Business strategy in global enterprises
- New technologies
The business environment has transformed drastically since the advent of new technology. Business organizations have undertaken extreme restructuring by modifying their means of communication and synchronization of work activities. New technology has made it promise for companies to work on a real-time basis, whereby products and services are conveyed to the right place at the right time.
Since then, information technology has propagated and has undergone significant improvements. Costs have sustained to decline as these new technologies have emerged. A business not supported by a network of computer systems (primary information technology) is more or less destined to fail, since it will be incapable to compete efficiently in today’s complex and dynamic environment.
Companies are not the only ones who have gained from advances in modern information technology. Consumers and interest groups have created strategic alliances and now capable to coordinate their activities as well as exchange ideas and thoughts through a number of database and network systems. For instance, owners of personal computers can subscribe to a computer network and without difficulty retrieve information on the products and corporations on line.
Such information can also without problems be transmitted to other users. This huge use of technology by both consumers and companies affects, but the way business is run today. These consumer strategic alliances know no geographical limitations; oftentimes, they are global in nature, particularly among the industrialized nations.
As companies can get in enormous profits from the better coordination, greater product elasticity, improved quality, leaner production, and more time-based competitiveness that information technology offers, they also facades the threat that can come from these consumers’ strategic alliances. For instance, corporations can no longer ignore consumer demands for constant product quality, reliability and respect for the environment, or timely delivery of services.
As we move toward more and more advanced technologies, the labor force must be retrained. This training must not only expose workers to the technical matters adjoining the new process but also to the new focus of the organization. They have to be made responsive of the importance of advanced technology in improving work methods and in remaining competitive. Employee compulsion to the new process is imperative.
Advanced technology by itself adds little or no value to an organization. There should be organizational as well as employee dedication to exploit the technology to the maximum. For instance, with ever-increasing use of computer-integrated manufacturing systems, and the stream of technical documentation that accompanies it, employees have to be skilled of recognizing the critical information at the right time.
Once that information is recognized and properly interpreted, there must be an organizational dedication to use the information to make better decisions. Without this potential, the organization cannot take advantage from new technologies. Human resources’ management, therefore, will persist to be a critical factor in the survival of any organization. We sum up the influence of information technology on human resources as follows:
- Information technology transforms the mode of communication and work processes.
- Custom or standardized operations are replaced with skilled and multi-skilled workers. An extremely trained labor force is desired to manage information technology.
- Worker motivation and satisfaction might improve since workers are no longer restricted to routine operations, enjoy management powers, and can contribute to developments in their work processes.
- New technology also has an impact on the organization itself, as follows:
- Organizational reformation is required. This reformation makes the organization flat. Decision-making powers are decentralized.
- Communications are better and the organization is capable to make timely responses to its environment.
- Introduction of new products and services is improved and varieties of products can be efficiently introduced and marketed by the organization.
- The organization is competent to improve its efficiency, quality, and competitiveness.
- Today’s advanced technology can, conversely, easily become a basic technology. A rapid increase of new technologies also brings rapid obsolescence of earlier technologies. Policies concerning technology must not be static; they must keep evolving. Stalk (1988) points out that “competitive advantage is a persistently moving target . . . The best competitors, the most thriving ones, know how to keep moving and always stay on the cutting edge.”
- A company should be able to evaluate potential new technologies quickly. The goal must be to remain competitive, and effective management of technology is a vital step in achieving this. With an increased focus on customer satisfaction, technology is a decisive means for achieving customer satisfaction. Browning (1990) notes that a learning organization “uses technology incessantly to refresh its knowledge of its customers’ wants and to work out new ways of satisfying them.” This commitment to be a learning organization needs vast resources, however. For example, Browning also points out that building a learning organization “necessitates new skills, clever people and capable machines.” Noticeably, technology and human resources should be used together for the organization to stay competitive.
- Barabba and Zaltman (1991) note that “hearing the accent of the market and making constructive use of it with respect to the voice of the firm is a learning progression.” Essentially, the voice of the market has to be interpreted into facts and tasks that will lead to suitable products or services to satisfy customer needs. This is related to the application of quality function deployment, whereby the organization expands its strategic plans to assure customer needs. Thus, a learning organization should also be a caring organization. As a caring organization, its major objective is to please its stock or stakeholders, its customers, and employees, and also to be collectively responsible. The traditional organization, with the focus on satisfying stockholders alone, is varying to this new form, with a sophisticated stakeholder group.
- Thus, Technology and human resources’ management are recognized as key variables that facilitate an organization to improve its productivity, quality, and competitiveness. A critical constituent is the information technology, which offers both opportunities and challenges. The organization should show understanding to its environment via its policies, and be learning and caring organization, as time and reliability influence competitiveness. Finally, organizations should innovate and constantly move to achieve new targets, particularly in view of today’s rapidly developing new technologies.
- Deregulation and globalization (lack of government control)
- The ‘competition’ and globalization both present descriptions of the interaction between government and economy whereby the government is seen to extract to a much diminished role (Cerny 1990). The Fordist or corporatist idea of the government as working a managerial role with regard to the national economy, comprising a fairly high degree of direct capitalist ownership and production is long accepted to have passed (Amin 1994). The post-Fordist government that has reinstated it was a product partly of conscious policy, most perceptibly by ‘privatization’, and partly as a consequence of wider structural changes in the world economy. The enduring process of privatization all through the world was itself a response both to the emerging fiscal crisis of the government throughout the mid seventies and the reconfiguration of the world economy following the collapse of Bretton Woods.
- The internationalization of production during these years, which numerously regard as the first phase of globalization, saw the first substantial de-linking of systems of finance and manufacturing from traditional locations, mainly the industrial regions of Europe and North America (Amin 2000).
- The consequences of these changes have basically been analyzed in relation to emerging space economies at the global and local levels. A generally cited feature of the extremely mobile capital of the emerging global economy is its capability to circumvent the national level together. Even as the most marked expressions of this are found in those parts of the government selected (by the government itself) as ‘offshore’, this is also true of the rest of the national economy.
- A substantial literature has developed to explore the scopes of the relations between global capital and local places, which tends to assume that the institutions of the national economy are completely circumvented. In the new ‘economy of flows’ or the ‘economies of signs and space’ what matters is the ‘global’ (Robertson 1995). National economic policies have become geared toward helping internal competition between diverse industrial regions for investment.
- Competition is provoked by a combination of spatial and fiscal policies such as regional development agencies, ‘pre-competitive’ infra structural improvements, tax holidays and all way of financial ‘sweeteners’. As a result, transnational capital is seen to discuss directly with regional authorities—over the terms and conditions of their investment, including labor conditions, levels of service condition and infrastructure as much if not more than they do with national government. It is as though local and regional economies have ceased to be entrenched in a national economic space, but now compete directly with other related places in other governments in a global space.
- Not astoundingly the centrality of national economy is hidden by this new configuration, not least because; the national economy is not mainly a spatial category. The global and the local as, correspondingly, all-inclusive economic space and production ‘node’ or ‘a growth poles’ are far more persuasive spatial configurations (Amin and Thrift 1994). The role of the government faced with this new realism is to withdraw and to facilitate private capital to exploit the prospective of the new competition.
- The ‘hollowing-out’ of the government required in these processes of privatization and globalization/localization is, however, much over government. The presentation of the role of the government as increasingly ‘deregulating’ economic space obscures the extent of re regulation that is taking place (Dodd 1994:90). In numerous ways even that is an over government since the core function of the government with respect to the economy has not actually changed all that much. Rather than be forced by an external force of globalization across the board, as the cruder versions of that theory lean to claim, the government has created conditions whereby it should remake the normative differentiation drawn between diverse aspects of its ‘national’ economy with deference to the global. The government has not recoiled but has reconfigured the way it applies its rules so that they are no longer national, in the sense of being collectively and evenly applied all through the territory of the government. The ‘reality’ of the global economy is, as a result, routinely marshaled in defense of the orthodox econocentric elucidations to national social and economic problems (Peck 1998).
- The conventional image of the permitting government is one that is essentially withdrawn from the economy. The government no longer reinstates entrepreneurship through public ownership but enables it through a blend of privatization, ‘pre-competitive’ measures and structural alteration. The imagery and practices of the corporatist and/or Fordist government have been reinstated by a much more fragmentary and fluid conception of national economic space, which even if still bounded and regulated, is beyond the capabilities of the government to control. This is both an intentional policy fostered by national governments concerned to resolve balance of payments and fiscal problems, and a product of the gigantic expansion of the financial and securities sector.
- The government might have inhibited to several extent as an owner of capital (though of course in most cases’ governments retain substantial asset portfolios and direct capital investments), but the government’s role as regulator of capital relations and as supplier of currency and security remains. Privatization has frequently been misrepresented as a procedure of deregulation, predominantly by those with a political interest in claiming government withdrawal as a virtue, whereas it is more suitably seen as a procedure of deregulations.
- As such the contribution of the government with its protective economy has not diminished; rather, its prominence has changed. The private national economy is apprehensive to standardize national economic policy to the realities of the global economy and, even more distantly, to the pressure of the process of globalization. This in itself does not symbolize as much of a disparity as is often claimed since the global economy is a conservatory of the inveterate concept of the ‘world economy’.
- Certainly, it is worth recollecting that the notion of a world economy was coeval with that of the national economy and has constantly lent the national economic boundary a dual role. The boundary function both as a territorial delimitation of one government from another, but at the similar time has always operated as a line drawn between the territorial space of the government and the implicit space of the ‘world’. The world economy, like its global descendant, occupies a space that is variously above and between national economies. It functions as an impartial space that provides a benchmark, arrived at through the aggregation of national economic statistics, to breed world prices. Everything has a world market price against which national prices are estimated.
- Capital market (stock market)
- This is not to deny that the extent of interaction has increased gradually over time, though the time involved has been centuries somewhat than the last few decades. The diverse industrial revolutions paced this up. Basically, once two societies’ trade, they become mutually dependent. The stock markets subside in New York in 1929 triggered the Great Depression in all parts of the world with any momentous economic relationships with the United States. Interactions were closer than they had been previously and they were to become even faster. The complex capitalist economies were tied intimately together in the long run even if short-term fluctuations were less rapidly passed on (Aiki S. 1991).
- Though, is speed of such enormous importance? Thus, there is a global stock market today in that information from a stock market in one part of the world is broadcasted immediately to those in others; ever since the start of electronic communication this has been the case. In fact, information in London about the New York market passed more gradually before 1939 and even more slowly before 1914. It was slower in spreading around and was far less comprehensive than now. Nevertheless, big movements in the stock markets were known and reflected in the stock markets of the world. Short-term and smallish fluctuations are imitated all through world markets today more rapidly than they were in the thirties, but big and long-term fluctuations always were reflected around the world once markets had become consistent (Collins J. C., and J. I. Porras. 1991).
- We can go even a further back and argue that globalization, in the logic of a growth in interconnectedness between members of different states, is itself only a special case of something more universal. In medieval Europe most people for most-of the time stayed close to where they were born. They inspired mainly local goods and, primarily, produced either for themselves or for a very local market (Schlossberg H. 1992). Economies were mainly local. Trade over considerable distances took place on water either by sea or river, which accounts for the inconsistent number of towns and villages which were either by the sea or on rivers. Human beings seem to have had a steady urge to detach themselves from the area as much as the technology of the day permitted. Certainly there have always been big movements, sometimes of populations looking for better circumstances and of conquerors building empires. Under the Roman Empire, large parts of Europe were ‘globalizing’ in this sense and the degree of globalization declined with the Empire’s retreat. The medieval Church could be seen as several form of globalizing force but the degrees of interaction and interdependence were much reduced in the so-called Dark Ages.
- Communications are also of significance in considering the ‘nationalization’ of different states. As communications enhanced (which before electronic communication meant, in fact, how fast people could travel), states had much more practical unity. This was mostly true of large states such as Canada and the United States where the railroad meant that people could travel between the major population centers, and numerous of the minor population centers, within two or three days as opposed to weeks. Markets then became national as an instant precursor to becoming international. These changes can all be measured parts of the same process.
- On this view, globalization is a trend which has been going on for centuries, which is undeniably continuing and might be accelerating. In this sense, the present period is not in itself novel. However, Scholte (1997) argues that there is more to globalization than this. For him globalization is not just communication on a global scale but deterritorialisation or superterritorialisation of numerous activities which formerly were tied to some terrain, not as a matter of an accident but as a matter of necessity. Thus, there is efficiently a global stock market. There is twenty-four hours trading in the world as a complete and traders in, say, the Tokyo markets keep a close eye on the London market on a real-time basis. There are differences. Tokyo is not just a postal (or e-mail) address of any implication but these differences are minor compared with the similarities or with the distinctions that existed even thirty years ago. It would most probably be possible to place all the worlds’ stock markets in a single place say on a South Sea island and it would make very little difference. It would perhaps make even less difference if this were to be done in twenty years’ time. (It might be a development. The traders might be so tempted by the sun and the good life that they would spend less time trading. Thus, trade less anxiously, and calm the often totally needless fluctuations in the various financial markets.) On the other hand, certainly, all the traders could work from home. This is the point. The actual geographical location is trivial (Weiner E. 1992).
Thus, to compete effectively, business organizations should develop a technology strategy. Moreover, as the concept of the globalization significantly extends this concept to government; not least by giving it an influential institutional framework, but does not significantly alter its function. The global economy does, though, stand in a different relation to the government since it is no longer neutral. It is still presented as apolitical, and is consequently still understood to be ‘economic’, but it has also become a normative and, certainly, normalizing, reality.
The global economy functions in a different way with regard to the government; whilst movements in the world economy have long inclined economic policy within the government, the global economy presented as some new realism forces changes in national policy as a complete. This has the further significance, of forcing the government to distinguish between its proper function with regard to the global future and its function with regard to a sub-national, local past.
Through the formation of the competition government, the homogeneity of the national economy though assumed in theory is cooperating in practice. The national private economy ceases to be believable as a homogenous unity and becomes a single but distinguished space. This has, certainly, always been the case, but the mobility of capital and the disintegration of the labor-intensive fordist production systems in the North has grinded the differences between regions of the similar government.
Aiki S. (1991)”Aisin Envisions its Path to Success.” Quality Progress, March, pp. 83 87. Collins J. C., and J. I. Porras. (1991)”Organizational Vision and Visionary Organizations.” California Management Review 34, 1: 30 – 51. Schlossberg H. (1992) “Kids Teach Parents How to Change Their Habits.” Marketing News
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