“The world is a web of interconnected trends, organization, labor markets and professionals, not a division into one hundred and eighty autonomous and separate nations.” Peter Townsend
Global economy, of course existed for hundreds of years – colonization resulted from trade and cheap overseas sourcing. Procuring and purchasing from the cheapest markets is globalization. Individual countries are less powerful. Multinational Corporations and international agencies operating on a twenty – four hour basis dominate the global economy. “Mega – organizations are like countries but they are not accountable to anyone.”(Charles Handy, 1995). The United Nations 1997 Human Development Report states that the biggest winners have been the Multinational Corporations. There is a relative shift of power from governments to corporate bodies. Peter Drucker rightly says “no society has had so many centers of power as the society in which we live…..”
In the global economy, the growing dominance of business organization results in: lack of control over the future, lack of job security, constant development of new products and processes, before we understand the new information – it changes, great disparity in wealth, deteriorating discipline and values, acid rain, ozone layer depletion, global warming, finally quality and excellence revolution. Today everything from family life of working and shopping has changed. Corporations functions in a volatile and complicated environment. They have to deal with: global economy, technological revolution, information proliferation, huge growth in the size and scope of international business, increasing environment damage.
In this transparent world, organizations are under tremendous pressures to acknowledge their Global Social Responsibility. They need to work hand in hand with government to address fair distribution of wealth, fight corruption, oppression and human rights abuses and environmental issues. In the book “The living Company” Arie de Geus pointed out that most companies die after 40-45 years, but there some that are over 200 years old. He contends that companies with long successful life have four characteristics:
• Sensitivity to the external environment, which allow the company to learn and adapt.
• Cohesion and identity, which allow the company to be a community and have a personality.
• Tolerance and decentralization, because the company understands its own ecology which enables it to build new relationships in and outside the company.
• Conservative financing which allow the company to govern its own growth and evolution.
In another research on long life companies, “Build to last” by James C Collins and Jerry I Porras said that “visionary companies make money than the more purely profit – driven comparison companies.” The study showed that “successful habits of visionary companies” are: they showed resilience struck to their core ideology; profit maximization was not the dominant driving force or primary objective. The Institute of Global Ethics in a survey to focus group around the world asking people to list the five values that they would like to see. The five values chosen on how a business can demonstrate that it is responsible:
1. Compassion: Sharing success with those less fortunate in society.
2. Honesty: Transparency and integrity in al business dealings.
3. Fairness: Providing employees work-life balance and opportunities for continuous learning and improvement.
4. Respect: Respecting individuals irrespective of gender, race, disability, age or sexual orientation.
5. Responsibility: Business needs to recognize sustainable development and take responsibility for the environmental impacts.
The bottom line is organization should – think interdependence, have clear principles, embrace change and complexity, compliance with social responsibility and be educative and knowledgeable.
Reference:
1. Charles Handy, (1995), “Gods of management”, Oxford University Press, New Delhi.
2. Peter F. Drucker, (2004), “Concept of the Corporation”, Transactions Publisher, Rutgers.
3. Arie de Geus, (1997), “The Living Company”, Longview Publishing Limited, United States of America.
4. http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?tp=&arnumber=820020&isnumber=17783
© Padma Shankar, “Business in Global Economy” Reader’s Shelf, Volume 6, Issue Number 7, April 2010, pp. 19-20
Global economy, of course existed for hundreds of years – colonization resulted from trade and cheap overseas sourcing. Procuring and purchasing from the cheapest markets is globalization. Individual countries are less powerful. Multinational Corporations and international agencies operating on a twenty – four hour basis dominate the global economy. “Mega – organizations are like countries but they are not accountable to anyone.”(Charles Handy, 1995). The United Nations 1997 Human Development Report states that the biggest winners have been the Multinational Corporations. There is a relative shift of power from governments to corporate bodies. Peter Drucker rightly says “no society has had so many centers of power as the society in which we live…..”
In the global economy, the growing dominance of business organization results in: lack of control over the future, lack of job security, constant development of new products and processes, before we understand the new information – it changes, great disparity in wealth, deteriorating discipline and values, acid rain, ozone layer depletion, global warming, finally quality and excellence revolution. Today everything from family life of working and shopping has changed. Corporations functions in a volatile and complicated environment. They have to deal with: global economy, technological revolution, information proliferation, huge growth in the size and scope of international business, increasing environment damage.
In this transparent world, organizations are under tremendous pressures to acknowledge their Global Social Responsibility. They need to work hand in hand with government to address fair distribution of wealth, fight corruption, oppression and human rights abuses and environmental issues. In the book “The living Company” Arie de Geus pointed out that most companies die after 40-45 years, but there some that are over 200 years old. He contends that companies with long successful life have four characteristics:
• Sensitivity to the external environment, which allow the company to learn and adapt.
• Cohesion and identity, which allow the company to be a community and have a personality.
• Tolerance and decentralization, because the company understands its own ecology which enables it to build new relationships in and outside the company.
• Conservative financing which allow the company to govern its own growth and evolution.
In another research on long life companies, “Build to last” by James C Collins and Jerry I Porras said that “visionary companies make money than the more purely profit – driven comparison companies.” The study showed that “successful habits of visionary companies” are: they showed resilience struck to their core ideology; profit maximization was not the dominant driving force or primary objective. The Institute of Global Ethics in a survey to focus group around the world asking people to list the five values that they would like to see. The five values chosen on how a business can demonstrate that it is responsible:
1. Compassion: Sharing success with those less fortunate in society.
2. Honesty: Transparency and integrity in al business dealings.
3. Fairness: Providing employees work-life balance and opportunities for continuous learning and improvement.
4. Respect: Respecting individuals irrespective of gender, race, disability, age or sexual orientation.
5. Responsibility: Business needs to recognize sustainable development and take responsibility for the environmental impacts.
The bottom line is organization should – think interdependence, have clear principles, embrace change and complexity, compliance with social responsibility and be educative and knowledgeable.
Reference:
1. Charles Handy, (1995), “Gods of management”, Oxford University Press, New Delhi.
2. Peter F. Drucker, (2004), “Concept of the Corporation”, Transactions Publisher, Rutgers.
3. Arie de Geus, (1997), “The Living Company”, Longview Publishing Limited, United States of America.
4. http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?tp=&arnumber=820020&isnumber=17783
© Padma Shankar, “Business in Global Economy” Reader’s Shelf, Volume 6, Issue Number 7, April 2010, pp. 19-20
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