Analysis and Evaluation of an Organisation for

Globalisation
Introduction
For globalization of business, any business organization can now enter the global business
environment much more easily than before. But it is very difficult for an organization to manage
the business on a global scale because of the intensity of the competition in the global market
(Ball, 2016). To expand and manage business globally, an organization need to follow many
steps. In this report, the way to expand and manage business globally has been discussed. By
reading this report an individual will learn how to apply McKinsey’s 7S model and Hofstede’s
Dimensions of Culture in a business context. A reader will also learn about the ethical and
sustainable factors and their influence on organizations decision making. An individual will also
learn about expansion routes and its advantage and disadvantages.
LO3
Structure, culture and governance of the Sasol Ltd
Structure: The structure of an organization is also referred to as the pattern of the organization.
An organizational structure defines the hierarchical position of the organization, who reports to
whom, how information is flowing etc (Baligh, 2017). Sasol Ltd is an energy and chemical
company whose organizational structure is developed into two upstream business units. The
company also have three regional operating hubs and four customer-facing strategic business
units.

Culture: The culture refers to shared values, norms, the personality that an organization cherish.
Sasol Ltd has its own culture. People working in the company is very supportive which improve
the quality of the organization's corporate culture.

Governance: Governance refers to how a company make its decisions, perform its activities, and
operate its business. Sasol Ltd governs its business by proper observation and discussion. The
company acquired many functional teams which facilitate swiftly operate the business.

Mckinsey 7s Framework of Sasol Limited

Sasol Ltd is a successful company which is situated in South Africa. The company operate its
business on a global scale which the company handled successfully. The company is constantly
growing its business by entering the foreign market. That’s why various factors of globalization
influence the organization's culture, governance, structure, leadership etc. So, to assess the
impact of globalization on Sasol Ltd, the company uses Mckinsey 7s Framework. This tool helps
a company to evaluate the performance of the organization. 7 factors of Mckinsey are strategy,
structure, systems, shared values, skills, style, staff (Egner, 2017). Among these factors strategy,
structure, systems are identified as hard element and shared values, skills, style, staff are
identified as a soft element.
Applying Mckinsey 7s Framework on Sasol Ltd

How Sasol Ltd apply Mckinsey 7s Framework to evaluate the company's performance has been
given below:

Strategy: Strategy is a plan that helps a company like Sasol Ltd to attain its desired goal. An
effective strategy helps an organization to gain a competitive advantage in the global market. To
develop a strategy Sasol Ltd first, need to define its objectives which will help the organization
to direct its activities in a certain way. Secondly, the strategy also considers the activities of the
company’s competitors. Sasol Ltd also considers the changing nature of the customer demand
whenever they make a strategy.

Structure: Structure refers to the pattern of the organization or how organizational structure
defines how information flow, who report whom, and integration of task. Sasol Ltd set the
organizational hierarchy in such a way that will help the organization to manage activities
efficiently. Sasol Ltd evaluates coordination between the different functional department of the
organization. The company also assesses the proper man agent of teamwork and communication
between different levels of employee.

Systems: Systems refers to how an organization perform its activities, make a decision, and do
other work. By assessing systems, Sasol Ltd evaluates the company's managing process, work
environment, organization alignment etc.

Shared values: Sasol Ltd implement core values, creativity, quality services to ensure the shared
values of the organization. The company tries to find what’s their mission and vision. The
company also tries to gives its efforts to create a good corporate culture. Sasol Ltd tries to
maintain a diverse work environment. All these things are done to maintain high ethical and
moral standards.

Style: Style refers to how a company lead its manpower, how they behave and interact with the
employees, how it makes decisions etc. Sasol Ltd applies Mckinsey 7s Framework to determine
the best leadership style for the organization. To do that, the company evaluate different
leadership style, its effectiveness, performance etc.

Staff: Staff is the most valuable assets that a company can ever have. By using the Mckinsey
framework, Sasol Ltd can find answers like what’s the number of staff members, what is the
requirement for doing work in the company, what steps are taken to develop manpower etc.

Skills: By implementing the Mckinsey framework, Sasol Ltd can get answers about what types
of skill an employee needs and are enough skilful employees in the organization. This will also
answer how to develop skills among employees.

McKinsey 7S Model Checklist

Some checklist questions are given below to analyse the current state of Sasol Ltd:

Strategy

 What are the objectives of Sasol Ltd?

 How Sasol Ltd use its resources to attain its desired purposes?
 What’s the plan to attain a competitive advantage?

ANSWER: The business goal of Sasol Ltd are well defined. As the company knows what to
achieve, it helps Sasol Ltd direct its business on the right track. Also, the company developed a
business strategy in such a way that it helped the company to allocate its resources in the right
place which will facilitate the company to attain its desired goal. Sasol Ltd has to face intense
competition from its competitors like BASF, SABIC, DowDuPont. To tackle keep the existence
in the market and gain competitive advantage, Sasol Ltd has taken initiatives. The company have
decided to reduce its product price.

Structure:

 What is the organizational structure of Sasol Ltd?

  Is the decision making of Sasol Ltd is centralized or decentralized?
 Is there good relation between a different functional team of Sasol ltd?

ANSWER: The organizational structure of Sasol Ltd is developed into two upstream business
units. The company also have three regional operating hubs and four customer-facing strategic
business units. Sasol Ltd maintains a hybrid decision-making structure which is between
centralization and decentralization. There is a good relationship between different functional
department of the organization. This department sometimes works together to attain certain
tasks.

Systems:

 How business operation is managed?

 How does Sasol Ltd monitor and evaluate control?
 What are the processes for organizational alignment?

ANSWER: Sasol Ltd developed well-defined systems which ensure efficiency in business
operation. Sasol Ltd evaluates and monitors its system by observation and discussion. The
company maintain its internal process by designing specialized team, setting different tasks
which help to channel activities to ultimate success.

Core values:

 What is the mission and vision of Sasol Ltd?

 What are the core values of the company?
 How does the company maintain its brand image?

ANSWER: The main purpose of Sasol Ltd is to provide quality services to the customer and use
technologies in producing chemical and energy products to reduce the emission of carbon
dioxide. The vision statement of Sasol Ltd is to be a leading chemical and energy company in the
global market. The core values of Sasol are to maintain a supportive work environment, build
honesty, creativity, trust among employees. By maintaining core values, the company attain and
maintain its brand image.

Style:

 What is the leadership style of the company?

  Are the workers being cooperative and competitive?
 What types of teams are there in the Sasol company?

ANSWER: Sasol ltd maintains a participative leadership style where employees are allowed to
join in the decision making process. participative leadership style creates a supportive work
environment which increases cooperation and competition between employees. The company
also maintain various functional teams like finance, marketing, HRM, sales etc.

Staff:

 How many employees are working in the company?

 How the company fill the vacancy?

ANSWER: Sasol Ltd has a large number of employees which is placed in various areas as per
required. The company knows its capabilities and capacity very well. Whenever there arises any
vacant position, the company quickly responds to it to fill up the position. This process is
handled efficiently by developing and manging systematic process which identifies potential
vacancy.

Skills:

 Are there enough skilful employees?

 Is Sasol Ltd has taken action to develop its employee's skill?

ANSWER: Sasol Ltd acquires talented employees as the company has recruited employees with
high qualification. The company is well aware of developing the skill of its employees by
arranging various workshops, supervising them, on the job training etc.

Applying Hofstede’s Framework on Sasol Ltd

Hofstede's Framework is a tool used to identify differences between several countries which will
provide valuable information about those differences and facilitate the business organization to
manage global businesses. By implementing Hofstede’s Framework theory, Sasol Ltd can
evaluate the influence of globalization on business (Siedenburg, 2018). Hofstede's Framework
has been classified into 5 dimensions. This has been explained below:
Power Distance Index (PDI): It means that people of a country or society accept and expect
inequality. Or it can be said that power is distributed unequally which is expected by the people.
A high PDI score refers that people accept inequality and hierarchical distribution of power. And
low PDI score refers that power is spread equally and people do not accept inequality in society.
Sasol Ltd conducts its business in Canada, Australia, Mozambique, South Africa. The PDI score
of Canada and Australia is low. On the other hand, the PDI score of Mozambique, South Africa
is high. To operate the business successfully Salon Ltd must provide equal pay to employees
located in Canada and Australia as the people is strict about equal rights. To satisfy the people
located in Mozambique and South Africa, they have to pay and give other rights equally.

Individualism versus collectivism: People who prefer to think about themselves and take care
of themselves is called individualism. And people who think about and work with its relatives,
groups and look after them is called collectivism. A high individualism score means a less
interpersonal connection between people in the society. The individualism score of Canada,
Australia, and South Africa is high. On the other hand, the individualism score of Mozambique
low. People working in Canada, Australia, and South Africa under Salon Ltd can be motivated
by giving them promotion as they like to think about themselves where people working in
Mozambique are loyal and love to work in teams because people believe in collectivism.

Masculinity versus Femininity (MAS): In a masculine society, people prefer achievement,

success, the reward for success. In femininity society, people prefer caring for each other,
cooperation of work, modesty. The masculinity score of Canada, Australia, and South Africa is
high and the score is low in Mozambique. This means a country with high masculinity score
masculinity society and a low score refers to a feminine society. So, Sasol ltd will find it good to
operate the business in Canada, Australia, and South Africa because of the competitive nature of
the society.

Uncertainty Avoidance Index (UAI): This dimension explains how people in society manage
anxiety. Canada, Australia, and South Africa have low UAI score which indicates employees
working in Sasol under these countries have weak loyalty and the average duration of
employment is shorter. On the other side, Mozambique has a low score in UAI which indicates
employees working in Sasol in Mozambique have strong loyalty and the duration of employment
is long term.

Time orientation: There are two separate timelines different society prefer. Long term and short
term. People who prefer short term orientation have a certain goal and people who prefer short
term prefer completing some small tasks or objectives. Canada, Australia, and South Africa, and
Mozambique have a low score in long term orientation which means these courtiers are
normative and they respect their culture.

Indulgence: The indulgence rate of. Canada, Australia, and South Africa, and Mozambique are
high which means people of those countries are social, enjoy their lives, and have fun. For this
reason, employees working in Sasol under these countries is very social. Sasol ltd acquires a very
diverse work environment in these countries and they work together happily which create a good
corporate culture for Sasol Ltd.

Ethical and sustainable factors that the organisation has to consider in a global
market.
Influence of ethics on the organization

Sasol Ltd is an international business organization that operates its business in several countries.
While globalizing its business, the company is influenced in many ways for some ethics of
globalization which has been given below:

Sasol Ltd has to develop its core value in a way that will match the global policies and decision
making. Sasol Ltd has to attain and develop in a way that will fulfil international standards
(Faisst and Hichert, 2017). This activity will help the company to maintain business operation by
maintaining international standards. Sasol ltd has to deal with various ethics and rules of a
country while expanding business in the new market.

So, it is proven that the ethics of globalization significantly affect a business organization.

Influence of sustainable development on the organization

Sasol Ltd is influenced in many ways by the sustainable development of globalization which has
been described below:
 For sustainable development business organization like Sasol has grown its business in
different countries to strengthen its presence in the global market. Which increase
investment as the company has to invest money in many projects (Global Offshore
Investment and Business Guide, 2019).
 Sustainable development has affected the company’s HRM department. Sasol Ltd is
expanding its business in the new market. To conduct the business operation, the
company have to acquire skilful manpower to do the business operation.
 To acquire global customer Sasol ltd has to display various attractive promotional
activities.

So, it is concluded that sustainable development of globalization influence Sasol Ltd in

many ways.
LO4
How ethical factors have affected the decision-making process?
Ethical factors are greatly influencing the Sasol company’s decision-making process. Whenever
the company tries to expand its operation, it needs to maintain various ethical factors of the
global business environment. Sasol ltd needs to consider cultural values, laws, social
responsibilities whenever they enter the new country or market. For instance, Sasol Ltd tries to
enter in UK market where people have different ethics different from South Africa. In that state,
Sasol Ltd needs to form strategies in a different way that will help acquire a customer from the
UK market. The UK have different business laws that will affect Sasol Ltd to change its business
activities in certain ways. So, it's seen that differences in ethics forced a company to change its
business strategy and business activities.

Global business strategy

Sasol Ltd can operate its business globally in many ways. There 4 different strategies of global
business which can be used by the company to operate an international business successfully.
Those four strategies are export strategy, standardization strategy, multi-domestic strategy,
transnational strategy.

Export strategy: In export strategy, Sasol Ltd can operate the global business by exporting its
products in another country to fulfil the needs of the foreign customers. In this strategy, the
company can easily export its product without customizing it.
Standardization strategy: In standardization strategy, a business organization provide similar
products and services to all its customer or we can say a business organization treat its customer
equally (Landis Gabel, 2018). The product or services are not customized by the company in a
standardized strategy. Sasol Ltd can use this strategy by providing similar product and services
to all its market segment.

Multi domestic Strategy: In multi-domestic strategy, there are differences in product and
services in each country. This difference is caused by specific conditions of a certain area. Each
country has people with different needs. To fulfil that needs, an international business
organization customize its product in different ways and provide it in various market. Sasol Ltd
can use the multi-domestic strategy to operate its business in many parts of the world.

Transnational Strategy: A combination of multi-domestic and standardization strategy is called

transnational strategy. This strategy is suitable for handling competition (Das, 2017), Sasol ltd
can also use this strategy to expand its business in a new market and handle the competition as
well.

Recommendations for managing business globally

To successfully expand the business in the global market, Sasol Ltd needs to analyse the new
market. The company need to understand the environment of the place where it will conduct the
business operation. After analysing the new market, Sasol Ltd needs to develop a marketing plan
to acquire a customer from that particular region. While entering in new country or market, Sasol
Ltd needs to understand the culture and values of the local people. Also, to break language
barriers Sasol Ltd should hire expert employees who can easily build communication with local
peoples. Law order should be followed by Sasol Ltd to swiftly operate a business in the new
country.

Strategic expansion routes

Sasol Ltd can use various strategic routes like joint venture, licensing, ownership etc. These
strategic routes have been explained below:

Joint venture: When two or more business organizations join together and work cooperatively
to execute a particular task or other business activity then it is called a joint venture (Herzfeld
and Wilson, 2016). Sasol Ltd can use this route to expand its business globally. Sasol can team
up with a similar business organization and work together to attain its objectives.

ADVANTAGE

Risk is reduced as risk is shared with the business partners. Sasol can gain valuable skill and
knowledge from its partner. Sasol Ltd can get financial help from its partner at the time of
difficulties which is a great advantage of the joint venture. Sasol Ltd can gain significant market
share by joining up with other organizations as they work together to attain its desired objectives.

DISADVANTAGE

In the joint venture, the objectives of the team are often unclear. Also, the communication
between both business organization is not good and control and power are not distributed
equally. Flexibility in the joint venture is low.

Licensing: Licensing means allowing someone to use the company’s logo, design, name, and
other properties in return for fees (Poltorak and Lerner, 2018). Sasol Ltd can do that too. Salon
Ltd can allow people from other countries to use the company's intellectual properties which will
help the company to create a customer base and increase brand equity.

ADVANTAGE

A company like Sasol Ltd can develop a passive income source for the organization. It also
creates an opportunity for the organization to enter the new market and create business
opportunity as the company is getting recognition because of licensing intellectual properties to
other country people.

DISADVANTAGE

Licensing intellectual properties to others might harm the company's reputation as people might
misuse it which will decrease the brand value of the business organization.

Key barriers of expansion routes

Language Barrier: Whenever a company like Sasol Ltd enter the foreign market they have to
face language barriers. By not communicating properly make the company's ability limited. A
company like Sasol Ltd find it hard to acquire a customer because of not making proper
communication (Simpkin and Jones, 2020).
Registration and Compliance Difficulties: Company like Sasol Ltd has face complex business
laws and regulation whenever they enter the foreign market. Sometimes it’s hard to comply with
these regulations.

Staffing Problems: Another barrier that arises while operating a business in a foreign country is
staffing. It’s a challenging task for Sasol Ltd to find suitable employees in a new place because
the company lack enough networking.

Recommendation on dealing with strategic expansion routes barriers

To overcome language barriers, Sasol Ltd can hire native employees who will effective in
communicating with local people. The company can add native employees to the team which
will give greater insights into the local area and its people.

To tackle registration and compliance difficulties Sasol Ltd have to license its business
organization and hire a lawyer to help with various paper works of the organization to tackle any
difficulties in law.

To tackle the staffing problem, Sasol Ltd can place employees who are eligible for the
organization and place a strong team.
Conclusion
So, it is concluded that expanding and managing the business on a global scale is very difficult.
To make it happen, a business organization like Sasol Ltd have to consider many things. An
organization like Sasol Ltd can use Mckinsey 7s Framework to evaluate the performance of the
organization. To manage a global business, a company like Sasol Ltd can use Hofstede’s
Framework to evaluate the differences in each country which will provide valuable information
to the organization. A company like Sasol Ltd can implement various strategies like export
strategy, standardization strategy, multi-domestic strategy, and transnational strategy to take a
position in global business (John, Gillies and Cox, 2016). The global business organization can
use different strategic expansion routes like joint venture, licensing to facilitate business
globally.
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