Strategic Analysis of Globalisation for SASOL Company Growth

This report provides a comprehensive analysis of the global business environment, focusing on SASOL, a global integrated chemicals and energy company. It explains the concept of globalisation and its impact on international businesses, using PESTLE analysis to illustrate the broader influences affecting SASOL. The report evaluates the key driving factors related to globalisation, the significant impact of digital technology, and the challenges and complexities it brings for SASOL. Furthermore, it includes recommendations for SASOL to grow in the marketplace, discusses the company's structure, governance, and culture using McKinsey's 7's framework, and evaluates the influence of international operations. The report also applies Hofstede's model, considers ethical and sustainable factors, evaluates strategic decision-making in relation to risk and diversification, and critically evaluates global expansion routes available to the organisation. This document is available on Desklib, where students can find similar solved assignments and study resources.

Global business
environment

Table of Contents
PART 1(ALSO SUBMITTED AS PPT).........................................................................................3
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................4
TASK 1 ...........................................................................................................................................4
Concept of globalisation.........................................................................................................4
PESTLE analysis to illustrate broader and global influences on SASOL Company.............4
The analysis of key driving factors related to globalisation...................................................6
The evaluation of significant impact of digital technology upon globalisation.....................7
The critical evaluation of challenges and complexities globalisation brings for the SASOL
Company.................................................................................................................................8
Recommendations for SASOL company to grow at marketplace..........................................9
CONCLUSION..............................................................................................................................11
PART 2..........................................................................................................................................12
Explaining the structure, governance culture, in a company applying McKinsey's 7's
framework.............................................................................................................................12
An evaluation of how the above discussion has been encouraged by international operations &
how the business has been influenced..................................................................................14
Applying the dimensional culture through Hofstede model ................................................14
Ethical as well as sustainable factors of business that is considering within global market 15
Evaluation of strategic decision making in relation to risk and diversification in a global
context..................................................................................................................................15
Critical evaluation of the range of strategic global expansion routes available to the
organisation..........................................................................................................................16
CONCLUSION .............................................................................................................................17
REFERENCES..............................................................................................................................18

PART 1(ALSO SUBMITTED AS PPT)
INTRODUCTION
The Global Business environment means the surrounded area in which international
organisations operates business functions in a precise manner. It is tough for companies in
international market to operate as it includes many factors like the risk of politics, different
culture , legal and taxation issues, risk of exchange and so on. Globalisation plays a important
role in the development of country as well as its economy. It is necessary for the management of
a business in international market to work on all the factors that affects environment of their
business. Globalisation helps the the business to expand, exposure to more customer, help to
manage their product life cycle all across the globe. In this project example of SASOL is taken
into consideration which is global integrated chemicals and energy company. SASOL is an
energy and home services provider in the South Africa. The company was founded in 1950 and
is known globally for world class products and services like Bitumen and Greases. SASOL
company is headquartered in Sasolburg, South Africa. In this project the concept of
globalisation with all of its major dimensions are explained in a precise manner. This project
includes macro environment analysis of SASOL order to understand its long and short term
influence on company. This project also includes critical evaluation of challenges and
complexities globalisation brings for the SASOL.

MAIN BODY
TASK 1
Concept of globalisation
The globalisation is a major term which includes the revolution that created a huge
impact on world by allowing trade of goods and services across the countries. Globalisation is
considered as major turning point in history of world which allowed many international
companies conduct export and import practises. Globalisation is majorly referred to the art of
developing free trade movement of goods and services across the countries. It also allowed
SASOL Company to enter international business market by selling chemical products to different
customers and industries in different countries. Globalisation is majorly supported by
information and technology in this competitive world as it involves use of advanced computer
systems and software in business operations.
PESTLE analysis to illustrate broader and global influences on SASOL Company
PESTLE Analysis is mainly used by SASOL Company to analyse or identify all the
external factors that affect the macro environment of company. PESTLE analysis influences on
SASOL Company in many different ways and there is a strong need to scan the environment of
South Africa as well as globe. PESTLE is a acronym of Political, Economical, Social,
Technological, Legal, and Environmental factors and these factors are discussed below:-
Political Factors
There are many types of Political factors that must be analysed for the SASOL Company
in order to lead the global market. Political factors has a great impact on SASOL company due
instability of government, or by changing rules and regulations related to taxation , etc. SASOL.
After Brexit SASOL has to face many challenges like problem in managing supply chain of
products and availability of raw materials.
Economical Factors
World economic conditions like trade tariffs, Octroi can also affect the business
environment of SASOL Company as it can increase cost of products. Increasing unemployment
rate and increasing oil and chemical prices which cause inflation in the economy as a result
purchasing power of people is decreases.
Social factors

There are many social factors present in the business environment which affect on
functioning of SASOL company. Culture and traditions of society has main impact on SASOL
company and they determine internal environment of the company. In the recent times major
companies in international market consider social factors to perform operations in international
market. SASOL also performs corporate social responsibility in order to take care of weaker
sections of society. The social factors like living standard of society and availability of
manpower are also main factors that impact on external environment of the company.
Technological factors
In the stiff competition era it is essential for a company to briefly analyse all the
technological factors in a precise manner. In the competitive world, it is essential for SASOL
Company to use advanced computer systems and software to grow at marketplace. SASOL
company should also focus on analysing big data technology in order to maintain large set of
data of different customers. The technological factors are important in order to formulate
accurate and quick operations. Many companies in international market focus on the main
technological factors and hire professional IT experts to deal with several business operations. In
order to grow at marketplace in a systematic manner it is compulsory for a company like SASOL
to hire IT experts. In recent times, main organisations in market also use artificial intelligence in
order to perform accurate operations..SASOL uses a software which is Data management
software (DMS) is software that takes in data and converts various kinds of data into a single
storage container, or aggregates diverse data into a consistent resource, such as a database.
Legal factors
It is important for SASOL Company to deeply analyse all the legal factors as they include
rules and regulations which are formulated by local authorities. The legal factors are considered
as major rules and regulations which are formulated by local authorities for a business. Legal
factors should be followed by SASOL Company in a systematic manner in order to develop
perfect business. It is essential for a business entity to focus on laws and policies developed by
government in order to maintain safe and secure workplace environment. SASOL company
applies employment laws like Employment and labour laws regulations 2021 and equality act of
employees in a precise manner to conduct ethical business.
Environmental factors

The environment related factors are important for a business in order to develop
sustainable practices. Environment related policy of government is followed by SASOL
Company to conduct effective environment related practices. It is important for a business to
take care of environmental policies in order to develop ethical and sustainable practices. The
environment related policy of government motivates companies to take care of environment.
SASOL also follow government policy and decomposes the chemical waste using advanced
technology. SASOL mainly follows Carbon emission policy which is developed by government
of South Africa to take care of external environment.
The analysis of key driving factors related to globalisation
In the concept of globalisation, there are various factors which effect the functioning of
company in a precise manner. It is important for a business firm to focus on driving factors of
globalisation for better trade practices. All the business organisations which are functioning in
the international market should focus on driving factors related to globalisation. The key driving
factors of globalisation which are important for SASOL Company to accelerate operations in
market are mentioned below:
 Partnership between countries- In recent times, partnership between various countries
are rising due to globalisation. Many countries in current competition scenario are
focusing on facilitating trade practices with legal agreement. The trade partnerships
between the major countries allow less tariffs and duties on exchange of goods. Many
international companies are benefited by the help of this approach. Trade between
various countries also allow movement of goods through fix decided routes which helps
in fast exchange of goods. SASOL supplies chemical products to many different
countries on effective rates under trade partnership associated with different countries.
 World Trade Organisation- The World Trade Organisation is a major body of United
Nations which is established to control and promote trade practices. Many companies
follow the rules and regulations which are formulated by World Trade Organisation to
follow ethical practices. It is compulsory for a company to develop ethical practices
related to globalisation in order to gain immense success in market. In the international
market World Trade Organisation formulates many trade laws that are compulsory to be
followed by a business entity in order to survive in market. From very beginning SASOL
is following all rules developed by WTO to conduct ethical trade practices.

 Rising investment opportunities- Many countries in recent times focus on developing
policies which includes increasing investment opportunities. The rising investment
opportunities always make it possible for international companies to earn huge profit in
market by accelerating investment opportunities. Many countries like South Africa, USA
and Japan gives attractive offers to multi-national companies to enter the market which is
a major turning point. The investment opportunities are also rising due to trade
agreements between different countries. SASOL is planning to enter market in various
countries like India and China as there is a good scope for investment in these countries.
 Availability of cheap labour and resources- In many countries there is a cheap
availability of labour which makes investment easy by the companies. The companies in
international market select appropriate countries where there are cheap resources
available. The companies in international market mainly rely on availability of major
resources at cheap rates in order to increase the turnover in a perfect manner. In many
developing countries, there is an availability of cheap labour which makes a company
competent in market. It is also important for SASOL company to analyse different
countries in context of cheap labour and formulate operations related to cheap labour in
the best available country.
The evaluation of significant impact of digital technology upon globalisation
In the development of a business in international market, information and technology
play a very crucial role. Digital technology is upgrading day by day, so it is essential for a
business like SASOL to use updated information and technology for better business operations.
In the era of stiff competition between several companies in international market to hire
professional IT experts in order to perform business functions in a quick and smooth manner.
The impact of digital technology on globalisation is mentioned below:
 Business development- The business development is priority of every organisation, so it
is essential for a business to take assistance of digital technology. A company like
SASOL majorly develops information and technology in order to perform growth and
expansion of business. Digital models like Freemium, subscription and On- demand
model which are universally adopted by many companies and also helps in business
development by managing Big Data related to customers.

 Reach customers- With the help of digital technology a business can easily reach out
various customers. Internet and social media websites like Instagram and face book helps
a business to advertise and perform publicity of products and services in the whole world.
SASOL can reach out to various customers that are present in global market at faster pace
using internet and social media.
 Privacy and data handling- In the current competitive world, it is essential for a
company to handle and maintain privacy of various customers. The storage and
maintenance of data is also important for every company in international market as there
is large and complex data. The globalisation helps a business firm to arrange and
maintain precise data of customers in an effective manner. SASOL uses advance
technological tools like HIPPA and GDPR that helps the companies to handle expensive
data of customers which helps in relationship management.
The critical evaluation of challenges and complexities globalisation brings for the SASOL
Company
In the long and short run it is compulsory for a company to overcome various challenges
and complexities that are developed due to globalisation. The main challenges and complexity
faced by SASOL Company in international market are mentioned below:
 More amount of investment- In handling major operations of a company it is essential
for the organisation to perform huge cost on expenditure. The companies which are
functioning in global market incur large amount of expenses and require effective
financial management to manage the cash flow. The requirement of funds in the business
operations in international market is high and company has to arrange funds on the basis
of requirement in international market for survival. The assets like plant and machinery,
infrastructure and furniture requires huge amount of cost for SASOL company.
 Handling a huge number of operations- In the international market it is major role of a
company to handling significant amount of operations in the international marketplace.
The companies have to handle large number of operations in a crucial manner to establish
in the international market with effectiveness. It is important for a business firm to handle
large number of operations in a systematic manner by management of financial resources.
The operations of business are important to be handled with utmost responsibility in
order to develop an ethical approach.

 Application of management rules- The management rules and regulations should be
scientific and systematic in order to handle major operations of the company. The
international companies requires professional management in order to handle business
activities and functions in a systematic manner. Rules of management should be similar
for all the employees and it should be kept in mind by a business organisation to apply all
the rules and regulations in a systematic manner for long term business development.
Management rules related to functioning of business like ethical, sustainable and
development helps SASOL to handle large number of employees.
 Risk- Risk is important part of international business, so it is essential for management to
apply risk evading techniques in order to grow the business. Risk is important part of
business and it is major responsibility of top level management to eliminate risk. SASOL
company applies models of risk elimination like market risk and value at risk with the
help of strategic management to grow at marketplace with great stability.
Recommendations for SASOL company to grow at marketplace
It is the necessity of every company to lead the competition and grow at marketplace in a
set period of time. It is also main role of top level and strategic management of a company to
develop in international market by following useful recommendations. The recommendations
helps a company to generally grow in market with major advantage in order to gain competency
edge. The main recommendations for SASOL Company in order to grow in international market
are mentioned below:
 It is recommended for a SASOL Company to hire professional and skilled IT
professionals in a company to formulate digital technology related operations in a
systematic manner.
 The SASOL Company should take advice and support of professional management
expertise in order to rule the international market.
 SASOL Company must also install advanced computer systems and software like
word processing programmes, payroll software and asset management software to
handle major operations related to the business.
 The company should also focus on implementation of various universally adopted
models like systems and human relation theory for long term growth of the
business.

 SASOL Company should take into account and develop risk management
approaches like retention, sharing and transferring in order to minimise risk
associated with various operations.

CONCLUSION
From the above discussion, it can be concluded that it is compulsory for a company in the
global market to implement operations related to digital technology for business development. It
is major responsibility of top level management to focus on various dimensions of professional
practices in order to grow in international market. This project includes the importance of
PESTLE analysis in order to analyse external environment related to a business. This report also
concludes the value of key factors that has contributed to rise of globalisation and its dimensions
in the contemporary world.

PART 2
INTRODUCTION
In the functioning of a business, there is an important role played by McKinsey's 7s
framework and Hofstede model in understanding the culture of organisation. In the business
environment it is important for many multi-national companies to prepare a precise business
strategy that is effective in business planning. In the long run, it is necessary for a business entity
to develop risk assessment for minimising risk associated with the operations in a systematic
manner (Le, 2018). This project includes the application of Hofstede model of culture and
Mckinsey's 7s framework in the company. This report also covers the role and value of strategic
management in decision-making in international market. In this report example of SASOL
Company is considered, which is an utility provider company which provides its services to
different industries within a area of South Africa and also in major parts of globe. SASOL
Company was founded in 1990 as a limited type of company and its head quartered in Sasolburg,
South Africa.
Explaining the structure, governance culture, in a company applying McKinsey's 7's framework
McKinsey's 7's is a major a tool used by many business organisations in order to deeply
analyse culture and structure of a company. The main motive behind the implementation of
McKinsey's 7's framework in SASOL is to develop the effectiveness of business operations
which are required by company to dominate in international market. The McKinsey's 7's model
includes system, strategy, staff, style, structure, shared values & the skill. The application of this
model for SASOL is mentioned below: Structure: Under this approach structure play a crucial role in development of various
functions related to a business. The structure is considered as major approach which is
beneficial in deciding delegation in a company. Structure of SASOL company is
organised in nature which helps a company to develop in the international market.
 Strategy: In the competitive world it is essential and necessary for a business entity to
develop an effective strategy by keeping in mind culture of the business (Matheson,
2018). The strategy is also major plan which is formulated by a business in order to lead
the marketplace. Strategy is also considered as major approach in developing business
plan and policies that are effective in formulating management policies. Many companies