Since the world is getting increasingly dynamic, significant changes of the business environment occur more often in shorter periods of time. In order to have a chance to survive in the tough global competition, it is crucial for corporations to have the capability to recognize important changes and adapt the corporation’s strategy. My first posting deals with this issue.
Attitudes towards American Business throughout the Years
In the United States, business has never been perceived completely positive. In the late 19th century, industrial mass production and the creation of the transcontinental rail system led to harsh and dangerous working conditions, which had a bad impact on business’ reputation.
In the 1920s, the fast growth of the economy brought about great disparities in wealth distribution. The stock market crash in 1929 and the following “Great Depression” further worsened business’ image.
The prosperity of the 50s and 60’s enhanced the population’s confidence in business. The fact that the expression “golden age” is used by the Americans to describe this period gives evidence to the population’s positive perception of that time.
Because of the Watergate Scandal, the Vietnam War, and the oil embargo by the OPEC business’ image turned into negative again. In the 1970s, Americans lost their faith in the society’s big institutions and even the economic boom of the 80s and 90s could not restore this faith. Due to the burst of the “Internet Bubble” in 2000 and the frauds at large companies such as WorldCom, Tyco, and Enron, this situation has not changed in the new century.
Hollywood: A Window on Main Street and Wall Street
History shows that arts and literature have always affected and reflected a population’s perception of institutions. Today, TV is the most important media. Since people in the USA spend much time in front of the TV set, TV has become the most important source of information for the majority of Americans. Businesspeople are portrayed negatively in almost two third of all TV programs. The negative portrayal of business in films and news is rather a reflection of business’ negative public image than its cause. However, the dramatization and exaggeration in TV programs and Hollywood movies can reinforce the negative image of business.
The Global Village
According to the Canadian philosopher Marshall McLuhan, the strengthening of global communications channels resulted in a disintegration of national borders and the creation of a “global village”. Because the world is getting smaller, corporations will not be able to avoid operating in foreign countries with unstable political, economic and social environments. Another trend is the corporation’s specialization on core competencies and the outsourcing of strategically not important activities, or alternatively, mergers to integrate suppliers.
Since corporations are becoming global organizations, they have to deal with the anti-globalization movement, which has developed in the last years. Technological progress made the worldwide organization of protests possible; the 1999 anti-globalization protests at the World Trade Organizations annual meeting were mainly online planned.
How to Compete in a Changing Environment
Since the world has become more dynamic in the last years, corporations face a variety of environmental changes. When dealing with environmental changes, managers should concern following things in order to support a company’s success:
1) Recognize the Changing Environment
Managers need to recognize that the constantly developing environment make it necessary for corporations to thoroughly observe changes that could affect their business. They should be able to anticipate the most important changes, such as evolving consumer tastes or technological innovations in order to determine appropriate responses to those changes.
2) Adapt to Environment without Compromising Principles
Although corporations should adapt to the evolving environment, they must not violate their corporate identity or principles. Since the stability of a corporation’s principles is a very important source of success, those principles should not be changed when a company responds to environmental development.
3) Do not Assume Problems Will Magically Disappear
Problems cannot be solved by simply waiting and doing nothing. Sometimes managers have to try new, unprecedented methods to solve problems.
4) Keep Corporate Communication Connected to Strategy
Many managers disregard the strategic importance of communication. However, successful companies closely link communications to a company’s overall vision and strategy. They create structures, in which the head of corporate communications reports directly to the CEO. The consequence is that communication becomes more focused on the company’s strategy.
In order to communicate efficiently, a corporate mission should be defined and communicated to internal and external constituents.
Class Discussion (01/17/08)
In class, we talked about our understanding of the term communication. We came to the cocnlusion that communication is the interaction between at least two persons in order to exchange information. There are different ways of communication; persons can communicate verbal or non-verbal (body-language). Verbal communication, for example, can be written or spoken. A person's behaviour in interaction with others is always a kind of communication since information is sent from the source (the person who sends the information) to the recipient. The way of transmission of the information is called channel and noise is defined as any interference of communication.
The development of modern communication media has given us a lot of new tools to communicate. In class ,we discussed several new possibilities of communicating. Many of them are related to the develpment of new technolgies. These new technologies will be introduced in the posting "Communication technologies."
In our organizational communication course, we will experience a variety of ways of communication. This will help us to assess what tools suits best to us. Perhaps, we will find new insights about our personal comfort-zone. A comfort-zone is an individual’s most appreciated way of communicating. The comfort-zone can refer to the environment (communication in small or big groups) or can refer to the form of communication, such as speaking, writing, and listening.
Personal Experiences/Examples
Since I am from Europe, I witnessed the process of integration of the European Union. The so called “Schengen Agreement” between 28 European countries came into effect in 1995. It arranged the abolition of systematic border controls between West- and Middle-European countries. Back in the early 90s, travelling in Europe was very cumbersome, but in the course of the last decade physical and mental borders vanished.
Since today there is a single European market, former national corporations are striving to become huge European corporations. Today, the domestic market for those corporations is the whole European market. Thus, corporations can rely on a bigger European domestic market as a base for their global operations. This helps to be successful in the tough global competition.
Furthermore, the abolition of borders caused increasing competition within the European Union. The increasing competitive pressure makes companies to work efficiently and to be innovative. European consumers benefit from the increased competition through lower prices and improved quality.
Another personal experience is the development of information technology. In the late 90s, progress in technology allowed European people to purchase cell phones; I was one of the persons who bought one. The cell phone meant new mobility since you could be contacted at any time and wherever you were. Simultaneously the spread of the internet gave the people quick access to information. Information could be exchanged quick and convenient. This resulted in a mental reduction of physical distances.
Also, companies benefited from this trend since they could create faster and more effective information channels. This could raise their productivity.
A threat for companies referring to the technological progress is the more dynamic environment, which was caused by the improvement of information technology. The increased dynamic of the environment created a greater uncertainty for corporations. Organizations have to analyze the advancing technology thoroughly in order to stay up to date.
Links:
http://www.iht.com/articles/2007/11/25/business/25climate.php
http://www.rsc.org/Publishing/ChemScience/Volume/2006/06/drug_companies_need_change_strategy.asp
http://www.informationweek.com/showArticle.jhtml?articleID=201803575
http://www.ns.umich.edu/htdocs/releases/story.php?id=998
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