A Case Study in the Oil and Gas Industry

Introduction

In the recent era of globalisation, the multinational corporate firms develop effective strategic planning and utilise the drivers of globalisation to establish the business efficiently in the market. The aim of the study is to analyse the operations and functions of the organisation Sasol Limited, which operates in South Africa. Through this study, it is also possible to demonstrate the factors including ethical and sustainable, to analyse the impacts of the factors of globalisation influencing the business operations, functions and structure as well as culture. The organisational culture, structure of the firm, operational functions and culture will be evaluated where the globalisation drivers influence the decision making practice of the organisation Sasol to expand their business sustainably in the oil and gas industry. If you need business dissertation help, considering all these factors will be very vital for understanding Sasol's strategies in the global market.

Organisational background

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise to conduct their business where there are more than 31270 people working in 32 countries. Developing commercialise technologies and building world scale operational activities are effective in the company, where Sasol is successful to deliver high quality products including fuels and chemicals and low energy electricity (Sasol, 2020a). The vision of Sasol is,

“To be a leading integrated global chemical and energy company, proudly rooted in our South African heritage, delivering superior value to our stakeholders” (Sasol, 2020b)

Figure 1: Organisational logo

The purpose of ding he business in such an era of globalisation is to create superior values for the customers, shareholders and other stakeholders including the government of the international countries, social communities, employees, distributors and managers. The talented workers in the organisation are efficient to safely and sustainably produce, source the chemicals and energy products competitively. The values of the company are such as,

Ensuring safety and healthy environment

Caring our people and developing their skill

Act with respect and integrity

Promote diversity and inclusion

Comply legal requirements

Ownership and accountability

Deliver great values to all the stakeholders

The organisation aims at fulfilling the organisational vision and maximise the values so that it is possible to run the organisation efficiently and gain high competitive advantage in such an era of globalisation (Sasol, 2020a).

Evaluating global market influences an organisation’s structure, culture and functions

Global market activities influence the organisational structure, culture and functions, where the firm is able to expand the business strategically. In such an era of globalisation, the company Sasol is also efficient to develop effective structure and functions to run the business efficiently. As per the McKinsey’s 7S model, it is possible to demonstrate the factors which are necessary to run the business sustainably (Lasserre, 2017). As per the model, there are 7 factors which are structure, system, style, staff, skills and strategy, which are effective to run the business sustainably. The globalisation drivers influence the organisation Sasol to create effective organisational structure and functions, so that it would be possible to run the organisation efficiently. The major functions of the firm Sasol are such as business administrative activities, operations, marketing and sales management, finance management and production and manufacturing of the oil and energy. The functions are effective for the organisation to run their business efficiently.

On the other hand, the company is also efficient to manage the staffs, who are the major stakeholder of the business to run their operational activities efficiently. In this regard, the values of the organisation includes providing personal and professional development opportunities, creating values for the employees through monetary and non-monetary incentives and this strategic planning to manage the staff is beneficial for the company to maximise their operational efficiency and expand their business strategically. In the recent era of globalisation, technology is playing a crucial role which influences the company to manage their skill and capabilities of the employees, where the company invest major capital and develop research and development activities in order to enhance the technical skill to produce energy and fuel. Skill developmental activities are hereby beneficial for the organisation to enhance their organisational functions and secure future sustainable development. Technology transfer, employee migration and the technological advancement are also the drivers in the globalisation pace, where these factor influence the firm to develop proper structure by considering the above men tied seven factors including strategy, staff, skill and system. The automation system in this regard is also effective for the firm to manage the operations and manufacturing unit. In the other hand the company is also efficient to develop proper structure and in this regard, Sasol focuses on developing vertical structure according to the business functional units. The CEO of the organisation manages the departmental heads where there are different department in the company according to the business functions. In the recent era of globalisation, vertical structure according to the functions of the business is effective for running the organisational activities efficiently. In this context, the departments of the company are finance, operations and management, human resource, marketing and sales, production and manufacturing unit, where the departmental heads are efficient to manage the functions in each department and create organisational values. Hereby, as per the McKinsey’s 7S model, the firm is efficient to develop effective structure and business functions to expand their business and run their operations across 32 countries around the globe. The era of globalisation further influence the business structural units and functions to establish the fir in the oil and gas industry across the globe and make the business sustainable by creating sustainable energy resources (Sasol, 2020b).

In addition o this, culture is playing another crucial role in running the business efficiently and in this regard, the globalisation drivers influence the organisations to develop suitable culture so that the workers can contribute positively in the workplace and they can work with freedom and harmony in order to achieve the organisational success. Sasol Limited is also efficient and the management team is concerned about developing suitable culture in order to ensure good workplace and maximise the values for the employees and also other stakeholders, engaged with the business. For running the global operation of the business, it is essential for the organisation Sasol to develop suitable culture to make the workplace efficient and productive. As per the Hofstede’s Dimensions of Culture, there are different dimensions through which the culture of the organisations can be demonstrated and the dimensions are such as individualism, power distance, certainty, achievement, time orientation and indulgence (Sasol, 2020d).

Figure 3: Hofstede’s Dimensions of Culture

The company Sasol focuses on group orientation for enhancing interdependence, rather than individualism, where the partnership working practice and enhancing cooperation and collaboration at the workplace are seen at the workplace and this further helps the organisation to develop suitable working culture. On the other hand, power distance influence the company Sasol to develop participative orientation where the individuals are responsible with their own role and they try to share their roles and power with each other for developing friendly atmosphere at the organisational workplace. By considering certainty, the company focuses on tolerance of ambiguity in order to enhance the innovation and creativity to perform better in the organisation. Additionally, the company focuses on quality of life orientation under achievement where Sasol focuses on maximising the organisational goal and achieve future success and simultaneously the leader is also concerned about creating values for the stakeholders, engaged with the organisation. Globalisation drivers further influence the company to develop short term and long term goal, where in short term, Sasol focuses on fast adaption and on the other hand, it focuses on market expansion in long run so that they can gain high competitive advantage over other competitive firms in the global oil and gas industry in such an era of global competitive market. For indulgence, they focus on restrain orientation for managing work ethics and encourage the employees to achieve success through cooperation and communication.

In this regards, apart from the organisational structure and nations, the drivers globalisation also influence the company Sasol to develop suitable organisational culture so that it would be possible for the leaders and the managers of the organisation to provide suitable working atmosphere to the employees for enhancing their productivity and performance. In this regard, safety culture at the workplace is one of the major strategies to develop suitable culture, where the company is successful to strengthen their employee base and manage the safety and security of all the workers. Additionally, the leader and the managers of the company are also efficient to improve the values of the company by creating values for the stakeholders, managing respect and integrity at the workplace as well as manage transparency and accountability, where the managers are successful to build strong corporate relationship by ensuring trust and loyalty among the staff and other stakeholders. (Sasol, 2020e)

Analysing the influence of globalisation on organisational decision making and strategy

Ethical factors its influence on organisational decision:

There are ethical factors that influence the multinational corporate firm to expand their business efficiently. In this regards, the ethical consider is necessary or the firms to expand their business efficiently across the international borders. The payment structure and incentive strategy are major ethical factors that influence the company to restructure their salary and compensations for the employees. Additionally, the health and safety measures are also another ethical factor which further influences the firm to restructure their strategic tactic to manage the staff at the organisational workplace and the globe. On the other hand, the company’s ethical strategies are also influence by the non-discrimination policies and practice to encourage cooperative working practice and maximise the fair treatment at the workplace. Formal policies such as data Protection Act 1998 and Health and Safety at Workplace Act 2015 are also influencing the company to restructure their strategic move to run their international operations. Apart from that, the security measures, hygienic factors and international labour laws are appropriate ethical considerations and legal compliance to maximise the values for the employees and run the organisational activities strategically. Hereby, the ethical factors influence the decision of the organisation Sasol and in this context Sasol develops the strategy of managing health and safety of the employees by providing safe workplace and insurance coverage for all the employees. The benefits for the shareholders and other stakeholders are also there where the leader maximises their values by providing high return on investment (Sasol, 2020h). On the other hand, as per the values, the organisation focuses on fair treatment, managing transparency and accountability and manages cultural diversity to manage the diverse workforce. The ethical factors such as health and safety are also influencing the organisational decision, where the leader maintains safety at the mining and production sites and aim to manage the values for the worker in long run. Complying legal requirements, managing international trade and activities and managing accountability are also the strategic tactic to manage workplace ethics and expand the business efficiently across the workplace (Sasol, 2020i).

Sustainable factors its influence on organisational decision:

There are sustainable factors which also influence the organisational decision to run their business operations in such an era of globalisation. It is the corporate and social responsibility of the firm to manage the sustainability of the business. The factors of managing sustainability in the recent globalisation and digitalisation era are such as product life cycle management, maximising green environmental footprint, developing green supply chain, environmental health and safety, maximising values for the social communities and customer relationship management. These factors are mandatory to influence the firm’s decision in doing the business operations in the globalisation era. For market expansion and conducting the business operations efficiency and sustainably, it is necessary for the organisation to consider the sustainable factors and develop effective decision to run their business in such an era of globalisation. Globalisation is hereby beneficial for the company Sasol to restructure their strategic planning and expand their business sustainably. In this regard, the company tries to develop customer’s relationship management, where the front desk managers and the employees are efficient to serve the customers across the globe. Continuous support and delivering high quality products which is sustainable further maximise the firm’s values in long run (Sasol, 2020f).

On the other hand, the company focuses on restructuring their operations and develop sustainable energy, enhance technologic innovation through creating synthetic fuel technology which further enhances the organisational activities and provides a scope to the firm to achieve future sustainable development. On the other hand, the company is efficient to utilise the sustainable factors and develop the strategic decision in the workplace, where the economic and social responsibility of the firm are managed well. Sasol focuses on generating profitability by enhancing sales volume, so that the economic responsibility can be achieved by providing high return on investment to all the stakeholders including the customer’s employees, distributions and manufacturer, government and managers who are playing crucial role in running the business efficiently. On the other hand, the firm also focuses on social responsibility, by investing capital for social developmental projects and charity which further enhance the education and activities among the social communities. There are different ways of decision making such as analytical, directive, conceptualise and behavioural. The organisation must focus on behavioural technique of decision making where stakeholders engagement is possible. The leader must support the team members, empower them in the decision making practice and enhance communication and cooperation in performing in the workplace. The company in this regard targets to invest more in social development of South Africa in order to mitigate the issue of unemployment, low literacy rate and lack of knowledge among the people. Apart from that, the company also restructure the strategy to protect the environment, by providing renewable resources, managing exploring fuel and gas, protecting natural gas, reducing of greenhouse gas emission and others which provides a scope to the business to expand their business sustainably across the international borders (Sasol, 2020g). Through behavioural decision making practice, it is possible for the organisation to fulfil its mission and expand the business internationally.

Organisational strategic move

There are different routes of internationalisation of the business which are direct export, local agent, franchise, joint ventured business acquisition. These are the major activities, through which Sasol is able to expand their business activities strategically. In this regard, the organisation must focus on direct export through following the ethical and sustainable solutions. This is beneficial for the company to manage their activities globally and gain high competitive advantage. The major challenges in internationalisation are such as lack of company structure in the global market, difficulties in maintaining foreign laws and legislative structure, fluctuation in international currency, problems in universal payment methods, lack of market knowledge and efficacy of the team members, inefficacy in choosing the global shipment methods and cultural differences. It is hereby necessary for Sasol to identify the existing business issues and strategize the operations legally, so that Sasol would be able to expand their business activities across the international markets. The ethical and sustainable factors are hereby effective to manage the international business, where the drivers of globalisation, ethical and sustainable factors are influencing the organisational decisional and strategic planning to run their business efficiently.

The factors also influence the strategic planning of Sasol, where the vision of the company to expand their business internationally by creating values for all the stakeholders. The three major strategic focus of the organisation are energy, chemicals and upstream. Liquid fuel and gas and oil are the major products where the company focuses on delivering quality products and continuous efficient services to the customers for expanding their business international. In order to gain high competitive advantage, the company hereby aims at managing high quality standard of the products and improve customer’s relationship management. The strategic planning of the organisation for managing operations is driving world class safe operations and to support growth. For upstream operations, Sasol focuses on low cost production to manage the economies of scale and deliver the products at effective price level. This is one of the major strategies, where globalisation drivers influence the brand for sustainable development.

Figure 4: Strategic planning of Sasol

Growing low carbon power generation, optimum energy production and develop synthetic fuel producing technology are also the strategic move of the company to secure future sustainable development in the global oil and gas industry. Value chain management and green supply chain management are also the strategic planning, to manage their international operations. Hereby, the key performance indicators are high return on invested capital, net debt management, quality based earning growth, reduction of green house gas emissions, managing safety and encouraging economic empowerment. Hereby, the strategic planning of Sasol is advantageous to gain high competitive advantage, where the company is successful to utilise the drivers of globalisation and utilise the drivers for better management of the organisational operations and resource allocation to achieve future success. The strategic planning is also beneficial to enhance technological innovation and creativity of the firm to protect the interest of the stakeholder and maximise the organisational values in long run and it further helps to generate profitability and secure future sustainable development (Sasol, 2020b).

Conclusion

The drivers of globalisation including ethical and sustainable are influencing the strategic planning and tactics of the companies to expand their business across the globe and gain high competitive advantage. The company Sasol is also efficient to restructure their operational strategic planning to maximise the values for the stakeholders and deliver high quality products in order to gain high competitive advantage in the international oil and gas industry. The company is also responsible to manage sustainability of the business by creating sustainable resources, energy and liquid fuel were the aim of the company is to protect the natural resource and provide green environmental footprint.

Reference List

Lasserre, P., 2017. Global strategic management. London: Macmillan International Higher Education.

Möller, K. and Halinen, A., 2017. Managing business and innovation networks—From strategic nets to business fields and ecosystems. Industrial Marketing Management, 67, pp.5-22.

Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). London: McGraw-Hill Education.

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