Globalization and SASOL Company: Unraveling the Nexus of Structure, Culture, and Governance

Introduction

Globalization can be referred to as the process of incorporation internationally due to constant exchange of products, ideas, world views and cultural traits. The main drivers of globalization are mainly advancements in telecommunication, transport and infrastructure sectors (Eriksen, 2016). The internet has caused a huge international integration stimulating trade. For businesses looking in place to navigate this interconnected landscape, seeking business dissertation help can provide the most valuable insights into the dynamics of global markets. Global monetary systems like PayPal has fastened economic integration between different countries worldwide.

Organizations have different goals due to their differences in structure, governance, leadership-p and culture. To look into globalization one needs to focus on the above concepts. Culture is a set assumptions, values and beliefs common between organizational members. Structure is the framework within which an organization identifies line authorities allocates duties and rights and communicates. Governance can be defined as a set of policies, customs and procedures that impact the control of an organization (Eriksen, 2016). SASOL Company is a fast-growing energy and chemical company, based in South Africa. The company has also expanded into Mozambique, Canada, Gabon and Australia, and hope to expand into other countries soon. To look into the impact that globalization has on the company`s structure, culture and governance this paper will deploy McKinsey’s 7S model and a checklist.

The model is comprised of strategy, systems, structure, staff, shared values, skills and style (Ravanfar, 2015). SASOL limited makes use of the model in instances where there is no clarity governance and structure for certain activities. Systems and structure are the hard S while shared values, skills, style, and staff make up the Soft S.

Strategy

A plan through which an organization gains competitive advantage and maintain existence in the market. SASOL strives to have a clear strategy so as to be competitive in relation to culture, governance and structure. Types of customers, local market conditions, global market and regional market are some of the factors that the company looks into before deciding where to compete. Management, fund and market options drive how the firm puts resources together and how to shift.

Structure

This is the organization and availability of various departments within the institution with the aim of achieving accountability. SASOL Company runs operation in different companies and in order to come up with a clear structure it looks into the division of teams in terms of skills and expertise.

Systems

This is referred to as the procedures and processes within a company that drive the process of decision making and performance of activities. Changes in organizational culture and structure is the main tool that SASOL deploys in determining different regional performances. Interpretation, path setting, decision making and problem finding are the key parameters used considered.

Skills

Skills is the capability to perform various activities with capabilities such as style of leadership. SASOL Company uses different leadership to carry out various function in the regions that it does business. The factors that it uses to determine what skill set is needed are anchored on business and non-business system functions, special management challenges.

Staff

Staff is defined as different manpower aspects of a company. SASOL limited comes up with different leadership styles and culture to be able to conveniently manage their huge staff all over the world.

Style

This is a representation of the manner in which a company is run by top-level managers, the decisions they take, how they interact and what they symbolize.

Shared Values

This is the core of McKinsey 7s Model. It refers to the standards and norm that control the action of the company and behavior of its employees (Ravanfar, 2015). SASOL has a strong employee culture that promotes partnership and hard work while enabling it to take strategic and profitable actions.

As SASOL seeks to get into new markets and expand internationally, the company must take into consideration ethical and sustainability issues. There are serious ethical and sustainability challenges that the company is bound to face in the new markets it ventures in so as to be successful in expanding. Trust and integrity, outsourcing, child labor, working conditions, diversity in the workplace, equal opportunities, bribery and corruption, religion, supervision oversight, human rights, environment and politics are the common issues that the company has to consider (Daft et al., 2014). There is an expectation for full compliance with environmental laws, state and federal safety regulations and monetary and fiscal reporting status. Civil rights laws are also to be fully complied with. Cultural considerations means that there are unique traditions, code of ethics, history and customs to be considered in each area that the company wants to set up. This is crucial for the company to be able to win customers support and gain competitive advantage in the market. Due to the rapid growth of businesses internationally the business needs to look at qualified professionals that have knowledge of the global markets, ethical issues, cultural considerations and business practices (Wankel, 2008).

Hofstede dimension is a framework deployed to understand cultural differences across countries and to determine the manner in which business is conducted in these cultures (Bakir et al., 2015). The theory looks into six categories that influence culture namely the power distance index, collectivism vs. Individualism, Uncertainty avoidance index, feminity vs. masculinity, short term vs. long term orientation and restraint vs. indulgence (Minkov et al., 2017, pg. 386).

Power Distance Index

It looks into toleration extent of power and inequality from the view point of the followers (Bakir et al., 2015). High power distance index points out to culture accepting power differences and inequalities, high respect shown to authority and rank and bureaucracy encouragement. In lower power distance index culture advocates for flat organizational structures, emphasizes power distribution, participatory management and decision making that is decentralized.

Individualism vs. Collectivism

Takes into consideration the extent to which societies are joined into groups and how they are perceived to depend and be obliged to these groups (Minkov et al., 2017, pg. 386). In individualism high importance is placed in realizing personal goals. Meanwhile collectivism advocates for the well-being and goals of the group.

Uncertainty Avoidance Index

Looks into the extent to which there is tolerance of uncertainty. High uncertainty avoidance index has low uncertainty tolerance and risk taking through strict regulations while low uncertainty avoidance has a high tolerance level for uncertainty and encourages taking risks (Vasile, 2016).

Masculinity vs. Feminity

Looks into societal preference for achievements in regards to sexuality and behavior. There is assertiveness and unique gender roles in masculinity which focuses on building wealth and material achievements realized. On the other hand feminity takes into account nurturing, fluid gender roles and is modest with it being mainly focusing on the quality of life

Long term orientation vs. Short term orientation

Long term orientation is concerned with the future and if necessary will put on hold short-term success so as to be able to achieve the long-term goals set (Bakir et al., 2015). It puts emphasis on perseverance and persistence. On the other hand short-term orientation looks into the immediate future and delivers short-term gratification or success. It places main concerned on respect for tradition and quick results.

Indulgence vs. Restraint

Describes how far a society is willing to go in order to fulfill its desires. Under indulgence there is free fulfillment regarding to having fun and enjoying life while restraint suppresses fulfilment needs (Vasile, 2016).

Business globalization has a significant impact on how decisions are made by managers. For decision making to work effectively in a global context the following factors have to be taken into account (Yildiz et al., 2015). Business conditions, cultural dynamics and political conditions. Business conditions that the company operates in needs to be carefully looked at. This is because it has an impact on how leaders make decisions, decide on the specific action plans, and come up with alternatives (Autio, 2017). Cultural dynamics consider management practices that are acceptable, expectations on compensation, participation of employees and balance between work and life. Political conditions requires that policies of different governments are looked into as governments are largely involved in coming up with tax policies and implementing fiscal and monetary policy (Autio, 2017). Lastly on the economic front a decision maker must look into the economic involvement between various countries and global crisis. There should be an inclusion of trade policies, non-governmental organizations, industrial labor and practices in the making of long term decisions.

The method that a company intends to use in expanding to new foreign markets is highly important. The strategies that can be used include exporting, countertrade, licensing, foreign production, joint ventures, export processing zones and ownership (Yildiz et al., 2015). Exporting is the oldest forms used by businesses to set up in new countries as much as it does not require direct manufacturing it however needs a lot of investments in marketing. Countertrade has difficulties in consistency of specification and delivery, it is hard to set service and price quality and there is difficulty in going back to currency trading. Licensing offers limitations in participation, competition from licensees, needs fact finding, investigation and planning and there is a chance for loosing returns on investment. Joint ventures present difficult in gaining full control of business, different in views of partners and disagreements on third party markets to invest in. To overcome key barriers to entering international markets businesses need to consider the macro and micro factors that might have an impact on the business and design plans to mitigate risks and adhere to all the set requirements.

References

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