Ethical and sustainable factors that the organization has to consider in a global

market
Impact of Ethical actors

SASOL Ltd conducts its business in numerous countries. These countries have their ethics which
affect the organization in many ways. A global business organization like SASOL Ltd has been
forced to change the management style and approaches because of difference in ethics in
different countries. SASOL Ltd has to deal with many things while operating business on a
global platform. There are certain rules and policies for operating business in a global platform
which is important for SASOL Ltd to follow. Some of the common ethical factors that SASOL
ltd might face is working standards, workplace diversity, environment, political situation etc.
SASOL Ltd has to comply with these ethical factors to operate the business in foreign countries.

Impacts of Sustainable Factors

Sustainable development has created the opportunity for the business organization to go
international. SASOL Ltd has gained enough opportunity to conduct global business for
sustainable development. Three aspects of sustainability are social, economic and environmental.
The development of these factors has changed today’s global business environment. SASOL
company can now have enough opportunity to gain customers thanks to sustainable
development.
LO4
How ethical factors have affected the decision-making process?
Whenever a company enter into a new region to conduct business, it has to consider the ethical
factors of that region. Ethical factors like core values, morals, behaviour, environment, diversity
etc. A global organization like SASOL Ltd must consider these factors whenever they take any
kind of decision about business activity in that particular region (Bouyssou et al., 2017). The
company must not take any kind of decisions that goes against the ethics of the general people.
For example, if any company tries to place a liquor store in South Arabia then the company will
be immediately sued because the countries laws don't permit anyone to do business with liquor.
So, it's seen that ethical factors greatly affect the decision-making process of an organization.

Global business strategy

To enter into the global business platform, a business organization can adopt many business
strategies. There is 4 global business strategy which is very effective to enter in global business.
Those strategies are domestic exporter strategy, standardization strategy, multi-domestic
Strategy, transnational strategy. SASOL Ltd can use any of these strategies to operate business
globally.

Domestic Exporter

By using this strategy, an organization can easily enter the global market. SASOL Ltd can just
simply produce its products and distribute them in several countries by using some distribution
channels. The most global business organization entered the global market by using the domestic
exporter strategy.

standardization strategy

By using a standardization strategy, SASOL company tries to provide all its consumer around
the world same or identical product. Or it can be said that there would be no customization of
product and services.
Multi domestic Strategy

SASOL Ltd can adapt this global business strategy as its very effective. In multi-domestic
Strategy, an organization customize its product and services to fulfil different peoples need. Or it
could be said that a business organization provide different product in a different region.

Transnational Strategy

SASOL Ltd can also use a transnational strategy to enter the global market. Transnational
strategy is a combination of both standardization strategy and multi-domestic Strategy (Reviews,
2016). This strategy is very effective to develop a new customer base and increase brand equity.

Recommendations for managing business globally

SASOL Ltd is conducting its business in many countries like Canada, Australia, South Africa,
Mozambique etc. The company faces many problems while operating business in those
countries. To properly manage the business in those countries, the company need to consider
many things. Whenever the country tries to expand its business in a new region or market, the
company needs to do proper research about the region, market, and people to understand the
business nature of the market (Kumar, 2016). SASOL Ltd may also face language barriers while
executing business strategy. To overcome that situation the best solution that the company can
pursue is recruiting local experts in the company who will facilitate the company to overcome
communication barriers.

Strategic expansion routes the organization took and its advantages and
disadvantages.
SASOL Ltd can choose any expansion routes from various strategic expansion routes. There are
numerous numbers of expansion routes which are ownership, joint venture, export marketing,
licensing etc. Some of these expansion routes have been described below:

Export marketing

SASOL Ltd can use this strategic route to expand its business. In export marketing, an
organization use a third party to deliver products to the final customers. It’s the easiest strategic
expansion route and also it's very effective.
ADVANTAGE

 It’s the simplest strategic expansion route which very easy to manage.
 To execute this strategy, an organization have to expand a comparatively small
amount of money.
 It creates many opportunities for the organization to grow the business.

DISADVANTAGE

 A major risk is involved while exporting goods with various transportation medium.
 Less information about the global market may be a problem as the global market
crash anytime.

Licensing

When an organization permit others to use the intellectual properties of the company like patents,
trademarks, copyrights, design in exchange for fees then that is called licensing. SASOL Ltd can
follow this expansion strategy to permit others to place business in a foreign country using the
company’s product, trademark, logo and design (Pain, 2019).

ADVANTAGE

 It's a quick way to enter the foreign market.

 The licensor can create passive income without investing money.
 Brand equity of the company is increasing as licensing helped an organization to
expand its business.

DISADVANTAGE

 The brand image of the organization can be destroyed if the licensee misuses the
intellectual property of the licensor.
 IP theft may occur.
Key barriers of expansion routes
SASOL Ltd is an energy and chemical which is currently taking measures to expand its business
through various expansion route strategies. While expanding business or entering a new region
for business, the company have to face many barriers. Some of the common barriers a global
business organization faces have been explained below:

Supply chain risks

To maintain the supply chain, global organization like SASO Ltd largely depend upon various
transportation systems, logistics and other parties. Because of geographical distance, it's hard for
a global organization to properly maintain a supply chain. Also, maintaining a supply chain in a
foreign country is costly and time lengthy too (United States Government Account Office, 2017).
If for any reason container ship full of the company's material delayed, then the company might
have to face a huge loss.

Risks with hiring staff

A global company like SASOL Ltd have to take intense pressure while placing business in a new
region and operating it. To handle this pressure the company, have to hire people in the
company. While hiring local people in the company, the company feel staffing risk as they don't
know the nature of the local employees as they didn't mat before. That's why the company cannot
trust them.

Language barriers

While conducting business in a foreign region, global organization like SASOL Ltd has to deal
with language barriers. This is the most common barriers that every global organization face. It
is frustrating for a business organization to not building communication with the people.

Recommendation on dealing with strategic expansion routes barriers

There are certain things that global organization like SASOL Ltd can do to overcome expansion
route barriers.

To avoid supply chain risk, the only possible way that a business organization can do is firm
planning. There is nothing an organization can do except developing a plan. Which will allow an
organization to maintain supply chain flow.
To avoid staffing risk, the first thing company like SASO can do is preparing the organizational
infrastructure to handle any kind of conflict situation. It is important especially for a global
organization. The second thing a company can do is placing a professional mentor who will
guide the employees the way that the organization want. The organization have to care for its
employees and compensate them properly to build good relation between workers and the
organization.

To overcome the language barrier, a company like SASOL can only do is adapt to the situation
as fast as possible and hiring local people as employees who will help the company by
developing communication with the local people.
Conclusion
So, it concluded that by moving to an international platform business organization can grow its
business successfully. But the risks that come with expanding business in a foreign market is a
concerning issue. While operating globally, a business organization might face various risks like
competition, the complexity of the global market, language barriers, complex rules and
regulations etc (Jarvis, 2018). So, it's seen that managing global business, not a simple task. To
properly enter and maintain global business operation an organization have to follow some
guidelines. An organization first need to decide the entry strategy that is suitable for the
organization. For more expansion of business in the global market, a business organization can
adopt various expansion route strategy.
Reference
Bouyssou, D. et al. (eds.) (2017) Decision-making process. London, UK: ISTE.

Jarvis, D. S. L. (ed.) (2018) International business risk: A handbook for the Asia-pacific

region. Cambridge, England: Cambridge University Press.

Kumar, V. (2016) Marketing Research: A Global Outlook. New Delhi, India: SAGE.

Pain, K. W. (2019) Licensing practice and procedure. 6th ed. London, England: Callow
Publishing.

Reviews, C. (2016) Global and Transnational Business, Strategy and Management. La

Vergne, TN: Cram101.

United States Government Account Office (2017) Supply chain risks: SEC’s plans to
determine if additional action is needed on climate-related disclosure have evolved.
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