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MNB3701
Assignment 4 Semester 2 2024
Unique Number: 222473
Due Date: 2 September 2024
SASOL'S OPERATIONS AND INSTITUTIONAL FRAMEWORKS IN MOZAMBIQUE: AN
ANALYTICAL REPORT
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY ..................................................................................... 9
2. LITERATURE SEARCH .................................................................................... 10
3. BACKGROUND.................................................................................................... 10
3.1. Historical Path to Becoming an MNE ............................................................. 10
3.2. Key Decisions and Role of Decision Makers .................................................. 11
3.3. Motivation for Expanding into Africa ............................................................... 11
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1. EXECUTIVE SUMMARY
This report analyzes the operations of Sasol, a multinational enterprise (MNE), in
Mozambique, focusing on the formal and informal institutional frameworks governing its
activities. The purpose of the report is to evaluate Sasol's presence in Mozambique's energy
sector through a comprehensive literature search, resource appraisal, and analysis of the
institutional frameworks. The objectives are to assess Sasol's contributions to
Mozambique's economy, understand the challenges of international trade and foreign direct
investment (FDI), and analyze the determinants of success for MNEs operating in
Mozambique.
Key findings reveal that Sasol has significantly contributed to Mozambique's economic and
industrial development, particularly through the development of natural gas fields and
infrastructure. The company has demonstrated a commitment to sustainable practices and
corporate social responsibility. The formal institutional frameworks in Mozambique, including
political, economic, and legal systems, have a profound impact on Sasol's operations.
Positive relationships with government officials, economic stability, and legal compliance are
critical for success. Informal institutional frameworks, such as culture, language, religion,
and ethics, also play a vital role in shaping Sasol's success. Cultural sensitivity, effective
communication, and adherence to local ethical standards are essential for operational
effectiveness.
The resource appraisal highlights Sasol's key resources and capabilities, including
advanced technology, natural resources, human capital, and strategic partnerships.
Continuous investment in research and development, supply chain optimization, and local
context understanding are crucial. The challenges of trading internationally include
understanding comparative advantages, investing in research and development, and
optimizing supply chain strategies. Sasol's FDI in Mozambique is justified by ownership,
location, and internalization advantages, aligning with the company's strategic goals and
navigating institutional constraints and enablers.
Sasol's operations in Mozambique have significantly benefited the country's economy and
industrial landscape. However, the company must continuously adapt to the formal and
informal institutional frameworks to sustain its success. Cultural assessments, strategic
partnerships, and continuous investment in local contexts are vital for maintaining a
competitive edge and achieving long-term goals. The report highlights the importance of
maintaining positive government relationships, monitoring market dynamics, and
considering alternative organizational forms to ensure continued success in Mozambique.
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