MNB3701
Assignment 4 Semester 2 2024
Unique #:222473
Due Date: 2 September 2024
Detailed solutions, explanations, workings
and references.
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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.
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