the company. It identifies challenges related to globalisation, such as cultural differences and trade barriers, and proposes recommendations to overcome them, including leveraging technology and improving public relations. The report further analyzes SASOL's structure, culture, and governance using the McKinsey 7S model to assess the influence of globalisation. It also evaluates the impact of global operations, ethical and sustainable factors, and decision-making processes in a global context, concluding with a discussion of strategic expansion routes, their advantages, and disadvantages.

Global business environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1. An introduction to the concept of globalisation.................................................................3
2. An explanation on the driving factors of globalisation......................................................4
3. The significant impact of digital technology on globalisation...........................................4
4. PESTEL analysis of SASOL..............................................................................................5
5. The challenges of globalisation and strategic challenges in SASOL.................................6
6. Recommendation in order to overcome challenges............................................................7
PART 2............................................................................................................................................8
An explanation of structure, culture and governance of SASOL...........................................8
An evaluation of global operations influence to the business in global market...................10
An evaluation of ethical and sustainable factor in global market........................................11
Assess factors affected to decision making in the global context........................................12
Assess the strategic expansion routes of organisation with advantages and disadvantage.. 12
CONCLUSION..............................................................................................................................14
References......................................................................................................................................15

INTRODUCTION
Global business environment is refers the environment in the different countries with
various factor to the home environment of organisation which influence the decision making.
The global business environment can be classified into two part such external and internal
business environment (Adekola and Sergi, 2016). The external factors includes political, social,
technological, economical, environmental and legal. The report is based on “SASOL limited”
which is fast growing energy and chemical company. This company is established at South
Africa. The company is also expand into the different countries such as Canada, Gabon and hope
for expand into another country very soon. The study will analyse key factors of global
commerce and trade. This will be explained by the complexity of strategic challenges in the
global environment. Report will evaluate by the leadership, structure and culture of globalisation
is influence to organisation. The report will includes by the different ways which are help to
work in effective manner in global context. It will also determine by the various routes to
internationalisation with key barriers.
PART 1
1. An introduction to the concept of globalisation.
The globalisation is the process of interaction between peoples and companies
worldwide. This highly advances in the transportation and in communication technology. In this
economies and societies are cross information, technologies, ideas, capital, finance, product and
services. It has advantage and disadvantage to the social, political and culture for development of
company which want to expand into global business environment. The globalisation is considers
in areas such as political, economic and culture globalisation. All have their own concept and key
factors. The culture globalisation is refers the transmission of ideas and values in ways to expand
social relation. On the other hand the political globalisation refers to the growth of political
system in size and complexity. The economic globalisation can be described as an
interdependence of different nations around globe with the free trade. It also helps in raising the
standard of living in poor and low developed countries by providing various job opportunities at
in global environment (Arizpe, 2015). The main concept of globalisation is to give competitive
advantage in multiple area. Economically, it has involves goods, services and economic sources
data, technology capital.

2. An explanation on the driving factors of globalisation.
There are various key driving factors of globalisation which can impact the business and
its growth. The key driving factors are as follows:
Liberalization:
The liberalization is used in different government like foreign direct investment. It is the
major tool which is allow to MNCs companies to work freely in business market.
Consumer needs:
Consumer is king and very important factor of the present global market. Demands of
customers are increasing daily and there are various products and services in the market which
helps in order to satisfy needs and wants of customers. Customers needs develop effective
opportunity for international business and trends.
Resources and market:
The resources and market both are very important key factor of the globalisation. The
resources like oil, gas, coals, human resources and chemical are important for the global market.
3. The significant impact of digital technology on globalisation.
The digital technology is creating huge impact on globalisation in both negative as well
as in positive manner. Now a days technology is more advanced and it is most important key
driving factor of globalisation. The technology advancement helps in reducing cost of
transportation and communication across the nation (Baller, Dutta and Lanvin, 2016). Digital
technology is the create the various opportunities for the business in the globalisation. This gives
impact on globalisation in negative and positive ways. The information technology has led to
emergence of global. On the other hand, use of advanced technology for production is restricted
to rich country with high wages. Technology is easily transferable in the developing countries at
there high tech technology is used for improvement of profitability. This help to globalise world
and its economy. Advanced technology helps to improve income and standard of living. With the
help of high technology company is able to reduce distance between time and place. This gives
valuable and positive impact on globalisation.

4. PESTEL analysis of SASOL.
PESTEL analysis help to provide prefect details of challenges in a market. SASOL
company will face various challenges in macro environment.
Political factor:
The political factor play an very significant role in determining factors which can impact
company's long term profitability or market. The SASOL company is fastest growing energy and
chemical company and it faces different types of political environment and political system risk.
This factor involves taxation policies, political stability in the existing market, local government
and wages legislation. The government is increase rate of political stability on the energy and
chemical company (Boshyk, 2016). In this case, company have to pay greater for stability in the
existing market.
Economical factor:
The economical factors has impact to SASOL company. This includes the various factors
like exchanges rate, education level of economy, labour cost, economic growth and
unemployment rate. The exchange rate is based on transfer pricing of SASOL company. The
changes in the exchange rate can impact to company's investment plan not in short but also in
long term.
Social factor:
The social factors are not only give opportunities to SASOL company to understand ways
of run business but also help to understand the needs and wants of customers in effective
manner. This includes traditions, culture, demographic and healthy & safety attitudes. This factor
is give impact on the business because each country have their own culture and lifestyle of living
and wants. The liberalization is increased towards the healthy and safety. In this case SASOL
company have need to move from this attitudes.
Technological factor:
The technological factor is the fast improving in the various sector. Some of the
technological factor has impact to the business and its growth factor by introducing new
technology at marketplace (PESTEL analysis, 2018). In this case company have to use latest and
new technology for work because in this sector company is not get maturity level. Other hand,
competitors used innovate in technology for compete with others.
Environmental factor:

Environmental factor has become one of the critical factor for business. The
environmental factors includes increasing in sustainability, climate changes, safe water treatment
and laws of population. The regular scrutiny by the environment agencies is increasing operating
cost on the SASOL company. In this case company is affected by this factor.
Legal factor:
Legal factor plays critical roles in the country. There are various legal factors which can
impact to the business like data protection law, discrimination laws, intellectual property rights
etc. the healthy and safety norms are highly impact to the business because this is the chemical
based country. In this case, company have to meet with this laws for better improvement.
These are the external factors which creates an positive as well as negative impact on
SASOL company.
5. The challenges of globalisation and strategic challenges in SASOL.
The globalisation poses the various challenges on SASOL and its environment. The
challenges of globalisation are as follows:
 It is ensure the benefits of globalisation extend into the all country. That will certainly not
happens.
 It is deal with the fear which is globalisation leads the instability in the developing
market.
 The other challenge which is address very real fear in industry in increased global
competition will lead with wages, labour rights, employment practices and environment.
 The cultural difference is another challenges which is faced by SASOL company in the
global market environment because each country is lead their own culture and living
style.
 The dominance western culture is give huge amount of impact on the SASOL company
in global market (Gopinath, 2018). The western develop world still holds reigns on the
international order.
Those are challenges which are faced by the company with the globalisation.
Impact of barriers on international trade and decision-making :
The are various type of trade barriers such as ethical, economic, technological etc., which
hameper decision-making process as well as international trade. The company have to make
decision by taking into view all this factors. For example tarrif barriers, the company has to pay

taxes in order to operate in any other company and different country charge different tarrifs. If a
country charge high tariff for import or export of goods it will result in high cost of producing
goods. Therefore it may result in change of opinion of company to operate business in particular
market or not.
6. Recommendation in order to overcome challenges.
The SASOL company is facing various challenges in the global business environment.
The challenges which company is facing creates a negative impact on business and its growth .
In this case, company is required to overcome these challenges by making new strategies and
introducing new ways in order to overcome such challenges. Some recommendation to
overcome these challenges are as follows:
 The manager of SASOL company have to ensure about benefits of globalisation. Proper
understanding of globalisation will help company to expand their business in other
country.
 In order to overcome the challenge related to technology company can make use of
advanced technological tools. With the help of advanced technology the company will be
able to reduce competition at global area. And it will also help company with the
introduction of innovative product in market.
Advantage : Use of advance technology will help company to move with the changing market
condition. It will help the company to have a close look on the current market condition and will
also help in making market strategies accordingly.
Disadvantage : High investment is required.
 To reduce the difficulty which occurs due to culture difference the company can build
high public relations with target customers. They can ask about the customer needs and
wants by conducting survey to better understand their target customer.
Advantage : this strategy will help company to analyse the type of customers and their likes,
dislikes, preferences, purchasing habits etc.
Disadvantage : the process might be too lengthy and will take a long time. Secondly it might be
possible that the research not prove qualitative due to asking questions to a small number of
people and not whole customer segment.
These are some recommendations which will help the company to overcome challenges which is
faced by company.

PART 2
An explanation of structure, culture and governance of SASOL.
To evaluate the influence of globalisation structure, the McKinsey model is effective and
supportive. The structure of globalisation is influences the SASOL fast growing energy company
and its decision-making process.
Makinsey 7S model:
The McKinsey 7S model is highly effective and valuable for the business and its growth
factors. With the help of this model company manager is able to improve performance of
company (Hamilton and Webster, 2018). Other hand, alignment of each department and process
of work as per this. This model is consider various important factor which are divided into two
parts like Hard and Soft elements.
Hard elements
The hard elements are easy to define and influenced by management like strategy,
structure and system of work.
 Strategy: Strategy is the plan which is enhance competitive advantage in the global era.
The globalisation have mission and vision for long term work. This can impact to
SASOL company and its decision-making because each country have their own strategy.
In this company have to take decisions as per global strategy process for growth and
stable in global market.
 Structure: structure of company is help to address the work assignment to employees. In
this company is make schedule and structure of work like who report to whom and what
is work process? Global business environment have their own structure of work in this
company have to add this work structure in their process.
 System: System is the effective and best process and procedure of routine work which is
done staff members. Globalisation have proper system of work like legal framework,
property planning and funding work. The SASOL company have to follow those system
at the time of globalisation business. By this company affected by those system and
policies because they have add those in their policies and system.

Soft elements
Soft elements are more tangible and influence by the corporate culture like skills, style,
staff and shared values.
 Skills: The skills are concerns with the both organisation and employees. It is the core
competences skills which is concerns in company for growth. This give the hard
contribution to achieve goals and objectives of company in effective manner. This can
highly affect to the business and its decision making process of company because at the
new place manager of company have to hire employees as per eligible skills which are
match with requirement.
 Staff: The staff members are considers in the soft elements of this model. This include
the plan for recruiting employees in organisation. Like company is expand into the other
country in that they have to hire best candidates for team and its growth.
 Shared values: The standard and values of ethics within the an organisation in which
vision, culture and polices are the key elements of company (McKinsey 7S model, 2017).
In this element, manager of SASOL company have to share values and important
information to employees. Those are related to the policies and norms.
Illustration 1: McKinsey 7S model
(Source: McKinsey 7S model. 2017)

 Style: Style is refers with the leadership and management styles. The leadership and
management style are very important part of the company. In this company is take their
decisions as per needs and wants of employees.
With the help of McKinsey model company manager is able to understand the structure of
globalisation.
An evaluation of global operations influence to the business in global market.
To evaluate the global operations influenced to business in the global market. Here is
select the Hofstede culture model which is demonstrate organisation influences.
Hofstede culture model:
The Hofstede culture model is help to understand the difference of culture across
country. This gives opportunities to business for done business in culture ways. This considers
various categories which are help to define culture by power distance and uncertainty etc.
Power distance:
The power distance model factor is considers different power of employees and
organisation in different country. Each and every country have need to understand the power
culture. This refers the difference in work culture as per power of employees. All employees of
company are not work on same post (Hofstede culture model, 2018). This gives guidance for
inequality of difference in respects.
Individualism:
The individualism is the main and effective role which strongly relay on team work. This
considers degree of obligation and dependence of group. This great important for attending
personal goals. In this process employees are exchange their ideas and discuss about the things in
effective manner.
Uncertainty of avoidance:
This refers to culture where employees are highly known about unusual. This is highly
depends on the condition of which is deals with various aspects. In this company have to handle
those all the situation which are happens in the company in globalisation era.
Long term orientation:
The long term orientation is refer with the effective and valuable things which is create
long term relations with employees in organisation. This factors if highly effective and valuable
for SASOL company to create long term relations with others.

This model is help to understand the culture of globalisation.
An evaluation of ethical and sustainable factor in global market.
The ethical decision making used to influence business and its decision-making by the various
factor. Those factors are morale and personality, personal goals, organisational factor,
environmental and ethical behaviour etc.
Personal goals:
The personal goals of peoples and employees generally affects the work and companies
growth. In the globalisation era employees used to have their own goal and they pursuit to
achieve the same in the effective way. (Kolodko, 2018). For example: company SASOL is hire
new eligible candidates for the team work and they have their own goal which is rich out towards
success fast. This can impact to the work of company.
Morale and personality:
Morale and personality used to affects the ethics and sustainability of globalisation. Like
company is looking to expand their operation into the other country. All person in the
organization used to have their own morale and personality to complete the work. The morale is
the confidence, enthusiasm, and discipline of a person or group at a particular time. Many of the
ethical work is affected by the peoples goals and morale. In this manager of SASOL company
have to make possible changes in order to achieve growth and goals of company in effective
manner.
Influence of ethical and sustainable globalisation on organisational function:
The ethical practices which the SASOL adapts such as meeting personal goals of people
by providing them incentives and rewards will help company to enhance overall function of the
organisation. For example an employee of marketing department will perform their best if
rewards, bonus are provided to them similarly the employees of finance department will also get
motivated. Therefore they will try to do more better in order to fulfil their personal goal as a
result of which the individual productivity, various department of organisation and overall
business will achieve success.
And by taking ethical practices in the organisation SASOL will also ensure sustainable
practising in its organisation.

Assess factors affected to decision making in the global context.
There are various ways which are help to SASOL company in their decision making
process for growth and also achieve goals and objectives of company. Those are as follows:
Decision-making as per direction:
The directive decision-making is the important and simple way of taking decision as per
others direction in order to achieve goals and objectives of company. This is depends on the
situation and conditions will be happens in the company (Lasserre, 2017). In this manager of
SASOL company is discussed situation with each and every peoples of team than take views and
ideas from each employees. With the help of each ideas, they try to solve this conditions as per
needs in effective manner. This give effective and valuable ways to manager in correct manner.
Analytical decision-making:
This is the effective and valuable way of taking decision, in this manager of company
first examine whole situation before taking any action against of this situation. This decision
making process is best for each types of decision-making because this give correct solution to
manager and leaders of company by analysis whole situation.
The analytical decision-making process is best for company.
The different ways in which decision-making can work effectively:
In order to make the decision effective it is required that the company first identify
decision which is to be taken for example as the company wants to expand its business globally
therefore the mode of entry should be analysed and relevant information should be gathered. An
new alternative should be constructed, than weigh the evidence and choose among the
alternatives and lastly review decision and consequences. This following step will help to make
decision effectively.
Assess the strategic expansion routes of organisation with advantages and disadvantage.
There are various routes which are help to company for expand in globalisation. Those
are as follows:
Joint venture:
Joint venture is the route and way of expand their business in other country. This can help
to SASOL company because this tend to equity based by various parties proportion of new
business. With the help of joint venture company is get opportunity to expand their business in