Advances in Strategy Development for the 21st Century |
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Page 9 of 11 We know that power follows property over the centuries through the reformation, enlightenment, rise of the middle class and into the 20th century.vAs governments allowed and populations demanded a greater distribution of property also distributed power. That distribution process accelerated toward the end of the 20th century as participation in the stock markets and investments in pension or superannuation funds began to extend to the wider population. In parallel, the demand for social and environmental responsibility of the corporation and its legal and fiscal transparency is accelerating. In this next 10-15 years, the corporation will exist for both the benefit of shareholders and society in far more equal measure – simply because the shareholders and society are increasingly one and the same. We know that the need for competitive advantage on a global stage is accelerating for every firm. In the Communist Manifesto, Marx described capitalism as a force that would dissolve all feudal, national and religious identities, giving rise to a universal civilization governed by market imperatives. Marx embraced this power for its ability to strip away the distorting effect race, nation, religion and politics can have on peoples’ ability to confront and change how the haves exploit the have-nots for self interest. Witness the changes in India (beyond the untouchables) and China (‘market Communism’). The people of South America, Eastern Europe and Africa are also on the move as capitalism becomes the preferred economic model. Countries that tried to develop domestically, independent of world trade, became basket case economies in the 20th Century. It is almost certain that businesses that try to remain domestic will enjoy the same fate early in the 21st Century. Financial institutions are increasingly global and trade agreements are opening new markets. The technology tools that cost too much and drove business crazy in the 20th century are coming into their own for productivity, information access and global trading over the next 10-15 years.[1] Sure you have to act local – but like your competition and your customers, you’ll be thinking, looking, sourcing, comparing and learning global. We know that economic globalization will bump against differing political boundaries in every geography in which a business operates. Strategies have to master the globalization of trade within an increasing localization of politics. It is simply not an adequate response to the current global environment to “retreat to what you know, or focus on the here and now, or make decisions that are as much influenced by panic as they are by understanding” and repeat the mistakes of history. Indeed, it is a sign of owner, leader and manager inadequacy. Whether you are a Melbourne coffee shop needing to respond to the global advance of Starbucks and a US Free Trade Agreement or the BHP trying to protect margins on sales to China through the acquisition of Rio Tinto in the face of Competition Policy and the FIRB, you are competing globally, but local adaptations will continue. We know addressing climate concerns will be a big contributor to competitive advantage in a growing number (if not all) of industries over the 10-15 years ahead.
[1]Friedman, T The World is Flat 2005 |
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