MANAGING in the

NEW WORLD

Business and Society

In the “winner takes all” mindset of the digital age, inequalities are on the rise. These are leveraged by populist politicians but cannot be denied. While technology has been a major growth driver, and increased prosperity, it has also created massive inequalities. There is now an ever-widening gap between the elites and the others. The Gini Coefficient for example is widening especially in places such as France, UK and USA, but also in emerging markets such as India, China and Indonesia. The corporate focus on maximizing shareholder value led to mass increase in income levels, but also with growth rates falling and global trade on a slump, there is a need to rejig strategies. Automation is fueling fears of job losses. There is now a need for a new kind of business leader. The CEO of today needs to be more inclusive in approach. This will help shape the new globalization wave. New technologies such as blockchain need be embraced. Entrepreneurial business growth needs to be provided a fillip. Sensors, software and business analytics are realigning value creation away from standalone products to suites of them. Substantial investment needs to be made in management training of existing employees. Rewards need be realigned towards more holistic goals. Finally, a social business mindset needs to be brought in.

Source:https://www.bcg.com/publications/2017/strategy-agenda-for-future-global-business.aspx?linkId=52367373

Uploaded Date:10 July 2018

There is a constant conflict in business on whether to purely maximize shareholder returns or to also cater to the other stakeholders such as society and the environment. Some approaches have been identified which can help balance the two ends- social welfare and profit maximization. These approaches can broadly be classified under three heads. The first is primarily targeted towards profit maximization, while the second looks at social welfare, and a third tries to balance out the two. Profit maximization in itself may get tweaked as enlightened or constrained. Social welfare too could be simple, constrained or enlightened. The approach depends on the company’s corporate strategy to decide which path it will veer towards. The middle path is most common which involves a weighted combination of goals. Sometimes a hierarchy is also created to rank the objectives. Another approach is the complementary one, with exact equal eight assigned to each of the two maxims.

Source:https://knowledge.insead.edu/responsibility/balancing-profit-and-social-welfare-ten-ways-to-do-it-9421

Uploaded Date:04 July 2018

There is substantial talk now about the concept of Greenwashing where environmentally conscious efforts are destabilizing for-profit businesses. There is the fear of overdoing it. Yet that may not be true as several formerly ruthless businesses have now buckled down and looking to fruitfully engage with the community on social and environmental causes. The list includes the likes of BlackRock, Shell and Vanguard. In order to strike the right balance, and ensure maximum rewards for different stakeholders, companies need to properly define and map social responsibility. Proper reporting tools need to be used so that tangible evidence can be provided. The social responsibility must emanate from the very top, but not as an isolated case. It must be included in the corporate strategy itself so that it finds alignment with the business goals. The social responsibility goals must then be clearly communicated to the staff. A phased divestment helps. Follow up must be done by the company board.

Source:https://knowledge.insead.edu/blog/insead-blog/big-investors-call-for-company-attention-to-social-purpose-what-next-8451

Uploaded Date:16 March 2018

Every few generations major changes take place which shake the very foundation of the existing societies. We are going through one such period, though not it is even more strongly pronounced, thus called mega-change. Newer business models are manifesting themselves regularly while incumbents in different industries are losing ground. There are likewise societal changes accompanying the work pattern evolutions. There is growing anxiety in the developed markets regarding potential job losses due to automation. There have also been geo-political changes and related ramification across the globe from Russia to Venezuela and from Syria to France. A lot of countries have been slow to react to these changes and related business innovations. There is a dire need to bring the world together as happened in 1945, but it needs factors which will be very different from the Marshall Plan which was then implemented to rebuild post-war Europe.

Source:http://knowledge.wharton.upenn.edu/article/161018b-kwr-westbook/

Uploaded Date:03 March 2018

The Big Four of Silicon Valley’s tech industry- Apple, Amazon, Facebook and Google- are responsible for some of the breakthrough innovations over the last decade, and at present are financially rich beyond the norms at any other era. Their investments have helped other companies come out of the recession, have helped spawn new online or mobile based businesses, helped propel the field of digital marketing, and are now major recruiters from college campuses. Yet, the time has come to break them up, as they have now become too big, so detrimental to the overall economy. Their net worth is now well over the combined levels of legacy companies in several other major industries. Yet, they are not paying the kind of taxes, or generating employment that they are easily capable of. Quite to the contrary, these companies’ huge data warehousing machineries enable that they now know all dark secrets for a huge proportion of the population. They have also caused massive inequality and are now striving hard to develop automations, that will render a large proportion of people unemployed and skills irrelevant. Their deep involvement in government projects gives them further access to sensitive public data. While Google or its renamed avatar Alphabet is a mind-altering platform, Facebook targets the heart. In spite of the great progress the American middle-class made between 1941 and 2011, now the real wages for all classes in the US is declining. Markets too are failing, while monopolies are emerging in every known sphere.

Source:http://www.esquire.com/news-politics/a15895746/bust-big-tech-silicon-valley/

Uploaded Date:01 March 2018

The old adage “the trend is your friend” holds true today, more than ever before. This is due to shifting growth, rise in social tensions and accelerated disruption. Companies that are leveraging these tailwinds of change, are the ones most likely to progress at far faster rates than those on the more normal of curves. More people are physically healthy, literate and entering the middle class, but the post-Cold War global order has been disturbed. There now exist some major global forces and their subsequent interactions. Spaces where concentrated forces run through may be termed as the crucibles. One is the shift in global growth to markets such as the BRIC countries- Brazil, Russia, India and China- or those of Southeast Asia and Africa. Accelerating industry disruption has led to Alibaba founder Jack Ma renaming the B2C segment as C2B. This implies that businesses these days take decisions based on customer insights gleaned from the huge deposits of data warehousing done by organizations. There is also a new societal deal where cybercrimes are increasing so collaborations between businesses and governments need to be smoother. Globalization seems to have taken a hit with the Brexit decision and the US exit from the TPP. Cross-border data flows though are on the rise. Economic power has further alleviated China’s political power with the establishment of the OBOR initiative. The advances in business analytics, Internet of Things and automation have halted the obsession with greater material cravings. Resource production and its utilization is now being diversified and driven by these new technologies.

Source:https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-global-forces-inspiring-a-new-narrative-of-progress?cid=other-eml-ttn-mkq-mck-oth-1712

Uploaded Date:01 March 2018

The pro-Brexit vote and the results in the US elections of 2016 signalled a dark time in the history of human collaboration and globalization. This follows less than a decade after the financial crisis that emerged in the US followed by a massive debt and banking crisis in Europe. In the US and UK, society itself seemed split in 2016 during these two landmark votes. Five major shifts have been observed about the world now. One is a rise in income inequality. To put things into context, as per business intelligence provided by an Oxfam report, just eight people now own as much wealth as more than three-and-a-half billion other people do. The second major shift has been technology causing change in the nature and availability of jobs. A third is rising protectionism in business all over the world, especially among the traditional economic giants in the west. Recent election results in France, the Netherlands and significantly in Germany show that in spite of efforts by right-wing parties, majority of the people voted in favour of globalization and liberal principles. There is also the growing concern of immigration especially of refugees from war-torn countries such as Syria, Afghanistan and Iraq. Their integration into mainstream societies in their new homes will be a major challenge. A final concern is the growing role of digital marketing through social media outlets in influencing people’s thoughts.

Source:http://knowledge.wharton.upenn.edu/article/what-are-the-top-five-challenges-for-international-organizations/

Uploaded Date:19 January 2018

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