Navigating Global Horizons

Introduction

Globalization in business perspective has been a key interest in most business entities in recent past. While there might be no particular definition of the term internationalizing, the economic aspect of it defines it as a process unto which a business becomes more involved in the global market. Businesses like SASOL Limited that have ventured into international markets have undergone various advancement to fit and maintain into the global environment. Hence, the focus of this paper is to analyze and explain the structure, culture and governance of it by use of McKinsey’s 7S Model, an evaluation of the ethical and sustainable factors that the company has to consider in the global market. In addition, by applying the Hofstede’s Dimension of culture, the part critically evaluate the influence of globalization in the international organization, evaluate different methods of decision-making to function effectively in a global context. Finally, the paper will critique strategies for internationalization of a company may adopt and offer recommendation. . If you require business dissertation help, considering all these aspects will be vital for a deep understanding of the subject matter.

Structure, Culture and Governance of SASOL Limited using McKinsey’s 7S Model

The McKinsey’s 7S Model framework is meant to assess an organization’s design by using the seven internal features, which are; systems, style, skills, structure, strategy, shared values, and staff so that it can be identified if these features are in alignment with and facilitate the company to achieve its objectives. Singh (2013) studies that the tool was first founded by McKinsey consultants who were Julien Phillips, Tom Peters and Robert Waterman and assisted by Anthony G. Athos and Richard Pascale back in the 1980s. Its intention was to address the human resources as a source of organizational performance by aligning the seven elements to attain an effective organization operation identifies Ravanfar (2015). The model can well describe SASOL Limited, a high developing organization in South Africa, which is commercializing its operations at a global scale by venturing into economies such as Gabon, Mozambique, Canada and Australia. The model is illustrated below;

SASOL Limited uses the model when it is undergoing vacillation concerning the organization culture, structure and governance to certain functions. Among the seven elements, structure, strategy and governance are referred to as the Hard S while the Soft S are the skills, shared values and staff. The focus is on the structure, governance and culture of SASOL Limited.

Structure

It refers to the organizational framework and accessibility of various units of the organization in promotion of correct accountability (Ravanfar, 2015). The South African based organization offers businesses in different regions across the globe, thus to determine the framework of these varying regions, two checklist are considered; on the basis of skills and the other on expertise. The structure is illustrated below:

Governance (Strategy)

It is a hard element, identified by the management team of the company, whereby it has formulated into different forms of strategies so as to expand the organization into more foreign economies so as to heighten their command and global market (Ravanfar, 2015). The structure of governance is divided into minimal sections and finalized on different functions. These functions include marketing, Information technology, operations, marketing and several others. The governance structures considered pivotal to delivering sustainable growth in the interest of all the stakeholders. The governance framework is illustrated below:

Culture

The element that depicts the culture of an organization is the shared values. It is a soft element, quite minimal and it influential in a company according to (Ravanfar, 2015). The element is vital for the success of an organization like SASOL Limited, where business ethics are rooted into all its functions. It is based on the general corporate culture, in which all the staff must undergo training to fit into the culture of the company. According to Singh (2013), the code of ethics of the organization is the underlying values of ‘client focus’, ‘winning with people’, ‘safety’, ‘excellence in all we do’ as well as ‘continuous improvement’. All these must fit the integrity and ethical principles or conducts that aim ant making sure there exist morally justifiable behavior within its operations.

Evaluation of Ethical and Sustainable factors that the organization has to consider in a Global Market.

According to SASOL Limited sustainable report of (2018), the company engages actively with a collaborative approach on ethical and sustainability issues in a number of ways;

1. The company gets involved in developing and putting into action the international chemical industry responsible care initiatives, as well as taking part in working teams of the South African Chemical and Allied Industries Association (CAIA), American Chemistry Council (ACC) and the European Chemical Industry Council (ECIC). The intention is to drive a sustainable air quality, comply with environmental regulations and respond to climate change and energy security challenges.

2. The company also retains its focus on unceasingly fostering performance in line with achieving Responsible Care management practices. The practice is in line with human capital that is effective and critical implementation and delivering of SASOL Limited’s strategy. It intention is to promote diversity and cultural transformation, captivating, growing and maintaining high-effective and performing staff. It also achieve responsible care management practice by engaging all staff and appreciating individual human rights by operating in a safe, reliable as well as sustainable facilities as well achieve the development objective of the organization,

Hofstede’s Dimension of Culture on the Influences of Globalization on SASOL Limited

Psychologist Geert Hofstede (2010) was the first person to undertake a research on the national cultural differences, and underlie cross-cultural administration at the prominence of global businesses. He developed the research while working in an international organization IBM station in Europe, where he applied scores of surveys of staff in the organization across the world. The study by Hofstede (2010) was employed on other groups of individuals such as civil servants, students and pilots, and a four dimension framework was developed. It entailed Power distance, that could be low or high, Uncertainty avoidance, also low or high, masculine versus feminine orientation, long-term versus short-term orientation and individual versus group orientation.

Power Distance

Zoogah et al.(2015), ide notifies that it refers to the level of acceptance by the society of the unequal distribution of power. SASOL Limited There is low level of power distance, whereby the superiors and subordinates regard one another as equal in power leading to a more cooperative and relieved working surrounding. It is a trait common in most of international organization such as Apple Inc and Alibaba Corporation.

Uncertainty avoidance

It depicts the extent to which individuals feel threatened cryptic circumstances (Hofstede, 2010). SASOL being a South African based organization has a low level of uncertainty avoidance, where the culture is less formal and highly directional acclimatized. There is increased level of freedom offered to the staff in job mobility and decision making, a culture so common in most developed and developing countries (Saini and Matinise, 2013).

Individualism versus Collectivism

Individualism culture is manifested among most capitalistic countries such as United States of America, Europe and South Africa compared to collectivism culture. SASOL Limited business culture is that of individualism, whereby, employees portray the linked generic tendencies of taking care of themselves first and nuclear families and ignore the needs of the communities they dwell in ascertain Saini and Matinis (2013). It is a culture that champions individual achievement and initiatives, where there exist no tight social systems, emotional dependence and group beliefs in making decisions.

Masculinity versus Femininity

Masculinity refers to the intensity of ancient masculine values such as lack of concern for others, materialism and assertiveness. On the other hand, femininity is the general concern for relationships, concerns for others and general quality of life (Hofstede (2010). The latter is common in SASOL Limited and several other capitalistic and democratic nations and organizations. Over time, Antony (2012) affirms that there has been a slow increase of women in managerial position, but limited by considerable extreme levels of job stress.

Long term versus Short-term

It attributes to the period put forth to determine the strategic decision created by management. SASOL Limited depends highly on short-term profits and interests so as to meet immediate demands of stakeholders. However, Zoogah et al (2015) on modern international business identifies that when venturing into other markets, the company also employs long-term profits and interests as patient and sacrifices are required so that there is development for the future with research, investment, market share, lasting connections with partners and clients and development.

Evaluate different ways decision-making can work effectively in a global context

In the current world, Bayne and Woolcock (2011), depict that change is taking place at a faster rate compared to the past. The economic principles have not changed though, but the dynamics of evaluating have adjusted. For example, nations do not possess the extent of autonomy they possess in the past. The countries in Europe once modified their basic policies so that they can admit to the European community, and currently Britain is reviewing its domestic policies to exit from the same community.

Therefore, according to Azuayi (2016), for globalization of a company, it has to comprehend and accept that change is unpredictable, may in be international or domestic. Therefore, when making decisions, past considerations could be detrimental to the company, similarly to external conditions that had no effect on organization, have effect on organization currently. Thus it is vital for a company to familiarize with external factors and adjustments including changes in stage, national and global policies as well as economic trends.

For an effective decision making, Parnell et al. (2011), it is also vital for an organization to comprehend which variables that are likely influence performance. It involves determining the connection between major organization ratios and macro-economic variable over time.

Strategies for Internationalization an Organization may adopt and Recommendation

Some of the strategies that an organization may adopt top internationalize its business are global strategy, transnational strategy and multi-domestic strategy. According to Cuervo‐Cazurra (2011), the commonly applied is the global strategy, in which a company sacrifices impartiality to local needs within each of its markets in approval of accentuating efficiency. It emphasizes on the need to attain economies of scales by providing basically similar services or products in every market. The adversity of this strategy is that organization(s) does not diversify its products or service, making it monotonous to its clients.

Recommendation

As mentioned earlier that the world is changing in a drastic manner in decision making, similarly to the products offered due to influence of technology and technological advancements studies Govindarajan and Ramamurti (2011). Therefore, it is vital for an organization to advance the production of its products and services so as to include variety in the international market.

Conclusion

McKinsey’s 7S Model framework is applied in the assessment of a company’s design by using the seven internal features, which are; systems, style, skills, structure, strategy, shared values, and staff. In regard to SASOL Limited’s culture, governance and structure, governance is divided into minimal sections and finalized on different functions, ethics are deeply integrated into the governance structure and its structure is developed on the basis of skills and expertise. Ethical and sustainable factors that SASOL Limited has engage into are collaborating with other international organization in responsible care initiatives and unceasingly fostering performance in line with achieving Responsible Care management practices. By applying the Hofstede’s Dimension of culture SASOL Limited depict a lower power distance, uncertainty avoidance, an individualistic, feministic culture and a short and long term strategies in decision making to thrive in global markets. In strategic decision making, organization must be aware of current trends of businesses, with more external factors affecting businesses and most importantly determinants that connect between major organization ratios and macro-economic variable over time. Finally, global strategy is the most used strategy of globalizing business. The issue with it is that the product and services offered are not different, thus it is recommended to diversify the products and services now that there is technological advancement to meet the varying needs of a diverse global market.

References

Antony, S., 2012. Impact of culture on the application of quality management system (Doctoral dissertation, University of Johannesburg).

Azuayi, R., 2016. Internationalization Strategies for Global Companies: A Case Study of Arla Foods, Denmark. J. Account. Mark, 5.

Bayne, N. and Woolcock, S. eds., 2011. The new economic diplomacy: decision-making and negotiation in international economic relations. Ashgate Publishing, Ltd..

Cuervo‐Cazurra, A., 2011. Global strategy and global business environment: The direct and indirect influences of the home country on a firm's global strategy. Global Strategy Journal, 1(3‐4), pp.382-386.

Govindarajan, V. and Ramamurti, R., 2011. Reverse innovation, emerging markets, and global strategy. Global Strategy Journal, 1(3‐4), pp.191-205.

Hofstede, G., 2010. Geert hofstede. National cultural dimensions.

Parnell, J.A., Koseoglu, M. and Dent, E., 2012. Propensity for participative decision making (PPDM) in Turkey and the USA. International Journal of Business Excellence, 5(3).

Ravanfar, M.M., 2015. Analyzing Organizational Structure based on 7s model of McKinsey. Global Journal of Management And Business Research.

Saini, Y.K. and Matinise, S.V., 2013. An Exploratory study on factors influencing customer decision making: a case of fuel retailing industry. University of Witwatersrand, Johannesburg, South Africa.

Sasol Group of Companies Structure as at 31 may 2019.pdf

Sasol IR_Web Governance Framework.pdf. Sasol integrated Report. 2018

Singh, A., 2013. A study of role of McKinsey's 7S framework in achieving organizational excellence. Organization Development Journal, 31(3), p.39.

Zoogah, D.B., Peng, M.W. and Woldu, H., 2015. Institutions, resources, and organizational effectiveness in Africa. Academy of Management Perspectives, 29(1), pp.7-31.

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