The themes of technological innovation, entrepreneurship, and organizing

UNDERPINNINGS AND GLOBAL REALITIES Prevailing Business Situation

The current economic crisis, the so-called Great Recession, has shed new light on the many dif­ficulties and problems facing business leaders, politicians, government officials and NGO lead­ers as they try to right the global economy and develop new mechanisms for dealing with the related challenges. All leaders are being challenged to make dramatic improvements in the ways they manage their responsibilities and achieve desired outcomes. Politicians and government officials focus on setting new policies, providing stimulus, and allocating resources. Business leaders across the spectrum of industries and markets try to de­velop and implement the most effective programs to maximize benefits and outcomes and minimize the risks and vulnerabilities.

Today, strategic leaders and senior manage­ment of all persuasions have to expand their capabilities and knowledge and adopt innovative management approaches that are in line with the realities of the world. As evidenced by the current economic crisis with its myriad of causes, effects, impacts, and consequences, the underpinnings and key elements ofthe global economy are too compli­cated and intertwined for “old school” approaches to succeed. A major untangling of the turbulence and new understandings of the global economy are necessary for creating the requisite solutions. C. K. Prahalad (2005) in his book, The Fortune at the Bottom of the Pyramid, talked about how to handle the global challenges: “What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged, and at the same time, the companies providing products and service to them that are profitable” (pp3-4). With all of the uncertainty, there are incredible opportunities for companies to succeed. The great challenge for strategic leaders is not just to “right the mistakes” of the past or cut through the turbulence, but to invent a more sustainable future by creating won­derful new solutions for people everywhere and by eliminating the problems and the underlying risks and difficulties. Strategic leaders have to recognize that they are responsible for assuring that the best solutions possible are devised and implemented.

Unfortunately, most of today’s management models are not in synch with the new realities of globalization and the twenty-first century business world. The world has changed significantly over the past two decades, yet many strategic leaders still follow the theories and practices that were developed during the 1980s and 1990s. While such management constructs were innovative methods during the later years ofthe twentieth century, they are based on the realities of the times. Most ofthe models viewed the business world in the context of the developed countries and Western business philosophies. They were underpinned by many assumptions that were relevant for the major mar­kets like those in the US, UK, Germany, France, Japan, etc. The underlying perspectives were based on political stability, economic freedom, open exchanges, linear increases in market demand, affluent populations with significant disposable income, and well-established infrastructures. To­day, many of those assumptions and perspectives are questionable, especially on a global basis. The economic, social and environmental conditions and trends are now less predictable and more volatile. Many factors and phenomena play out on a global scale. The global economy with its numerous interconnections and interrelationships brings with it many risks and uncertainties. With all of the improvements in management science, managing global corporations is still an extremely risky venture.

Globalization requires global corporations to recognize new responsibilities, if they plan to create value and enjoy success. Paul Hawken (2007) in Blessed Unrest discusses the challenges of globalization (p135):

One of the failures of the arguments opposing market globalization is the visible lack of an alternative economic model that might address the plight of the world’s poor. The failure of those making the case for globalized free trade is their inability to adequately address the results of rapid economic change in human and ecological degra­dation, roughly in equal measure, incomparable through they may seem.

Hawken clearly points out the problems with the prevailing business situation. The present form of globalization is not inclusive. It does not provide the necessary support for the poor of the world nor does it include a scope wide enough to assure that solutions are complete.