Globalization Impact on SASOL Limited

Assignment Part 1

Introduction

This presentation shall state about the impact of globalization on SASOL Limited.

Concept of Globalization

Globalization has become a vital issue for the expansion of business organizations. It has also created an impact on the fast-growing chemical and energy company in South Africa, which is known as SASOL Limited. With the support of globalization, this organization has got the opportunity to expand its business to different locations such as Canada, Mozambique, Australia, and Gabon (Eriksen, 2018). It is also trying to expand more to many other countries as well. Globalization has changed the perception of the businesses with its advantageous and innovative ideas, which has also prompted many students in place to seek business dissertation help to understand all these dynamics better. Therefore, this new prospect has opened a broader area for marketing in the global market.

Driving Factors of Globalization

Globalization in financial markets and products are responsible for influencing economic integration. This has also impacted the economies of scale of the SASOL Limited Organization. Besides this, globalization has also influenced investment and trade factors by expanding the scope of earning foreign currency. The technological advancement has also been influenced by the effects of globalization (Chen, 2017). This has increased the use of technology for the increase in productivity. The factors of globalization manage the costing matters in addition to the market environment. Globalization has also expanded the competitiveness, and this has helped the organization, SASOL Limited to know their opportunities in growing their business.

PESTLE Analysis

PESTLE analysis is a tool through which the organization’s macro environment will be considered with the help of which their performance will be known. The company faces political issues related to trade regulations and tariffs. Along with this, it also has to tackle the political stability prevailing in the global market. In the case of the economic factor, the organization has to face problematic labor costs and exchange rates. The rate of inflation and unemployment is also impacting the company (Pookboonmee, Tongcumpou and Phasukarratchai, 2018). On the other hand, the demographics and the cultural differences are acting as the social factors for the company, SASOL Limited. The impact of cost structure and value chain affects the company in the form of technological factors. The legal factors have to be tackled with the assistance of copyright laws and consumer protection laws. The waste management and the impact of pollutions are stated under the environmental problems.

The complexity of Strategic Challenges of Globalization among the Organizations

It has been noticed that the organizations are facing influencing challenges, which, in turn, is impacting the expansion of the organizations. Due to the impact of ethical business practices, product safety, labor, corruption and compliance are being influenced. For example, Nike has been influenced by the reports of the business terms (Pucciarelli and Kaplan, 2016). The organizational structure is also another issue that has been influencing the organization’s expansion in the international market. This is increasing the rate of investments and operational costs. Technological issues were also prevailing in the business and this has impacted the communication facilities as well as the distribution of the information.

The Opportunities and Challenges Faced by SASOL Limited

Various challenges and opportunities are observed that has created an impact on the company like SASOL Limited. This organization has become capable of creating a stable cash flow statement for free, which in turn, has helped them to invest in their new technologies. They have also got the opportunities to decrease their cost of transportation, and the introduction of the new taxation policy shall also influence the profitability of the organization, SASOL Limited (Hari, Yaakob and Binitha, 2015). However, the risk factors were preventing the organization from gaining global recognition. Some of these are related to the increase in intense competition. Along with this, the liability laws in different countries were also leading in different marketplaces. The sudden currency fluctuation is also observed, which has been increasing the political situation over the market.

Recommendations

It can be recommended that SASOL Limited shall consider the weaknesses of the other companies so that they can perform well in this competition run in the global market. It shall also try to work as per the varying laws in different countries (Grudin, 2017). Effective technological measures are also needed to be taken for controlling the supply chain flow.

Conclusion

Therefore, this presentation mentions various issues of the macro environment in SASOL Limited. The influence of economic integration, competitions, etc. is also considered with recommendations.

Assignment Part 2

Introduction

The report will provide its stress on the company, SASOL Limited, and the impact of globalization on its business. Besides, it also operates the influences of the global market. The organizational culture and structure will also be understood through the help of models. Globalization also influences the decision-making process of the company and this can be known from the discussion below. Sustainable and ethical factors will also be presented, which help know the global market. Some innovative strategies for internationalization and the process of overcoming the barriers of decision making and organizational structure will also be considered.

Tasks

Profile of SASOL Limited

SASOL Limited is one of the most renowned chemical and integrated energy companies, which has to headquarter in Sandton, South Africa. This company is known for producing chemical and oil products. Along with this, it is also observed delivering innovative products like greases, fuels, gases, automatic lubricants, polymers, and cleansers. It has been known that SASOL delivers its products to different locations all over the world. This has been possible for the company due to the advancement of globalization (Sasol, 2019). This company falls under the basic and diversified chemicals industry. At this moment, they are having 31,429 employees working for the company. Their vision is to deliver superior importance to its customers by becoming the leading energy and chemical company in the global market. SASOL wants to provide its services with the support of talented people and selective technological measures within its organization. The company also measures the ownership and accountability factors.

The Structure, Culture, and Governance of the Organization

Sasol Limited uses the McKinsey 7S model for understanding the culture, governance, and structure within the organization. Through the help of this model, Sasol has been capable of knowing the innovative strategy that can be used for bringing success on behalf of the organization. The structure of the company is also considered and this, in turn, helps in knowing the faults that Sasol is having. The skills of the employees working within the organization are also focused. From this, the cultural differences between the workers are also understood. It can be stated that with the drawbacks within the organization can be understood through this (TheONE, 2019). The working capability of the staff members also falls under this model and this, in turn, helps in expanding the scopes for them where they can showcase their abilities. The shared values are also measured and used as per the organization’s needs. It can be mentioned that Sasol Limited Company has known that there was a conflicting issue due to the cultural differences, and they also state that the staff members were not capable of showing their talents, which affected the structure of the company.

Ethical and Sustainable Factors in Global Market

Some of the sustainable and ethical factors are observed, which are impacting different organizations in the global market. Sasol needs to know such factors so that they can work according to that. It has been noticed that the regulatory and environmental considerations are focused as this is changing the perception of the organizations. Sasol Limited should try to use innovative measures for controlling the standards of the regulations that are prevailing in different business markets. The fundamental responsibility of the company is to provide byproducts that are efficacious for focusing on the profit margins. Sasol is also responsible for managing the cultural and social impacts (Ozdamar Ertekin and Atik, 2015). They need to understand the social norms and cultural factors that are needed to be followed while delivering their services to different countries. For reducing the impact of sustainable factors, the company is told to recognize the operational risk and the dependence that they have. The financial risks are also observed that are responsible for increasing the price of the products. Due to such factors, Toyota was influenced, and this has also expanded its operational risks. For this reason, Sasol Limited needs to use measures to overcome such issues.

The Influences of Globalization on the International Organization

Globalization has been influencing the international organization like Sasol Limited. Through the help of the Hofstede’s Dimensions of Culture, the different proportions that are impacting the organization can be known. The power distance is used for understanding the power of the members, and this also makes the company realizes the process by which the distribution of power will be possible within the organization (SketchBubble.Com, 2019). On the other hand, uncertainty avoidance is also stated among the dimensions where the people’s perception will be known, and it will be judged under the context of uncertainty and ambiguity. The individualism and collectivism are used for knowing the preferences of the people. It is also useful for managing the closely knitted network through which services are delivered.

The femininity and masculinity are also noticed which in turn is depended on the rewards and achievement. Through the help of femininity, the cooperation and the quality of life are measured which in turn helps in gathering knowledge about the cultural differences that the company is having. Sasol Limited also focuses on the short term and long-term orientation from which the society’s demand can be understood (Mazanec et al., 2015). Therefore, the company will be able to understand the cultural norms that are present in the global market so that they can try to work by following those so that in that manner, they can meet the needs of the customers. It also helps in knowing the needs for recognizing the risks and using the negative issues related to economic growth.

Effectiveness of Decision-Making in the Global Context

Decision making can effectively bring innovation in the global context. However, there is a need for recognizing the problems because of which the change has occurred. On the other hand, the alternatives are also used after knowing the issues. Information is gathered together to recognize the problem and the reason behind such an occurrence. The information gathered will help manage the external and internal works. While setting the alternatives, the effective ones are stated through which; the Sasol Limited Company can gain achievement and success (de Vente et al., 2016). Thus, desirable alternatives will be used for this reason. After this, the most innovative and successful one will be chosen with which the company will gain improvement in the global market.

Strategies for Internationalization

Different strategies are to be used for the aim of internationalization. It has been noticed that market entry strategies are used for making it easier for organizations to perform well in the global market. It is also responsible for many other strategies that are related to tariff rates, transportation, an adaptability level of the product, and the costs for marketing. Sasol Limited need to use the global strategy as through this; the company will be able to understand the efficiency and the services and products delivered in the different market situation. Their economies of scale are also impacted due to the use of the services and products within the market. For example, Microsoft uses its various software programs through which they have been successful in managing the customers' goods and productivity. This will also be efficacious in producing innovative end products for the customers (Zolfaghari, Sabran and Zolfaghari, 2009). Through the use of global strategy, the growth potentiality of the services and products delivered by Sasol Limited is also considered. Transactional strategy can also be used in this case for knowing the demands of the local people. Thus, through these strategies, the company will be successful in managing the competitiveness within the global market.

Managing the Organizational Structure and Decision-Making Processes

It can be stated that for overcoming the barriers within the international markets, the company Sasol Limited needs to use some strategies. These strategies should also be used for managing the organizational structure and the process of decision making. It can be recommended that the company should try to harness the local market expertise. Through this, they will be capable of managing the cultural issues prevailing within the organizational structure. Besides, this will also impact the decision-making processes for its betterment (Steiss, 2019). The need to have partnerships are also required to understand the market scenario where they are going to deliver their services. The new legislation is also used for working on the varying laws and regulations prevailing in the market. In this way, the structure of the organization and the decision-making processes will be carried forward.

Conclusion

It also uses the Mckinsey’s 7S model for understanding the condition of the company. Apart from this, the sustainable and ethical factors that are needed to be followed as stated for the betterment of the organization. With the help of Hofstede’s Dimensions, globalization’s impact on Sasol’s growth can be measured. Strategies are also stated, which are responsible for managing the decision-making process and organizational structure.

References

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Eriksen, T.H., 2018. Globalization. In Handbook of Political Anthropology. Edward Elgar Publishing.

Grudin, J., 2017. Obstacles to participatory design in large product development organizations. In Participatory Design (pp. 99-119). CRC Press.

Hari, T.K., Yaakob, Z. and Binitha, N.N., 2015. Aviation biofuel from renewable resources: routes, opportunities and challenges. Renewable and Sustainable Energy Reviews, 42, pp.1234-1244.

Mazanec, J.A., Crotts, J.C., Gursoy, D. and Lu, L., 2015. Homogeneity versus heterogeneity of cultural values: An item-response theoretical approach applying Hofstede's cultural dimensions in a single nation. Tourism Management, 48, pp.299-304.

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Pookboonmee, P., Tongcumpou, C. and Phasukarratchai, N., 2018. Application of Surfactant Aqueous-based Solution for Oil and Phorbol Esters Extraction from Jatropha curcas L. Seed-Kernel in One Step. CHIANG MAI JOURNAL OF SCIENCE, 45(7), pp.2757-2767.

Pucciarelli, F. and Kaplan, A., 2016. Competition and strategy in higher education: Managing complexity and uncertainty. Business Horizons, 59(3), pp.311-320.

Steiss, A.W., 2019. Strategic management for public and nonprofit organizations. Routledge.

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