Strategic Management In A Flat World

Would you believe me if I told you the world was becoming flat? Well, it is, just not necessarily in the literal sense that you may be assuming. The recent advances in technology and communications have led to the rapid spread of globalization. This new level of connectivity is serving as the equalizer between “industrial and emerging market countries.” To put it bluntly, the gap between what we once thought were more highly developed nations and those less efficient, is shrinking at an incredible rate. To determine what this means and what effects it will have on managers of corporate America we must take a more in depth look.

What is making the world flat? Globalization is the prime catalyst for continuing the flat world process. However, it can be narrowed down more directly to telecommunications and outsourcing. It was not until recently when countries such as India and China have risen as international economic powers. They have realized that the free market system, which uses competition to ignite growth, is paramount for reducing the poverty of a nation. Free enterprise guarantees that “new ideas, technologies, and best practices will easily flow into your country.” These new concepts, when put to use, inevitably lead to new jobs and products. China and India have had a noticeable drop in their poverty level in recent years, while in contrast; non globalizing Sub Saharan Africa continues to become more impoverished than ever before.

It has become evident that countries must make these changes in order to be able to compete in the worldwide economy. In addition to the technological improvements, occupational changes are imperative to the contribution of a flat world. The term outsourcing involves the sharing of management control and or decision making to an outside entity. It is most often heard when a company outsources its workforce. It usually occurs when management decides they can hire cheaper and more cost efficient labor often in another part of the world. This is why much of the articles of clothing we wear, say “made in China” or “made in Taiwan.” A company based in the United States can pay workers oversees a much lower rate than they can in America. This doesn’t sound like much, but outsourcing in an age of an ever improving communication system is really bringing the world closer together.