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Business environment refers to the combination of internal as well as external factor which affects operational activities of the organisation. Global business environment is considered as the place where two or more business organisation works together for mutual profit by exchanging goods and services with each other. Present assignment is based on SASOL limited, this company offers product related to energy and chemical. This report describes about Key factors that impacts over globalisation and other strategic complexities which affects operational activities of organisation at global level. It further explains about how operational activity of global market affects structure and culture of company. At last, it elaborates regarding influence of globalisation on decision-making process of organisation.
The interconnection of people,company,government and countries regarding to economical, social, technological, cultural and political factors around the world is the basis of globalization. This process helps in massive increase in trade and the technological exchange. The positive affects of globalization are higher in developing and developed countries as education technology and investment standard can be raised through this process. It also helps in gaining the economic boost to the different countries. There are also some negative impacts of globalization as the richest countries gets most of the profit like differentiation of tax policy in different countries.
The factors that drives the globalization are the economical factor which includes the data about market and economy of the business if the underdeveloped country not having the proper growth in the economy, then globalization helps is boosting a growth of company by taking benefit of technology, resources and transportation facilities etc. The developing country can get be of lower labour cost etc.
While the technological factors helps in exchanging the technology of one country to the another one, in the form of machinery, advanced equipment etc. The interaction between two country can also be increased by exchanging the data and information for the future research projects. Through the technological factors the speed and the efficient of work can also become effective and it also helps in
SASOL Limited is expanding its business at international level. For this, its manager have conducted PESTLE analysis. Pestle analysis is considered as the strategic tool which helps in evaluating macro environment of organization. All major components of macro environment are described as below:
Political: SASOL Limited is dealing with oil and gas in many countries. It can be said that if the company trade with those countries who are politically stable then it will minimize the risk of changes in governmental policies regarding oil and gas trade. It also includes wages legislation, taxation, product labeling etc.
Economic: Economic factors in macro environment includes inflation rate, interest rate, unemployment and competency's norms. All these elements affect the competitive advantage of organizations. In this regard, managers of SASOL, take use factor's like spending power of customers, growth rate of Oil & Gas industries etc. for forecasting its growth trajectory.
Social: It impacts on working culture of an organization. In this regard, attitude of customers and social beliefs play a major role in understanding the demand of marketplace. Therefore, it is necessary for managers of SASOL to design its business strategy as per societal laws and demographics.
Technological: It is considered as main factor which disrupts the whole working process of industries. Due to advancement of technology, it becomes essential for companies to replace old techniques with new one. This would help in winning high competitive advantage by fulfilling the demand of customers on time.
External environment of business has created a large impact on abilities of organizations including by which they can enhance their growth and profitability. It includes fluctuations in currency exchange rate, employment legislations, governmental laws etc. Therefore, some major strategic challenges in front of SASOL are:
Slow GDP rate: This factor creates various uncertainties such as less economical growth which directly impact on productivity and profitability of business. Therefore, SASOL Limited also faces issues in terms of risks and geographical change.
Cost: Finance is the most essential factor in a company which helps in conducting entire activities in proper manner. In this regard, the most crucial challenge in front of SASOL corporation is to introduce adequate amount of finance. To move business at global level, it is necessary for its managers to plan strategies to optimize available funds in adequate manner.
In order to overcome from strategic challenges, it is recommended to managers of SASOL, to make effective managerial decisions related to modification. They must carry out research to ensure that whether changes in organizational structure and implementation of digital technologies is beneficial for improving performance of business. In addition to this, present company also requires to make investment for welfare of societies. It will help in enhancing business image in societies as well.
SASOL Limited is expanding its business over global level. Through the whole process of globalization the company is required to update their current organizational structure, culture and governance in order to become successful in future. For this, top management of company is adopting various element of McKinsey 7s model. This model mainly reflects inter-dependency of Hard and Soft element and these elements are described as below:
The role of culture, structure and governance has played an important in the operation of the companies in the global market. It influences the work accountability and functioning at the domestic as well as global level. In context with Sasol Limited, it is important for the company to maintain and establish their company's structure and culture in order to increase productivity and efficiency at the global level. This can be best explain and solve with the help of six dimensions of Hofstede's theory of culture which explained as further:
Power distance index - In regards with Sasol Limited, company is using power distance index in order to judge any kind of inequality going in an organisation. This is implemented to avoid use of complex hierarchy of company structure.
Individualism versus collectivism - In context with Sasol Limited, company is following collectivism in an organisation to make management and structure of the company most effective and relevant for adopting the culture and governance in an organisation.
Masculinity versus femininity - Sasol Limited prefers femininity in place of masculinity to create good and effective relationship with supervisor and senior. It eliminates the gap between relationship of men and women in order to reduce any kind of biasses and unfair.
Uncertainty avoidance index - It shows how people are well cops with an anxiety. Sasol Limited can use this index technique in order to acknowledge any kind of anxiety and misunderstanding within an organisation and increase their morale to enhance global expansion of the company.
Pragmatic versus normative - Sasol Limited uses normative approach in which emphasis is used to give on values and rights and strong conviction of an employee. People generally focuses on WHY instead of WHAT is happening. It will enhance other to grow accordingly in the global market.
Indulgence versus restraint - In context with Sasol Limited, high indulgence persists optimistic character of an employee and provides freedom of speech to everyone to enhance their communication skills. This approach is focus on personal happiness of an employee to work in the global market.
Factors have affected decision making in a global context. There are various factors which are affecting decision making process of organisation at global level. There is a huge requirement that SASOL should highly focus on the social responsibility, cultural values and the
plans and policies which are followed by the public at the global scale. If SASOL have taken decision in order to expand their business operations in United Kingdom where the citizens are mainly focused on their roles and responsibilities related with their life events The firms have developed plans and strategies in order to achieve targeted customers in South Africa but there had to be changes implemented in the strategies so that firms can retain loyal customers who will enhance their overall sales and profitability ratios.
On the other side the society which is existing in United Kingdom is different from African nations so there can be possibilities that changes have to be made in the activities which are linked with corporate Social Responsibility. There are effective changes implemented in the decision making process which are connected with CSR activities which may result in SASOL Limited so they can easily perform all their business operations at global level with full efficiency and effectiveness.
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