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Globalization describes a process by which various national and regional economies gets interconnected with global network of trade, communication and transportation. It is way by which political, social and cultural relations across the countries gets interconnected. It also benefits the world economies as Foreign direct investment tends to increase and boost technological innovation and industrial restructuring. This project will discuss about the SASOL limited organisation which is a fast growing energy and chemical company in South Africa and expanded into Canada, Gabon and Australia and planning to expand in other countries soon. This report will discuss about the driving factors as well as impact of digital technology on globalisation. Pestle analysis of the organisation has been analysed to review the challenges of the globalisation and suggest recommendations to overcome those issues and challenges.
Covered in PPT
Explanation of the structure, culture and governance of the organization
There are various determiners which affect the operations and functions of business when expanding globally (Savrul, Incekara and Sener, 2014). Respective industry should properly concentrate on number of factors associated with globalisation. Such are described as under-
It defines the way or the process business operations are carried in respective industry,.There are various countries which have different structures and directly affects the performance of business firms (Ferraro and Briody, 2013). Structure adopted by respective industry is very complex and employees need to carefully understand. Hence, it is necessary for the SASOL ltd to adopt to the structure as per the business operations related to particular country. SASOL ltd has huge structures for producing chemical related products which is very essential for systematic handling of business operations.
Organizations must be able to understand the culture of the countries in which it is expanding such as the attitudes of people, beliefs and lifestyle. Culture of the company should be significant which can manage and integrate all the functions accordingly. Employees at SASOL have same attitude and beliefs towards the business.
It is the ruling authority in the company which manages and supervises all the work and has the power of decision making. They also have the capability to overcome the challenges when the SASOL ltd will expand internationally and increase the revenue for the firm (Wetherly, 2014). In respective company managers are responsible for the decision-making and have full control over the business.
- McKinsey’s 7S model illustrates the overall structure of organization.
In this model there are 7 areas of organization which are interrelated and create sustained competitive advantage.
These are the actions and plans made by SASOL to achieve competitive advantage. Industry should make a sound strategy which has strong mission, vision and values. SASOL makes long term strategy for their business which make give strong results and able to compete in the market.
In general it is the organizational chart in which business units are organized and includes the information of who is accountable to whom. Respective industry should not follow complex structure to confuse the employees and it disturbs the efficiency of task.
These are the procedures of the company which shows how business activities are executed in the industry. Respective industry chooses simple methods of treating chemicals which becomes easy for the employees which is also not hazardous.
These are the abilities of the employees to perform work in operations. SASOL should provide adequate training to the employees and makes them highly efficient in performing work.
It determines what type and how many employees are needed in respective organization and how they could be recruited, motivated and rewarded. At Sasol intelligent as well as well as risk taking employees are needed to perform work (Lee, Olson and Trimi, 2012).
It represents the management style of leaders in the company. Managers at Sasol uses participative decision-making process to make the employees feel that they are important part of the organization.
Shared values- At SASOL, managers uses ethical norms and standards which guides employees behavior towards the organization.
2. How structure, culture and governance are influenced by the global operations.
Structure, culture and governance are highly influenced by the global operations as these factors vary from country to country. It becomes difficult for the respective firm to manage the structure, culture accordingly when expanding internationally (Tokuoka, 2012). Different laws in different country makes the performance of the business work difficult.
Hofstede’s Dimensions of Culture which determines how organization has been influenced.
These factors determines the impact of culture on the society and on the values of the member of that society. Their is brief overview of six cultural dimensions-
- Power distance- It explains to each member in SASOL ltd. That power is distributed unequally in the industry, according to their position. This should be removed by distributing power equally and makes the employees motivated.
- Uncertainty avoidance- It describes to extent to which people in the society are not ease with ambiguity and uncertainty. Employees at SASOL Ltd should be prepared to face any contingencies when expanding globally and take appropriate measures to overcome challenges.
- Masculinity vs Femininity- It implies preference of society for assertiveness and heroism. On the other hand femininity represents for cooperation and modesty (Sanchez, Nardon and Steers, 2013). Respective industry should focus both the factors and avoid cultural differences to gain profit while going global.
- Individualism vs collectivism- Employees in the organisation wants to work alone and some of them likes to work in team. This creates conflicts among the employees at work place and influences the performance of organisation.
- Long term vs short term orientation- It describes the inclination of society to achieve long term profit as well some of the individuals need immediate profits or gains. In long term employees of the respective company focus on virtues and obligations as in short term people are less willing to compromise (Compact, 2014). These directly influence the working of SASOL LTD.
- Indulgence vs Restraint- Employees with high indulgence enjoys their life on their emotions whereas restraint employees are more concerned on their conduct and behaviour according to the social norms. These type of cultural differences affects the working of SASOL Ltd.
3. Evaluate the influences of ethical and sustainable globalisation on organisational functions.
For any organisation it is very difficult to expand globally, it has to integrate with regional, societal and economic structure. Their are different areas which affect the ethics and sustainability in different manner.
Health care facilities-
It is essential for the respective company as it deals in hazardous chemical industry which needs to maintain health and safety aspects while manufacturing process and using such procedures which will provide them high level of safety in performing work (Solomon and et.al., 2014).
Recruitment and selection-
Respective business can run smoothly with the help of talented and skilled employees which can bring innovation in performing work in a better way and can accept the challenges of expanding the business globally.
Customer play an important role in success or failure of industries. It is the responsibility of the business to provide products and services in such a manner that satisfies customer for long term relationship in the global market.
4. Influence of globalization on organisational decision making and strategy
Ethical and sustainable factors have affected decision making in the global context in the following way-
- For carrying out the best activity or taking favourable decision in SASOL Ltd, manager of the company needs to address the whole problem which occurs regarding the attitudes and beliefs while expanding to other countries (Bharadwaj and et.al.,2013). They should properly provide right decision which helps in managing and maintaining regarding ethical factors.
- When the company is expanding globally it has to concern the sustainable factors such as resources, time and cost available for the respective industry for expanding and can meet the requirements of the country.
- Respective industry has to make sure that the business operations conducted doesn't pollute the environment and the society. They have to take decision according to the country in which they are expanding and maintain proper ethical and behavioural norms.
5. Assess which strategic expansion routes the organization took and analyses both advantages and disadvantages.
There are various strategic expansion routes which the respective organization can take but the SASOL ltd has expanded its route by-
- Expansion through internationalization- SASOL ltd is expanding its route through expanding of its business in Australia and Canada and in various other countries to meet the requirements of the country and earn profit as well as enhance market image.
- It offers access to the new markets and this international expansion provides a chance to conquer new markets and reach more of the consumers, thereby increasing sales (,Daim and et.al., 2012).
- Another benefit of going global is the opportunity to access new talent pools which offers SASOL a unique advantage of increased productivity with their new ideas and thoughts.
- Respective company choose international expansion to gain competitive advantage over the opponents and helps to build strong brand awareness with the consumers.
- It also provides additional investment opportunities that foreign markets offer and helps to develop new resources.
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- There is monitoring currency fluctuations as compared to the home country and makes difficult for the respective industry to estimate or measure profits accordingly.
- Prevailing political situation in the country as well as conducting market research of the foreign countries makes it difficult for the respective industry to invest lot of time and money for expanding globally (Ardichvili and et.al., 2012).
From the above report it has been concluded that expanding the business globally is directly linked with various factors which affects its operations. Globalisation creates a huge impact on the business operations which are available in market such as internal and external environment. Structure, culture and governance creates a huge impact on business to expand internationally. This requires the respective industry to focus on these sustainable factors which help in proper growth and development which helps the company to earn huge revenue and enhance market image.
- Ferraro, G.P. and Briody, E.K., 2013.The cultural dimension of global business. Upper Saddle River: Pearson.
- Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a globalizing business environment. Procedia-Social and Behavioral Sciences. 150. pp.35-45.
- Wetherly, P., 2014.The business environment: themes and issues in a globalizing world. Oxford University Press.
- Lee, S.M., Olson, D.L. and Trimi, S., 2012. Co-innovation: convergenomics, collaboration, and co-creation for organizational values. Management Decision. 50(5). pp.817-831.
- Tokuoka, K., 2012. Does the Business Environment Affect Corporate Investment in India? (No. 12-70). International Monetary Fund.
- Compact, U.G., 2014. Overview of the UN Global Compact.
- Solomon, M.R and et.al., 2014. Consumer behavior: Buying, having, and being (Vol. 10). London: Pearson.
- Bharadwaj, A., et.al., 2013. Digital business strategy: toward a next generation of insights.