Report: Analysis of the Global Business Environment for SASOL Limited

This report provides an in-depth analysis of the global business environment, focusing on SASOL Limited. It explores the company's structure, culture, and governance using McKinsey's 7S model, and assesses cultural dimensions through Hofstede's framework. The report evaluates ethical and sustainable factors influencing decision-making within a global context, including customer ethics and adaptability. Furthermore, it examines strategic expansion routes, particularly merger and acquisition strategies, outlining their advantages and disadvantages. The study concludes by highlighting the importance of globalization, digital technology, and PEST analysis for business expansion, while emphasizing the impact of ethical and sustainable factors on decision-making processes. The report underscores the significance of these elements for fostering growth and achieving success in the international market.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PROJECT 1......................................................................................................................................1
TASK 1&2 (Covered in PPT)..........................................................................................................1
PROJECT 2......................................................................................................................................1
TASK 3&4.......................................................................................................................................1
1. Structure, Culture and Governance of Organisation by Applying of McKinsey's 7S Model. 1
2. Hofstede's Dimensions of Culture...........................................................................................2
3. Evaluation of Ethical and Sustainable Factors........................................................................3
4. Factors Affecting Decision Making in Global Context..........................................................4
5. Strategic Expansion Routes with Advantages and Disadvantages.........................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Global business environment refers to the environment in different countries which
influence the decision making process and capability of an organisation. It can be divided into
two parts: internal and external environment. Global business environment mainly focus on
external environment which includes political, technological, social, cultural and regulatory
factor (Barnwell and et. al., 2014). This report is based on SASOL Limited which is a type of
public company. It was founded in 1950 and its headquarter is located in Sandton, South Africa.
This company is based on oil and gas chemical. In this report there will be a discussion about
concept and factors of globalisation. Impact of digital technology on globalisation is also
included in this report. PEST analysis and strategic challenges will discuss. Apart from this,
McKinsey's 7S model and Hofstede's dimensions culture model will discuss. At last, ethical and
sustainable factors and its impact on decision making in global market will discuss.
PROJECT 1
TASK 1&2 (Covered in PPT)
PROJECT 2
TASK 3&4
1. Structure, Culture and Governance of Organisation by Applying of McKinsey's 7S Model
SASOL Limited apply corporate governance structure which considers to delivering of
sustainable growth. Board of directors set the direction for the group and take effective
judgement and ensure that risk and sustainable development which are appropriately balanced.
SASOL Limited is focuses on health and safety of social culture. They involve
productive employees with required knowledge and skills in their organisation.
Mckinsey's 7S Model
This model was formulated by McKinsey in 1970 which is the well famous consultancy
firm in US. It is based on effective organisational changes to interpret the complex relation
between difficult components. 7S are describe as follows:-
Shared Value- It is an interconnecting center of sharing values. This model describe that
SASOL Limited is stand for what and what are their values, beliefs and attitudes. They focus on
their social culture and decide their goals and objectives (Belás and et. al., 2014).
1

Strategy- It represent the plan of allocating scarce resources to identified objectives.
Demand of products in SASOL Limited are increases or decreases and there is also pressure
from competitors in global market. So, company have to make policy as per beat competition
and gain more profit.
Structure- It refers to the different ways which are interrelated with each other. They
focuses on organisation structure of SASOL Limited it may be centralised or decentralised and
the way of communication which is depends on their structure.
System- Every organisation follow a particular system or procedure to execute their task
and different activities. A system followed by SASOL to globalised their firm is that
arrangement of finance, recruiting and selecting of applicants, providing training and
development, assigning task, evaluation, promotion and many more.
Staff- It refers to the types and number of employees exist in an organisation. Structure of
SASOL Limited is based on the types of human resource. They identify the need of employees to
fill vacant positions (Blodgett, Hoitash and Markelevich, 2014).
Style- It deals with different style of leadership used by a leader to achieve organisational
objectives. Culture of SASOL Limited is different as per their employees. It is a responsibility of
a leader to identify needs of employees and motivate them as per their needs by which they
perform better task in global market.
Skills- There are different types of skills and capabilities which employees have in an
organisation. SASOL Limited have different employees with various set of skills. Manager have
to analyse their skills and conduct training program for improve their knowledge and skills.
2. Hofstede's Dimensions of Culture
Evaluation
McKinsey's 7S are applied in organisation to interpret the complex situation. This model
is useful for SASOL Limited when they want to expand their business in global market. It
focuses on shared values, skills, staff, style, strategy, system and structure of an organisation.
When company follow all these components carefully in their business activity they can
definitely sustain long run in international market and earn huge profit.
Hofstede's Dimensions Model
2

It was formulated by Hofstede which provide values to various cultures. It make impact
on both area of workplace and cultural behaviour of society. There are mainly six cultural
dimensions in Hofstede's model which are as follows:-
Power Distance- It refers to the difference between member of society as per power.
Some people are more powerful and some are less (Brannen, Piekkari and Tietze, 2017). There is
an unequal distribution of power in society which make effect on business activities of SASOL
Limited.
Uncertainty Avoidance- It refers that people of society are avoid to uncertainty. They
want to live in a comfort zone. There are many types of challenges faced by SASOL Limited at
the time of expansion of business in international market.
Individualism vs. Collectivism- It refers that some people want to live alone and some
give prefer to live with society or in a group. They make close network with different cultural
societies (Cavusgil and Knight, 2015).
Masculinity vs. Femininity- Masculinity refers to society's preference in order to get
rewards, achievements etc. While, femininity refers to preference of society for corporation and
better life etc. SASOL Limited have to focus on both type of people in business expansion.
Long term vs. short term orientation- Long term orientation refers to that culture who
strongly works to developing absolute truth. Whereas, short term orientation refers that societies
are searching for moral excellence.
Indulgence vs. Restraint- It indicates that societies give preference to their social culture
and norms. For this, they can control their needs and desires.
3. Evaluation of Ethical and Sustainable Factors
Ethical Factors
Ethics implies that behave ethically and performing good work in an organisation. It is
important for every firm to make ethical environment in company which encourage employees
for better performance. In SASOL Limited, ethical factors are as follows:-
Customer Ethics- It is focus on employees relation with customers. When employees of
SASOL Limited are perform their task effectively and efficiently in organisation then it enhance
the brand image of company. Company should have to focus on customers demand and make
product as per their needs (Deasy and et. al., VMware Inc, 2016). They also make better relation
with customers because customers are helps an organisation for better growth and development.
3

Ethical Climate- This factor deals with external and internal environment of an
organisation which make impact on their business activities. It is a responsibility of SASOL
Limited to make ethical climate and environment which helps to increase coordination among
employees for better performance.
Sustainable Factors
Sustainable factors are helps an organisation to retain long run in market. It include
following factors:-
Adaptability- This factor states that SASOL Limited have to adopt new things and
different cultures. When firm adopt new things then they can expand their business in foreign
countries. When a company think to enhance their firm in global market then different types of
policies and culture need to adapt for long term sustain.
Focus on Strategy- Company have to focus on their plans and strategies to retain long
term in market. It is necessary for SASOL Limited to make strategy in order to gain more profit,
expansion of business and cope up with different situations arises in business environment.
When is focuses on all these strategies then they can easily sustain long run in future.
4. Factors Affecting Decision Making in Global Context
Ethical and Sustainable factors are affect the decision making power of managers and
leaders in context of global business environment. In ethical factors, company have to make
decision regarding to create an ethical environment which encourage employees to work in a
team and contribute their efforts to expand the business in global market and achieve
organisational goals and objectives (Kolk, 2016). Sustainability factor also affect the decision
making of manager of SASOL Limited. Government policies are changes and differences occur
in culture of global market. So, company have change their decisions as per the rules and
regulations made by government.
5. Strategic Expansion Routes with Advantages and Disadvantages
Strategic expansion routes means there are mainly two paths SASOL Limited have at
time of making strategy of expansion of business in global market i.e. exit and succession. Here,
company want to select the path of succession. For succession planning company can merger and
acquisition. It is describe as under:-
Merger and Acquisition
4

Merger refers to the combination of two or more firms whereas acquisition refers to
purchasing of one company by other firm. Main objective of merger and acquisition is to
maximisation of profit and wealth. When company want to expand their business they they use
the technique of merger but when an organisation want to continue their business activities
through others then they sell their firm to other. SASOL Limited want to use the technique of
acquisition for succession.
Advantages and Disadvantages of Acquisition
Advantages Disadvantages
It is a quick and easy way to growth and
succession of a firm.
It can be more expensive and clashes the social
culture.
It enhance the reputation of SASOL Limited. Acquisition of firm in foreign country is a
difficult task.
It helps to overcome the barriers of entrance in
global market.
There is a high risk available in acquisition.
CONCLUSION
From the above discussion it can be concluded that globalisation is an important concept
to expand the business in international market. Digital technology is important for an
organisation for expansion. PEST analysis is necessary to analyse the global market condition.
McKinsey's model and Hofstede's model are influence the organisation to expand their business
in global market. Ethical and sustainable factors affect decision making in global context. Firm
can expand their business in global market for better growth and success.
5

REFERENCES
Books and Journals:
Barnwell, D. and et. al., 2014. Leadership of international and virtual project teams.
International Journal of Global Business. 7(2).
Belás, J. and et. al., 2014. Significant attributes of the business environment in small and
meduim-sized enterprises. Economics and Sociology.
Blodgett, M. S., Hoitash, R. and Markelevich, A., 2014. Sustaining the financial value of global
CSR: Reconciling corporate and stakeholder interests in a less regulated environment.
Business and Society Review. 119(1). pp.95-124.
Brannen, M. Y., Piekkari, R. and Tietze, S., 2017. The multifaceted role of language in
international business: Unpacking the forms, functions and features of a critical
challenge to MNC theory and performance. In Language in International Business (pp.
139-162). Palgrave Macmillan, Cham.
Cavusgil, S. T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization. Journal of International Business
Studies. 46(1) pp.3-16.
Deasy, S. and et. al., VMware Inc, 2016. Controlling use of a business environment on a mobile
device. U.S. Patent 9,247,042.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
6