Strategic Thinking in Today\'s Global

Strategic Thinking

In today's global business environment, strategy and change necessarily go hand in hand. It is impossible to operate in a business environment without taking into account the dynamics of change. This is particularly true when expanding and operating in the international and indeed the online arena. In the information age, strategic thinking has of necessity adjusted to the rapid changes in today's technology. New ways of communicating and connecting with millions of people on a global scale are developed and demise with bewildering speed. The business person therefore has to take into account the dynamic of change to optimize strategic thinking. To aid in this, scientists such as Benoit Mandelbrot and authors such as Thomas L. Friedman are helpful. In other words, the strategic thinker can use unusual thinking processes in terms of fractals and business in order to diagnose the change process, formulate and implement strategies, and implement strategic learning processes as a result.

I. MANDELBROT SETS

Benoit Mandelbrot was somewhat unusual in his scientific thinking processes by adding a fourth dimension to the existing three. While the first, second and third dimensions concern geometric forms, according to Mandelbrot, the fourth dimension is the reality in which we find ourselves. This reality appears chaotic, as patterns may seem similar in terms of geometric shape, but never in fact repeat themselves like geometric forms do. According to this view, change is a constant part of the physical reality in which we live. Everything is in a constant state of change, and hence an infinite set of different patterns emerge (Matthews, 2008)

The key of this theory and also the key in terms of strategic thinking, is that the change is not as random as it may initially seem (School of Wisdom, 2008). There are discernable patterns, although these are not quite the same each time, and furthermore, this change is based upon feedback. Indeed, all change in reality is based upon improvement resulting from feedback. This can be seen not only in the visual world of patters, but also in the world of work and business. A teacher may for example disseminate the same body of work over 20 years of a professional career. What she does in her classes during year 20 is likely to be vastly different from what she did in year 1. However, the two types of teaching are hardly unrelated, and is the result of two decades of constant but almost imperceptible change. The change only becomes apparent once classes from years apart are compared. Every year however, the teacher improves according to feedback from students, from her own experience, and from research. As teaching information accumulated and improved over the years, so did the teaching.

One might see this as a process of growth. The teaching grows and improves over the years, just like human beings do. In reality and in nature, all life operates upon the same principle, an so should strategic thinking and implementation. Like teaching, businesses grow, change gradually, and improve according to feedback from customers and research into the changes of business philosophy over the years. This is particularly a fact of the Information Age. As information technology improves, so should business diagnosis, strategy and strategic learning.

In the globally competitive environment, for example, the business owner can scrutinize competing companies and their strategies, as well as how they improved these over the years to gain a sharper competitive edge. The science of fractals hold that these would change slightly when regarded in a linear way. When greater time gaps are inserted, the changes become more apparent, although it is still clear how improvements are based upon feedback.

In diagnosing change, therefore, the business owner should operate from the paradigm that change is constant, and that it means growth. No company can remain exactly the same and use the same strategies throughout the years. This is so because the human beings using goods and services also change and grow. To maintain its competitive advantage, a company should therefore scrutinize its customer base for possible changes in what they regard as important and what their perceived needs are. When diagnosing such change, the company is then in a position to meet the needs of the customer.

A second diagnosing process can also focus upon other companies. As mentioned above, a company can investigate competing companies in the market for input on their avenues of change. This can also provide valuable clues in maintaining a favorable relationship between the company and its customers. In considering how other companies change over the years, the diagnosis can also help the company to speed up its own change and growth process. This strategy helps to improve the industry as a whole, in addition to each individual company involved. The world's development integrates in this way, with business development being only one of millions of examples of a Mandelbrot set, where change rather than stagnation is the constant (School of Wisdom, 2008).

When change has been diagnosed, a company can then use this for the improvement of its business operations. Diagnosing change is one of the ways in which to reveal shortcomings in the business operations. As such, the company can use the information as feedback according to which strategic change can be implemented. In this way, an understanding of change is cultivated and accumulated in order to transform this into effective business strategies.

In the global marketplace for example, the Chinese market trend may be towards a greater consumption of chocolate rather than strawberry milk. The supplying company can then use this information to supply greater quantities of the former and smaller quantities of the latter. This is only a slight change from the original business operation, but nonetheless makes a significant difference to the profit margin of the company.

Furthermore, fractal sets mean change in small amounts rather than large leaps. This strategy allows the company to grow gradually with its customer base, while meeting each need as it manifests itself. In this way, the dynamic between the customer base, the business, and the communication between these two sections are extremely important considerations. As an example, customers may for example require a greater quantity of cool soft drinks during the summer and more hot drinks during winter. Strategic thinking about change will allow the company to make the necessary changes, while improving its range of products as the years accumulate. Surveys and questionnaires are an important element in communication with customers. These can help the company to diagnose the need for change and work on implementation strategies.

Adhering to the fractal law of change places the company in a position of importance in terms of its connection with the workings of the universe. It can be said that everything lives and grows. The end of growth means the end of change, and also of life. The business wishing to remain in operation for as long as possible will implement strategic thinking in order to effect the changes needed for the survival of the company.

In strategic thinking then, change means growth, while growth means life. The company in today's business world can no longer operate in isolation or even from a position that is superior to those of others. Instead, the business that survives the longest is the one with an understanding of the universe as a place in a constant state of change.

The business should therefore also be required to change and improve constantly.

Change from a fractal set viewpoint is then seen in two dimensions; it is both constant and it occurs gradually as the business and its customer base grows. In order to successfully identify and diagnose change, the business is required to not only consider its own strategies for appropriate change, but also the changes occurring in its environment. In considering the manifestations of change, it is also important for a company to understand that change occurs on a global scale. The world is becoming increasingly connected and there are few significantly-sized businesses that do not have some connection with the rest of the world. This paradigm is what inspired Thomas L. Friedman to claim that the "world is flat."

II. The WORLD IS FLAT

In his book, the World Is Flat: A Brief History of the 21st Century, Friedman addresses the evolution of the economy, and how information technology has created for the world a type of "flatness." Of course, the "flat" is a metaphor to describe the sensation of finding so much of the United States in India, that it created the atmosphere of home.

Friedman describes a trip to Bangalore, India and compares it with Columbus and his journey of discovery. Having come upon the United States and believing it to be India, declared the world to be round, because he found "Indians" there. In his metaphor, Friedman exclaims to his wife that he believes the world to be "flat," because of the many American manifestations that he found in India. On a deeper level than mere appearance, Friedman addresses an economic world in which the "playing field" has been leveled (Leamer, 2006). Globally, communication technology has made it possible for businesses to expand much faster and more easily than was the case before. Cultural research is much easier by means of the Internet and electronic communication. Expansion and research into market requirements are similarly facilitated and much cheaper than the case was before. These are but a few of the ways in which the world has become a "flatter" place for both American and global businesses.

The same phenomenon can be seen worldwide: foreign and domestic businesses abound equally within the same country. The most significant elements that Friedman uses in his book to explicate his "flat world" theory include the processes that flatten the world, and the elements of convergence.

According to the author, there are ten "flatteners." These ten events, discoveries, or elements have contributed to globalization in that they allowed both industrial and emerging markets to participate in current economy, and to profit from it. The first event is the collapse of the Berlin Wall. This event allowed a sector of German society that had been hidden from the global view to finally enter the mainstream economy. This event stands at the bottom of technological advances such as the implementation of Netscape, workflow software, and open sourcing.

Open sourcing refers to the collaboration of communities on online projects. Source software, blogs, and Wikipedia serve as examples of such community projects. The widespread use of the Internet has made it possible for all persons to upload information to the Internet and to contribute to the global knowledge base.

Outsourcing and Offshoring occur on the economic level of global business. These mean that businesses can now outsource their operations in ways that minimize production costs and increase profit margins. Foreign exchange rates can be used profitably in this way and create mutual benefits for the company and the countries being targeted for outsourcing and offshoring.

The global online environment has also allowed the evolution of the supply chain. Friedman names Wal-Mart as them most significant example of successful global supply chaining, with the flow between goods, services, and customers operating smoothly, like a river.

Insourcing is another flattener, that refers to a company performing services beyond its own on behalf of another company. In this, Friedman names UPS as an example in terms of the repair work they perform on behalf of Toshiba.

The ninth element, in-forming, is closely related to the open sourcing element, in that individuals are able to retrieve a vast amount of information by means of online search engines. Friedman mentions the rapid growth of the Google search engine, whose volume of searches has increased vastly over just three years. Finally, what Friedman refers to as "Steroids" include electronic equipment used in addition to computers, such as mobile phones, iPods and digital assistants, which allow people to remain in constant contact with others, as well as allowing a constant connection to the online environment. The decreasing prices of these devices also allow an increasing number of people to be so connected and to make use of the business opportunities offered in this way.

In addition to the ten flatteners, Freidman identifies the "triple convergence"; three elements that work together with the ten elements mentioned above in order to flatten the world. The first is the integration of various functions such as e-mail, faxing and printing into a single machine. This provided for a cheaper way to perform all the business functions needed within a company. The second element was a new business model that operated in terms of horizontal rather than vertical collaboration. The capability of the technologies involved help businesses to converge horizontally, with all levels of business people both learning and teaching each other, as well as making use of more opportunities than had ever been available before. The third element is the fall of the Berlin Wall that allowed countries such as India, China and Russia to open their economies to the world. This enhanced horizontal collaboration across the world and further leveled the playing field of the global economy.

For the business person, the flattening of the world holds both significant opportunities and challenges. In diagnosing change, for example, it is important to understand that the competitive edge has become increasingly difficult to find and maintain because of the vast brain power added to the global business environment. The business person can therefore no longer operate in isolation. The element of horizontal collaboration is important here. When strategically diagnosing the change process, the business person should investigate opportunities for horizontal collaboration. Similar global businesses can for example be investigated for this purpose. Elements such as products, services, and business philosophy can be used for the strategic decision-making process. The online environment facilitates this process and provides the opportunity to find the perfect collaboration opportunity.