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21st Century Companies
Peter Cochrane & Mike Lyons

The accelerating development of technology is placing increasing strains on the old vertically integrated industries. Those unwilling to change are now experiencing difficulty in operating, competing and surviving. To be successful in the next century, companies will have to drastically alter their structure and mode of operation.

The world is undergoing a major globalisation with a restructuring of the Fordist production process across national boundaries. Realising an integrated structure will require telecommunications systems to provide the 'glue' essential for global co-ordination. As a result, companies are coming under increasing pressure to rethink their operations in order to position themselves in the new competitive era. This means a faster on demand delivery of better products of increasing sophistication at lower cost.

Common features of the evolving industries are:

  • Shorter product cycles - a faster response to market and technological change.
  • Increasing development costs for new products
  • Taking carrying greater risks, but the potential for greater rewards.

As the competitive environment reduces reaction times, faster decision making is essential, requiring the intelligent processing of more data. This has to be underpinned by advances in IT within the legislative and policy frameworks which may allow or restrict such advantage. Telecommunications is thus critical for all sectors of the global economy.

Technology
With the convergence of IT, entertainment and telecommunications a new world of opportunities is emerging, including:

  • Telepresence displacing travel
  • Increasing telecommunications mobility
  • Natural language recognition and machine speech input/output plus conversation
  • Automatic language translation
  • Humanised interfaces to machines - everyone will become computer literate
  • Integrated terminals for work and pleasure - hi-fi, TV, VR, PC, mobile IT
  • The super computer on your desk - by 2010 the PC will be up to one million times more powerful than that of today
  • Computers you wear - communication and computing on the move
  • Intelligent office with data sorting, visualisation, filtering, decision support, search - find - classify - anticipate - war games/simulation support
  • Mobile Medicare - real time monitoring of your health metrics - is your job, office, work, company killing you?

Value Networks
The emergence of an integrated global economy will play havoc with old markets. Existing value chains will become less static and disordered value networks will take their place. These will be dynamic, with many complex features, such as cross or floating links, reflecting the evolving market structure. These will be made even more complex through greater cultural mixing of business and management styles and the need for new forms of taxation for global companies.

Telecommunications will play an essential role in enabling companies to respond effectively in a dynamic, real-time economy in which the unifying managerial resource is information. The vertically integrated company, characteristic of older industries, will become less viable. One process leading to the demise of older structures is the inability to retain strategic information as the convergence of industries necessitates increasing collaboration. We already see companies collaborating in one sector whilst competing (with different partners) in another.

Virtual Organisations
The new companies will be product and service-based with different organisations contributing complementary skills. Unified companies may disappear and become primarily contracting organisations with manufacturing, R&D, and marketing run as separate profit centres, offering services competitively to parent or rival companies. Departments brought together to produce a specific product form a 'virtual company' linked, not by geographic proximity, but by Intranets which permits the low cost transfer of ideas and knowledge. This mode of working is already evident in the lead sectors today.

As the virtual company becomes more common, specialised companies may dominate. Those employing a small core of workers may wield tremendous financial power in the design, planning and manufacturing capacity of the planet. This could be particularly important as the 'means of production' shifts from the owner of production tools to the owner of the knowledge to control those tools - the information worker.

One of the stages towards this more integrative but distributed global operation is the transition to flatter and more fluid organisations with multi-directional information flows. Such structures may only be temporary as the market becomes more chaotic (in the mathematical sense); it is unclear what types of organisational structure will be viable under such extreme conditions. It is also unclear what regulatory and legislative frameworks will best suit the requirements of this global economy.

Impact
The impact of these radical changes is profound. As global competitiveness stimulates the atomisation of companies and institutions, it counteracts the cohesive processes such as co-operation between companies and nations. It therefore places an increasing emphasis on business ethics. Where businesses fail to meet these needs, they will be faced with increased environmental regulation and governmental control.

Such cohesion can be enhanced through:

  • More rational/ democratic self regulation of companies
  • Communication referenda, televoting, etc.

This globally competitive environment, reliant on inter-working networks, will depend critically on co-operation between competitors. New ground-rules for operation in the marketplace will evolve, perhaps exhibiting many radical changes. However, there are certain attributes which successful players will have to develop:

  • Engineering of competitive edge through applied creativity
  • Ability to assess and take advantage of opportunities and risks

These changes will impact on the lives of individuals who will no longer expect or be provided with jobs for life as companies make increasing use of contractors. The future working environment will demand people prepared to continue learning and developing throughout their lives. Individuals will have to develop their own strategies for coping with this demanding environment in which multi-tasking will become common-place. Many may become simultaneous employers and employees.

Conclusion
The world is going through a deep-seated transition impacting on all aspects of society. The major characteristic are a compression of time and distance coupled with the removal of delays through telecommunications and IT. Whilst the scale is principally evident on the open market, it is clear that all systems in society are having to adapt at great speed. However the changes will allow a new post-industrial society to emerge, but only if the opportunities offered by the widest spectrum of available IT are exploited effectively.

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