Globalization has led to stiff competition in the market and every firm is striving to gain a substantial share of the market. Therefore, the firms continue to implement strategies that will add to their competitive advantage. These strategies are either short-term or long-term and most firms have stuck to their conventional forms such as cost leadership, product differentiation, and acquisitions among others. Due to the lack of practical aspects in these strategies, managers are looking for those strategies that are more pragmatic to meet the new challenges that are brought about by globalization. In the article understudy, Fast Company magazine wrote plenty of reasons as to why good to great companies achieved such status in the market.
Collins reports that the responses of many organizations to the changing market environment especially through organizational change are nothing but myths (1). The reason is that the firms have become reactive rather than proactive in strategy formulation. Collins’s report recognizes that firms that initiate change through proactive strategies do succeed in competing effectively in the global market. That is, firms that make an extensive market analysis in advance as well as making changes fast, are most likely to perform better under the changing market conditions. Indeed, as other reports indicate, many firms are taking proactive measures to overcome the challenges posed by globalization (Osawa 1; Clark 1).
Implications for practice
The overall dilemma created by globalization is about organizations lacking the necessary focus when formulating strategies. It appears that many firms are clinging to the conventional, theoretical opinions regarding strategies and hence missing the important considerations that are also relevant to the current market. Taking proactive measures suggested by Collins is the responsibility of the management. The management should try to create an organizational culture where the employees are self-motivated. The management is also responsible for the organizational change that embraces the integration suggested in the Fast Company magazine.
Through these initiatives, the organization will enhance its performance in the challenging market environment. The employees will also find the work environment to be conducive and rewarding. Moreover, the change will improve the responses the organization makes towards the changing consumers’ needs leading to the benefit of the customers in the market. Unfortunately, a firm that takes proactive measures will snatch some market share from latecomers. Therefore, the firms that lack the competencies and capabilities especially SME enterprises to implement strategies quickly are at the losers.
Implications for theory
According to the article, some companies believe that employees should always be motivated through attractive incentives for a firm to perform effectively in the market. Collins however insists that people are never motivated to be effective (1). Self-motivation ensures that every employee works hard towards the overall goodness of the company, without considering his or her gain. However, Wild, Han, and Wild acknowledge the importance of compensation in motivating employees and also suggest other important aspects of ensuring an effective workforce (chap. 16). Human resource management in the global context should consider factors such as cultural diversity and demographic factors when formulating effective strategies to motivate employees.
Another suggestion is that several management teams in companies practice the aspect of imposing fear on their subordinates, hoping that they will respond and deliver as expected. In contrast, this aspect has not featured anywhere in good to great companies (Collins 1). Furthermore, Wild, Han, and Wild advocate for the creation of an organizational culture where employees are involved and allowed to participate in decision-making to succeed in the present market environment (chap. 2). Therefore, instilling fear would likely cause a high rate of employee turnover as many employees would prefer to shift to other companies.
Although credit is given to technology as the major factor that heavily contributes to organizational performance, Collins insists that technology will have an impact on the firm’s performance when it initiates an organizational change that responds to the real challenges (1).
A change in a firm ensures that there is an outstanding relationship between the firm’s systems and its operational activities. Wild, Han, and Wild argue that technology is the most remarkable facilitator of societal and commercial changes today (chap. 1). They insist on technology and especially information technology as being part and parcel of an organizational change. Firms determined to succeed in the current market should as well think of the models supported by IT such as e-business, virtual markets, logistic systems, and outsourcing activities.
The current global environment requires management teams to drop the conventional way of thinking when formulating strategies. This is because globalization is characterized by completely different aspects and phenomena that demand more than just good positioning in the market. So, firms should pursue the complex opportunities brought about by globalization through the use of practical plans such as employment of e-business models and outsourcing activities which make meaning in the contemporary market environment. Employees on the other hand should seek to develop an intimate relationship with the firm to allow for their value creation. Customers should also understand the challenges imposed on firms regarding their changing needs and seek a solid business relationship with the firms.
Clark, Don. FTC Proposes Changes to Western Digital Deal. Wall Street Journal. 2012. Web.
Collins, Jim. Fast Company “Good to Great”. Fast Company Magazine, 2001. Web.
Osawa Juro. Hitachi to Shut its Last TV Factory. Wall Street Journal. 2012. Web.
Wild, John, Han Jerry and Wild Kenneth. International Business: Global Edition. New York, NY: Pearson Education Limited, 2011. Print.