Chapter+11+TWIF

Type in the content of your page here. Chapter 11 How Companies Cope Summary Larry Manning In this chapter, Thomas L. Friedman explains how companies are able to survive in this changing, flat world that has been created by the onset of the Computer Age. He identifies nine rules that companies live by today to be competitive in the global marketplace. The following is a brief description of each: Rule #1: When the world is flat, whatever can be done will be done. The only question is whether it will be done by you or to you. Friedman proposes that "if you have an idea you should pursue it. Because someone else will have a similar idea, and pursue it, faster than you think"(442). Rule#2 claims that the most important competition today is between you and your own imagination. This is because you can do so much more on your own today with the technology available to us. We need to be able to imagine and to do whatever can be done. Friedman is still optimistic about America's potential in a flat world because "America's free, open, imagine-anything-you-want, flexible economy and society are still very much alive out there" (448). In Rule#3, Friedman gives an example of a Middle East delivery service that was able to implement what their founder, Fadi Ghandour, imagined that his company would be able to do. They were able to go from a small regional system into a major, $200-million-dollar-a-year company. Rule#4 implores that big companies must act small because in a flat world," consumers started to feel that they could have more control, and the more they adapted their buying habits to the Internet, the more companies... had to adapt and offer the tools to be in control" (456). Rule#5 says that businesses must" collaborate with the smartest, most efficient people you can find any where in the world" (461). He refers to this as value creation. Friedman uses the example of how Rolls Royce grew from a stodgy British-based automaker into a global operation that doesn't even make cars anymore. This was possible because they were able to improvise and adapt. Rule#6 has companies doing self-assessments that he refers to as "chest x-rays... to constantly identify and strengthen their niches and outsource the stuff that is not very differentiating" (461). They must then be able to sell the results to their clients. Rule#7 states that the best companies today outsource to win, not to shrink. They don't just send work overseas to save money, but as a means of having their business perform more efficiently. Friedman proposes that outsourcing should be to "acquire knowledge talent to grow their business faster, not simply to cut costs and cut back" (465). Rule#8 Companies today must be able to "differentiate from others by "how" they do business" (468). Trust is a big thing between business partners. "And in the flat world, your company's ability to inspire trust is everything" (469). Rule#9: "When the world goes flat- and you are feeling flattened- reach for the shovel and dig inside yourself. Don't try to build walls" (469). Friedman explains how" commodization... is happening faster and faster across a whole range of industries. As more and more analog processes become digital,virtual, mobile, and personal, more and more jobs and functions are being standardized, digitized, and made both easy to manipulate and available to more players" (473). He again stresses the need for companies to use more imagination, to be more creative, and to use artistic flair. These skills are necessary to separate from the field.

Analysis - Christopher Perlin

What companies once thought were secrets of success are now only minute features of what today makes a truly universal company. For many years, companies competed against a similar company no more than a couple miles away. Those companies survived based on price and service. However, now more than ever, companies must compete with how they do business overall. Science and technology have proven to bring about a business that at one time no one though was possible. Our world has become more complex, and what one company originally got into business for is not the only thing they must now be proficient at. With the revolutionize communication network companies fight for their lives to compete not only locally, but globally as well. Companies, both large and small must find ways to compete globally. This chapter has made an effort to highlight how companies cope with the idea that our world is becoming increasingly flat. I will attempt to share an analysis of Thomas L. Friedman’s work. “Just in the last couple of years”, was a quote Thomas Friedman heard more often than not. Through his travels he found that everyone wants growth, but no one wants to change. Thomas Friedman took it upon himself to visit different places around the world in hopes of finding out how the flattening of the world was affecting companies. His findings were rational and made much sense. However to most people I believe people could easily overlook the characteristics of what the flattening of the world has done for many companies’ successes. Thomas Friedman took his experiences and put them into 9 distinctive categories. He titles each category a rule and used his experiences to show how they in turn help define the rule. Below I will explain the rule, highlight his findings to support the rule and give an analysis of what his rule really means.

History has proven than with technology everyone has an equal opportunity to use each others information. With the flood of information, more people have the opportunity to become part of history. People can now have an idea, and can utilize others research, and expertise to develop their own new idea, product, service, or skills. Big and small companies alike now have an equal playing field. At one time people had to rely on their own expertise and research to further develop their business. However, information can now be easily shared. Thanks to the flattening of the world collaboration has emerged and the idea of build your own business model has become a cornerstone of the small business enterprise.
 * Rule # 1 – What ever can be done will be done, however the question is by you or to you? **

** Finding # 1 ** : Thomas Friedman was in Budapest. Upon his arrival he entered a cab. His driver was from Hungry. Unbeknown to him his driver had his own cab company. His drive made him aware that if anyone else wants to travel they could look at his website. To Mr. Friedman’s amazement his website was very detailed. It highlighted is services, cars to be used and even included music. He found that this helped prove that more people can share their skills with the rest of the world. The technology helped the driver provide a service. This drive has shown that what will be done will be done. If he didn’t do this someone else would have.

** Finding # 2 ** : Dishware maker in Peru who made Peruvian dishware needed to find ways of making his products cheaper. He outsourced his services to China to be made at a fraction of the cost. Again, if he did not do this someone else would have.

** Finding # 3 ** : Uruguay partnered with India’s biggest software company (his idea was that by doing this India could work while people in Uruguay slept) He became a larger company being able to compete on a larger level through outsourcing A company in Nebraska found a way to further their business of providing foam for insolating concrete. To further their business they found a device from Korea and attached their own devices. They then had Plains Indians publish an Arabic Brochure which provided instructions for people in Kuwait. The machines were then built by people in South Sioux City for people in Kuwait. They incorporated other countries on making the product better and cheaper.
 * Finding # 4 ** :

** Finding # 5 ** : Man in Silicon Valley developed an algorithm for deleting and reducing errors in outsourcing back office work. The logo was made by Romanians but was sent to various countries for proposals. His company then continues to outsource services such as marketing, sales support, and patent filling to India. When asked where is office was, he simply held up his blackberry indicating that his office was all over the world.

** Finding# 6 ** : Friedman found a guy who wanted to design I-Pod headphones of colors other than white. He found that the gentleman used a company know as Aliabad to find someone in China to design the headphones and someone else to produce them. He then used Amazon to market them and sell them.

The idea behind his findings is that with the world flattening people and companies need to expand their view of how they are going to make, market, and sell their products and services. The people in this chapter did just that. In fact, if they did not, someone else would, thus proving whatever can be done will be done.

Companies of all areas and specialties have similar items, ideas, business models, and marketing strategies. However, those companies who could use their imaginations are the ones that will come out on top of the rest. With the playing field being leveled, it is the creative ideas, and the implementation of imagination that will drive acompany’s success. Companies always had to compete, however now they must look to compete globally. The internet has been one of the best ways of globalizing companies and leveling the playing field. Companies and individuals alike can now do more on their own. For a long time people always wanted to find ways to download ideas, download products, or download information from companies. Now people have the ability to do the total opposite. They can now upload their ideas, and become part of the larger world. The world of communication has globalize, and people now do not need to only rely on one company, but can choose what company they want to rely on. As Thomas Friedman pointed out, those who will survive will be the companies that create a environment which incorporates imagination and creativity. H e believed that using the imagination doesn’t necessarily change ideas, but imagination helps develop new ones. Allowing us to be free, open, and competitive makes us unique. And it is the country and companies with the least interrupted flow of ideas that will win. His one reference to this was Google in China. Many people may believe China is the 21st century. However, China censors Google. If this is true, and the internet could breed imagination, than how would China be the 21st century? Their flows of ideas have been interrupted.
 * Rule # 2 – Biggest ccompetition is between you and your imagination **

The companies that will make this country and many other countries grow will be the small businesses who can compete with the larger ones. Small businesses do not have the resources to be big. Or do they? They do if they think big and use the tools of collaboration. If small companies use other sources, and look for help elsewhere they have just as much of an opportunity to compete globally. The truth is even individuals have the same opportunity. This can be seen by Thomas Friedman’s finding below. A man developed a home grown package delivery service. His belief was that he could provide service to the Middle Eastern because he was from their and he knew the area. With his imagination and successful use of collaboration, he extended his service beyond the Middle East to all over the world. His main force and power was the internet. His final though was he was big locally and small internationally, but he reversed that.
 * Rule # 3 – Small shall act big – but only if they use the tools of collaboration to look and think big **
 * Finding # 1: **

For a long time companies acted big, telling their customers what to buy and what they needed. Now companies are acting smaller, and put more of the decision making in the hands of their customers. Companies are beginning to tailor their trade to letting customers find what they want, and creating products that make their customers happy. Basically, the companies have made their customers their employees without paying them. One of the companies known for that is E-Trade. They have a self directed website allowing customers to act big while the company acts small. Companies have begun to see that no one company can have all the answers. In fact, things have become too specialized for one department in a company to master. With this said, companies have to learn to be good collaborators with the global world. If companies are going to compete they have to find ways of becoming better at providing service, knowledge, distribution, manufacturing, designing, researching, and record keeping. Companies need other companies, there is no other way. In fact, most start up companies who would like to seek venture capitalists could not get a venture capitalist interested unless their was some form of outsourcing. Before it use to be, we will eventually outsource. Now it is more like, how are we currently going to outsource. Video game companies have found that music has helped sell more copies of games than any other feature. This means for video game companies to compete they must find ways to provide certain types of music for certain games. Now some gamining companies have developed music divisions. In fact, some musician’s feels video games could be a better way of getting their music heard as opposed to the radio. With the development of satellite radio, people can now choose what station they want to listen to. In turn, they may never have the opportunity to hear a song from another genre they may have otherwise liked. This scenario is two fold; the video game company may now have to incorporate a decision they never saw as necessary. However with this unfamiliar territory posing a problem it could also bring in more revenue.
 * Rule # 4 – The big shall act small and the customers shall act big **
 * Rule # 5 – Best companies are the best collaborators **
 * Finding # 1: **

Rolls Royce no longer makes cars. The company now leases the car business to BMW. Rolls Royce puts their focus on making gas turbines for civilian and military planes, helicopters and ships. Rolls Royce found they had to expand their skills and collaborate with other companies to build their business. Rolls Royce now has tapped larger markets such as the United States. Rolls Royce who use to conduct 100% of its business now only deals with 40% of the 50% of its service business. This means only 21,000 of the 35,000 employees are employed in the UK. They have 50 countries which speak 50 different languages making their products and outsource and outshore 75% of their components. Rolls Royce found that while they should deal with major components, it would be more beneficial to collaborate with other countries. Now Rolls Royce does 40% of the research as opposed to the 98% of the research they use to do.
 * Finding # 2: **

Companies are now stuck between a rock and a hard place. Companies must know not only where they are but where they want to go. This is only possible through careful scrutiny and a look at the various areas that make up the blue print of their business. Companies are now forced to look at what he called a “company skeleton” and see what area is a source of income, what is an expense, and see if there are any areas for doing things cheaper or better. They need to find any areas of department overlap, or the possibilities for other opportunities. Finding ways to do these things gives a company a better chance of focusing on their core competencies.
 * Rule # 6 – Best companies stay healthy getting regular chest x-rays and selling the results to clients **

Friedman found that HP, a prominent technology company, found through their review a possibility to explore other opportunities. HP now runs the Bank of India’s back office. While some may say this is odd, the truth is, HP found an opportunity and pursued it. This was only possible through regularly checking their company’s status and looking for opportunities. Companies must outsource if they want to compete globally. However, outsourcing only works if it is for the right reasons. When a company outsources to simply cut costs they will find this to be a barrier not an advantage. Companies can use outsourcing to get their staff at a cheaper price, bring in individuals with more expertise, and can complete projects and designs quicker and more cost effective. Finding # 1: A company developed a business of providing legal information regarding ethics, governance, and compliance. They used the website for information and for questions. However, when put against a global view they had to expand their service. They outsourced to Mindtree, a consulting firm in India. Through them they found qualified software engineers for the price of one American engineer. They used the outsourcing to grow their business, not necessarily to lower their costs. However, the cost being lower, was a perk. The basic idea is, outsourcing to find new ideas, and more experienced individuals is a method that is not only smart but necessary to compete globally.
 * Finding # 1: **
 * Rule # 7 – Best companies outsource to get bigger, innovate faster and cheaper and hire more and different specialists. **

Today people can not differentiate by price of by service, but by how they do business. Companies are more transparent and clients are more powerful then ever before. This era is no long about just getting things done. People now have a say in how things are done. People can post their thoughts and reviews. The truth is people would believe another person before believing what the company says about themselves on a website. It has become a two way dialogue where people could look into your business. In today’s day and age it is not necessarily what are the right things, but are things done the right way
 * Rule # 8 – How you do things today matters more than ever **

As the world flattens, the fight turns from large company against large company to large company, small company and individual fighting against each other. Putting up walls will surely hurt you before you even have the chance to start.
 * Rule # 9 – When the world goes flat dig inside yourself don’t build walls **

A company was designed to take pictures for catalogues. The pictures were taken with a Polaroid camera, than sent out to other companies for adjustments and changes. The company got into the business of taking pictures, but never saw that as the world was flattening more of what they did not know how to do was increasingly becoming part of what they had to learn how to do. As time passed and digital cameras came about, the company found that unlike before, they now were the lab that they once relied on. The option for still sending the pictures out to be adjusted was there, but this was surly going to cost more. They new their customers were not going to be prepared to pay for the services because other companies who were prepared for the change would do it themselves or outsource for no extra charge. So, the company dug inside themselves to find their core competencies to focus on. They then hired more thinkers and outsourced more technologies. The outsourcing provided a way to still maintain their style of business, but complete the tasks as cost effective as possible. With this adjustment they found it possible to compete globally. Again, this brings up an important phenomenon. What was once competition against companies down the street or across the state was now competition with companies around the world. This company proved that digging inside yourself would put food on the table, while if they were to put up walls, would surly be the demise of their business.
 * Finding # 1: **

** Important Quotes: ** “Our Competition is not only those firms we always use to compete against. Now we have to deal with giant firms, who have the capability to handle small, medium and large jobs, and also with the solo practitioner working out of their home offices, who (by making use of today’s technology and software) can theoretically do the same thing that a person sitting in our office can do” (The World is Flat, p.470) “Everyone can see what everyone else is doing now, and everyone has the same tools, so you have to be the very best, most creative thinker.” (The World is Flat, p.474) In this chapter Friedman finds ways of showing that with the flattening of the world, people have more available resources. In fact, these resources have allowed all people and all types of companies to virtually compete on an even keel. Companies have the same information and same advantages, however it is those who think creatively, look for opportunities and do not put a wall up around themselves who will come out on top. I can definitely say Thomas Friedman is right. Friedman points out through various examples that company’s who act first, use their creativity and imagination, utilize tools of collaboration, conduct regular company reviews, and outsource for the right reasons will succeed and survive. With the creation of the internet and Netscape in particular, business now are put out for review and examination. Companies can no long rely solely on their own resources, but must extend their views and search options.  This change will hopefully pull together our world and unite us. However, outsourcing and heated competition could also do the opposite. Countries other than the United States may expect more. Over the next ten or so years, countries will continue to try and become leaders in the conceptual world. With competition heating up and more companies relying on others to do their job we may see tension build. The truth is we do not know where or what will happen. As educators we must stay on top of changes. Concepts such as technology are no longer an advantage for some schools but a necessary element for all schools. Students need to be taught to think big, be creative, and use their imaginations. For a long time imagination was left behind after the primary years. However, as educators we will now have to resurrect those ideas, and bring them back into the classroom more than ever. Schools will now have to be prepared for the 21st century. Students need to be made aware of how important communication is, and how collaboration is necessary for all parts of life. As a school we must be more aware of conducting reviews so that we can assure ourselves, our community, our state, our country, and our world that what we are teaching our students will prepare them for the world they will one day lead.