Let’s say you are a senior decision maker in a large computer design, manufacturing and sales company. How do the “three convergences” affect you?

Business Policy and Strategy

In order to carry out this assignment, students must carefully read Thomas Friedman’s book, The World Is Flat.

Introduction

To a large extent, a significant component of business policy is strategic management. Many business policy textbooks used in business schools are actually strategic management texts.

At UMT, we believe that business policy is larger than strategic management. We hold that business policy has two distinctive features: First, it entails integrating a wide range of business knowledge – finance, operations, marketing/sales, IT, HR, and legal. Second, it looks at decision making from the very highest levels of an enterprise. A little reflection shows that these two features are interrelated: For decision makers at the top of an organization to make good decisions, they need to be able to integrate a vast array of knowledge.

Still, strategic management as a discipline is important in business policy. With strategic management, senior decision makers must take steps to assume a long-term view of their enterprises and the environment in which they operate. In order to do this effectively, they must establish a vision of where the organization should be headed. This vision should enable top management to formulate high level corporate objectives, and these in turn provide targets toward which specific strategies are directed.

In his book, The World is Flat, Thomas Friedman takes a strategic view of where the world is headed. He states that we have entered into a “flat” world, where all the rules are changing – social, political, economic, and business. A significant feature of the flat world is the absence of hierarchies. To a large extent, flattening is being driven by technological advances, particularly in the areas of computers and telecommunications. But it also reflects dramatic social changes – for example, in today’s flat world, knowledge is increasingly free. Finally, flattening is being accelerated by political changes – for example, with the collapse of the Soviet bloc, the outlook and energies of former socialist countries have become decidedly capitalist and have led to the ascendance of hitherto unproductive economies, e.g., in China, India, and Russia.

 

Friedman examines “ten forces that flattened the world,” reorganizes them as “three convergences,” and defines “nine rules” that well-managed companies follow in the flattened world.

 Questions

1. Let’s say you are a senior decision maker in a large computer design, manufacturing and sales company. How do the “three convergences” affect you? (1-2 page response, single space)
2. Let’s say you are the head of a management consulting company with headquarters in the Midwest. You have 200 employees. About half of your consulting focuses on pure management issues (e.g., business process reengineering, designing financial systems) while half focuses on more technical matters (e.g., product design, network configurations). Your core business occurs in the Midwest region, while 25% lies outside the Midwest in other parts of the USA. From time to time, you work with international clients.

Use Friedman’s Nine Rules to describe the direction your company should follow. Illustrate your points with specific examples (2-4 pages, single space) [If you are reading Friedman’s older 2005 edition, it is okay to discuss the Seven Rules instead.]

3. Friedman is constantly referring to Hewlett-Packard as an exemplar of a large, high tech company that has been doing things right to survive and thrive in a flattened world. On several occasions, he focuses on HP’s CEO, Carly Fiorina and describes her as the ideal CEO in a flattened world. Yet even as Friedman’s book was going to press, HP’s performance plunged, leading, ultimately, to the Board of Directors firing Fiorina. By the outset of 2006, HP’s performance shot up again (under new management). What does this tell you about what it takes to manage a large company at the highest levels? Was Friedman wrong in his assessment of Fiorina’s capabilities? Did events simply overwhelm Fiorina, so that we have a good manager being forced to fall on her sword? Does Friedman’s glorification of Fiorina suggest that his theories are just that – theories; and that they can’t really predict what businesses will succeed and which will fail? Do you have any other views of what’s happening here? (2-4 pages, single space)