Strategic Management In A Flat World

Strategic Management In A Flat World

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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.

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It is truly remarkable that when you call the customer service department of some of the world’s largest corporations you are directed to a representative often located half way around the world. Companies can be based in one part of the world, but the entire workforce can be located 2000 miles away and be just as effective and efficient as if they were on site because the communication structure is so tightly bound.
There are other factors flattening the world, but they can be categorized under the technological boom and labor change. It was when these factors converged that ultimately led to the creation of the flat world. Still wondering what this means? Thomas Friedman, the theorist of who donned the term flat world, summed it as the following: “a global web enabled platform for multiple forms of sharing knowledge and work irrespective of time, distance, geography, and increasingly even language.” More or less stating that the world is becoming a smaller place, technology can connect anyone two or more parties together with a click of a button.
With that said, the coming of the flat world is unavoidable, and we must prepare for the repercussions that follow. Unfortunately there are still third world countries that are not present in the flat world and as time progresses they will be distanced further. Much of the time, these areas are too impoverished, disease plagued, and have a lack of government to make the situation any better. Without taking steps to fix these challenges these areas will remain the way they are despite how flat the rest of the world may become. Since many other countries are leveling the playing field, it makes it more difficult to differentiate them, as it was much easier in the past. This puts the United States in a very precarious position.
The United States has been an economic powerhouse for some time now but they are quickly losing their edge. The flat world enables companies in the US to find cheaper labor abroad that is equally qualified for the position. This can be seen in two different lights, it will reduce jobs in America, but it will also maximize production efficiency. If people don’t have jobs, they won’t have the money to purchase the products that created so quickly. If this is the case there must be some point of equilibrium. However, you can also look at this from a different perspective. When applicants in the United States are job searching, they are not only competing with fellow Americans but also Asians, Indians, Europeans, among many others. Yes, this will make it much harder to get the position but it will also raise the bar in the sense that we will have to work harder to get what we desire. As a result, only the best will be hired at every position. This is definitely going to spark some innovation and change for the better.
Now, you must assume that everyone is going to be cognizant of this, so how will future workers (students) and managers adapt to keep up to par or surpass the competitors? It is important that all students recognize what is occurring so they can prepare themselves for the future. Students must apply what they are learning to the global scale. It is equally as important for the educators to make the same changes in how they are teaching. The model that has been used in the past is constantly changing, and is no longer applicable in a flat world. The key to succeeding, according to Friedman, is making yourself “untouchable”. This means students should be looking for jobs that cannot be outsourced, automated or digitalized. For example, many telephone receptionist jobs have either been outsourced or replaced by an automated answering machine. There are however, three types of “untouchables” that students should know about.
First, is those people who are “special or specialized” often includes athletes, performing artists, top medical personal etc. These people have skills that are so highly admired or useful that they will not be replaced or outsourced. Second, are people that are “anchored” and this includes a long list of occupations. These are people that must be on site to perform their job such as: waitress, barber, plumber, dentist, garbage collector and many others. These jobs will not disappear because the working personnel are so highly needed. Lastly, are occupations that were once considered middle class such as assembly line and data entry workers. Unfortunately, these jobs are evaporating quickly do to automation. Only a few of these positions will be necessary in the future, while many of them will be taken over by machine. This poses a big threat to middle class workers because they are the largest sect of the workforce. It is likely that new middle class jobs will appear to take the place of those that are swept away with the flat world. These new jobs will not be like those in the past and are expected to require a totally new skill set. As a student, your job is to acquire skills that will be needed in the future so you cannot be replaced or become a victim to outsourcing.
Effective strategies from a managerial perspective are changing drastically from the past. Businesses have been able to do what they’ve never dreamt of just in the last few years. Because of this, businesses will be faced with stronger competition and pricing pressure than ever before. Mangers must think ‘outside the box’ for an innovative strategy that will produce the most for the least cost. Any business in a flat world, large or small, will have to adjust to the new realities. To stand out, the small businesses must act big with the new technological tools at their disposal. Conversely, the big companies must start acting small by catering to the needs of the individual consumer. Managers must utilize every means possible to thrive in the flat world. They must take advantage of outsourcing and collaboration to drive performance levels to a new high. It appears that change is the only constant, so managers must not become complacent with success. To keep up in the flat world, new ideas must keep pace as the environment evolves. Managers incur an extremely difficult task in this ever changing world.
With the world changing ever so quickly the eyes must be on the future and not dwelling on the past. The flat world is presenting us with new obstacles, opportunities, and threats especially as Americans. We cannot stop the flattening of the world, but we can however change in accordance with it. This may require us to work harder, be more imaginative and creative than ever before. Managers and students especially, must adopt the new qualities necessary to thrive in these conditions because they will create the future of the workforce. And everyone must face the fact that globalization is creating a competitive environment that is revolutionizing the way we live, think, and act.

Works Cited

Thomas L. Friedman. The World Is Flat: A Brief History Of the Twenty First Century.

New York: Farrar, Straus and Giroux, 2005.

Murray, Art. " Making knowledge-informed decisions in a flat world." KMWorld
Magazine. 2007. Bradley University. 8 March 2007.

Goulden, David. "Managing IT for a Flat World." Business Week Online (2006): 6-6.

Academic Search Premier. 14 April 2007.
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