Global strategic management in a new world order

Business Horizons, Nov-Dec, 1993 by William E. Halal

The globalization of business has become so rapid that a new field called "Global Strategic Management" has now emerged. This new field is a blend of strategic management and international business that develops worldwide strategies for global corporations. Whereas most studies in this field focus on ordinary business conditions, the revolutionary events of the past few years make it clear that the present is not ordinary. Such epoch-shattering events as the collapse of communism, the unification of Europe, the information revolution, the arrival of an environmental ethic, and other remarkable new developments signal that a new era is emerging in global affairs. This article describes a broader approach to global strategic management that encompasses these revolutionary changes.

The viewpoint presented here was developed in a project sponsored by the World Future Society called "WORLD 2000." WORLD 2000 focuses on conducting a global strategic management process among business, government, education, and other sectors of society to define the emerging global system and help institutions adapt to changes. It represents a fresh examination of the forces that are integrating the earth into a coherent global order as well as those that are creating the disorder that tends to characterize our time: the unification of markets and communications, as well as the vast differences in cultures, local problems, and values erupting around the globe. By gaining new insights into the emerging world system, social institutions may better understand how they can adapt to these changes.

This seems to be an opportune time for such an examination. The transition to a new global system is likely to be made during the next decade; the year 2000 offers a highly symbolic turning point at which the emerging global order can be shaped and molded.

Following is a global strategic plan, developed by synthesizing the literature and then reviewing the plan with groups of executives. It follows the logic of a typical strategic plan but carried to a global level. First, we summarize nine supertrends that describe a long-term trajectory toward an advanced stage of "global maturity." Second, we note five principal obstacles that must be overcome to clear the way ahead. Third, we argue that these issues can be resolved by a newly emerging perspective that recognizes the essential unity of a global community.

THE TRAJECTORY TO GLOBAL MATURITY

The following trends represent the principal driving forces that are now moving the world in new directions. They could be called "supertrends." Little attempt is made to offer justifications, and many other trends that capture finer details are not covered. This summarizes the major features that characterize the emerging shape of the globe as it moves along a long-term trajectory toward a new stage of global maturity.

Trend 1: A Stable Population of 10-14 Billion

The earth, which already is teeming with 5.5 billion people, is expected to double its population to reach a stable level somewhere between 10-14 billion humans by the mid-21st century. About 95 percent of this growth will occur in the less developed countries (LDCs).

Trend 2: Industrial Output Will Increase by a Factor of 5-10

The aggregate level of material consumption, or industrial output, should increase by a factor of 5-10 over the next few decades as most remaining parts of the world industrialize to reach the equivalent standard of living enjoyed by Americans, Europeans, and Japanese. Industrial throughout, however, is likely to grow less as more efficient means are found to insure a sustainable form of development.

Trend 3: The Wiring of the Globe

Information technology (IT) is a revolutionary force that will continue to overthrow governments, restructure corporations, and unify the world. This revolution will wire the earth into a single communication network, a central nervous system for a planetary society. However, the gap between information haves and have-nots is apt to persist.

Trend 4: The High-Tech Revolution

The IT revolution is accelerating technical advances to create breakthroughs in all fields: the mapping of DNA, genetic therapy, robotics, materials research, sustainable "green technology," automated transportation, and even a "technology of consciousness."

Trend 5: Global Integration

The globe is becoming integrated into a single community connected by a common communication system, a global economy, and a shared international culture. In time, this process may unify today's growing economic blocs and political federations into a universal system of open trade, a global banking system and common currency, and some form of world governance.

Trend 6: Diversity and Complexity

It is a great paradox that global integration will be accompanied by disintegration into a highly diverse system. Ethnic enclaves, such as those in the former republics of the USSR, will continue to seek autonomy; various groups within nations will form pockets of self-governing subcultures; and modern societies generally will splinter into a far more complex, differentiated social order.