Monday, August 20, 2007


The dawn of the 21st century presupposes organizational systemic preparedness for retaining and gaining competitiveness in a global and native business scenario. The early 20th century predominantly focused on the manufacturing or the production priorities of the firm. The sciences espoused manufacturing excellence with speed, automation of the human systems, socio technical variables for efficiencies, scientific management, mass production, assembly line advantages, single product dominance and worker productivity. What followed was the consumer era with the corporations prioritizing its energies towards creating and sustaining brands, products and life style interventions for the consumer. Sales and distribution networks were expanded to ensure reach, effective market penetration, identifying the consumer in the common person and ensuring product availability at his/her point of purchase. The last two decades and the quarter of the century realized the potential of the systems, electronic data processing, information management and tools and techniques to help organizational data analysis, synthesis, decision support and primarily consolidation and retrieval. The systems were available for corporate use and effectiveness.

We are now at the threshold of the knowledge era, where the intellect would dominate organizational processes, make information and data only a fundamental and necessary condition for knowledge creation and management. The analysis, synthesis, and enveloping variables would be people, process and environment for making things happen. The 21st century environment, at least, in the first decade appears to be quite predictable for organizational scientists. The emergence and happening of the knowledge era is for sure. In the knowledge economy corporate performance is measured by the return on the knowledge invested. In fact knowledge is a personal wealth when it is achieved and is a corporate asset when it is shared and institutionalized.

Capital resources and asset management turns negligible management parameters for creation of shareholder wealth. While investing resources continues to be an essential ingredient for corporate competitiveness and retaining innovative advantages, money by itself would mean precious little to make or break a deal.

Knowledge brought in and grown by the corporate determines organizational competitiveness and successes seen as fundamental for business survival. The premium for managerial actions is on the ability to attract, hold, and maximize the intellectual equity available within the corporate. Interestingly the cycle of maximization, optimization and minimization is inevitable in human capital management too. People bring in to their organizational settings a core set of knowledge, experience, competencies, skills, learning, training, demonstrated performance and potential. The summation of this set of parameters is the organizational intellectual equity. The environment necessitates global networks, connected business portfolios, functional linkages across geographies, resources grouping and sharing in a seamless, boundary less organizational space. It is an opportunity to invent anywhere and share in all necessary places as may be deemed appropriate. Concurrently corporate, environment and people manifested boundaries are seemingly disappearing. Corporate creation and management are no longer asset dependent and myopic in term. There is a distinctive alignment of objectives on what constitutes corporate wealth and should be nurtured and grown in value. At the external influence scenario there is a critical focus on value imperative and making marginality appear incompetent. The customer does not pay for corporate inefficiencies and poor management. The opportunity to transfer in the short and medium term organizational handicaps to the customer or in some situations where environmental protection was available the inefficiencies continued and was shared with the customer indefinitely. Nevertheless value and service imperative become fundamental, unarguably. The customer truly has limitless options to determine alternatives, evaluate concurrent advantages, make choices on a time frame that is open, transparent and easy to administer. In other words the customer is under no compulsion to buy what is available at the first distribution location or be governed by ad factors that profile the products more attractively than what it delivers. Options have not emerged because corporate turned efficient in the consumer environment, but the environment in which the consumer shopped turned turtle. Products that were far and wide in reach and purchasability were now available at the current consumer environment for added value at an affordable price.

The 21st century business is likely to cope with a dramatic managerial change given the advent of information technology and knowledge emphasis in the basics of management actions. The service trade-ons meant more value at lower cost and the organizational product offering reflected choice, value, service and shopping advantage to the average consumer.
The new order business necessitates aggressive IT investment, basically to remain competitive and cope with the changing environment. Service to the consumer necessitates core and purposeful IT investments meant to dramatically make the winning product difference. Technology should substitute infrastructure in any form. In the organization form of the firm structures turn wide and spread out across product, geography and functional boundaries. Forms could mean multiple business units connected by the value adding staff and a core corporate group. Functions and businesses need to integrate for effecting customer service. Yet functional and specialist compromise for depth of the intellect is counter productive. Pyramids no longer should be repeated for each of the product segment with the SBU as a method. The alternate forms of MBU with brand - market and product - manufacturing focus would turn more effective for the IT driven organization. All other services are available electronically. The 21st century business presupposes cooperation and collaboration for effective competition. Market strategies to demonstrate dominance without value but by consumer influencers would turn counter productive for corporate. Competition would but find inevitable to collaborate and cooperate to make the product offering aggressive to draw the customer towards it. The current trend in mergers of mega corporate that are successful with larger corporate is an indicator of the inevitable trend of large corporate cooperation. Yet the corporate need to bring in boutique products to suit the frills and thrills of a discerning consumer, make the manufacturing process mass customized, demonstrate manufacturing flexibility all make a satisfied customer. Wealth from manufacturing is being created by ideas, brainpower – design, logistics, marketing, sales and information systems.

Human society is infinitely complex and difficult to interpret and manage. Rarely do rational choices become the fundamental orientation for managing the human issues. Technology has only added to its complication. For companies to maintain and enhance its competitiveness a broad spectrum of understanding is essential t differentiate between compelling and not so compelling parameters in human management and technology interface. Large corporations derivea worldview as they see the co existence of human factors and technology imperatives that make organizations viable and growing.


The world of knowledge brings in essential characteristics:


  • The top 20% of the world's labor force constituting the knowledge worker and today this knowledge worker will earn more than the other 80% combined. This knowledge-based work will represent the bulk of wealth creation in modern economies - 92% of the GNP by the year 2010.

  • Enterprise growth will be determined by innovation that in turn depends on knowledge and the intellect.

  • The value chain restructuring will ensure 70% to 90% value additions in service "intangibles". To list a few, these intangibles are customized service, online ordering, mail-order delivery, electronic commerce services. The value element of manufacturing and raw material content in the provision of any product will constitute only the balance 10 to 30%.

  • The brain and not the brawn would turn into the critical success factor for economic growth. Intellectual infrastructure which is inherently more difficult to organize and manage, will gain predominance over physical infrastructure which can be globally resourced.

  • The internet and the world wide web are revolutionizing the way we work, the way we do things to make things happen and the way we would find corporate most effective in the toughest of business environments. All because of knowledge and information at the call of a business enterprise.

  • A new electronic market place is in the making. Consumers are now in a position to do things stationery. Their mobility demands to make conspicuous consumption and satisfy themselves is very much possible in a static state. In fact their ability to sift through alternatives and make a discerning purchase decision is infinitely high given time, data and analysis available through the electronic media.

  • Venture capital investments will compound in the electronic knowledge industry with more dormant investors willing to play silent for an aggressive enhancement of shareholder’s wealth.

  • The blue-collar workforce numbers will decline and wage disparity between the knowledge worker and the manual worker will rise. This will cause unseen volatility between hitherto peaceful teams coexisting in a mutually dependent work environment.

  • Knowledge based competencies and core functional skills will determine employability. People will no longer be in a position to obtain and retain jobs on their inherited knowledge. Their competitive positioning will sustain only with updated state of art knowledge, contemporary enough to hold on to their jobs. Even the traditionally physical work such as factory employment will call for a knowledge worker multi-skilled in manufacturing technology and Information systems.

  • The rise of single state entrepreneurs will rise several folds. People with a machine and mind will begin to make things happen. Their competitive advantage will be their ability to think technologically and scientifically keeping behavioral compulsions of the work place to a bare minimum.

  • One quarter of the previous years training and development programs, skill courses, knowledge-updating efforts are either outdated or useless for today’s scenario.

  • Computing facilities, technological capabilities facilitate global networking and management functioning simple and easy to administer.
  • Shift in markets to erstwhile third world economies, shift to the second world post end of the cold war make available cheaper and substitutable opportunities
  • Product development and innovation competencies become possible, easier to replicate, in these new worlds given availability of human resource from the first world at affordable prices.
  • Greater market research capabilities and transmission of market knowledge on an on line basis make product offering in a well planned informed manner. The data transmission capabilities make decision making and backward production planning efficient and eliminate loss of wasted production and carrying of unnecessary inventory.
  • Global low cost supply chains facilitated by electronic networks, polygenic access to consumer data, needs and wants make linkages to the supply chain effective. Supply chains will have seemingly virtual connectivity and dynamic configurations.
  • Knowledge has made the inevitable happen intellectually. The gap between the third world and first world is radically thinning given equivalent access and database. Process conversion will inevitably be the concern to the third world.

No comments:

Post a Comment