Platt Perspective on Business and Technology

Reexamining business school fundamentals (reconsidered) 3: strategy and strategic vision in the interconnected, interdependent marketplace

Posted in book recommendations, reexamining the fundamentals by Timothy Platt on February 9, 2017

This is my third installment to a series of brief, single issue sketches in which I reconsider each of a set of core issues that I first addressed in this format in a 2010 series. See Section II of my directory: Reexamining the Fundamentals for that earlier related series, and in particular see my earlier same-name counterpart posting to this one as included there: Strategy and Strategic Vision in the Interconnected, Interdependent Marketplace.

I focused on the issues and challenges of competition, and of strategically planning for and building to be more competitive in that posting. And to be more specific, I wrote there about how the pressures of the marketplace are changing as the world has become more actively, real-time connected and flattened, to use Thomas Friedman’s term for this phenomenon. See his term-defining, and paradigm shift acknowledging book on that:

• Friedman, T.L. (2007 edition) The World Is Flat. Picador/Farrar, Straus and Giroux. New York. (The first edition of this initially came out in 2005 but I cite here its revised and updated edition).

And also see related references cited in the second installment to this series, as well as references cited in the 2010 counterpart to this posting as noted above.

I at least briefly sketched out a negative, long-term dysfunctional case study example in my 2010 posting, to highlight a more positive alternative of how businesses in an increasingly globally connected and competing context, can succeed and thrive and long-term. And I come back to this set of issues here, just short of seven years later, to make note of an increasingly impactful source of wrinkles in all of this global flattening and opening up: how an as-of-now, active and still growing backlash against free trade agreements is developing. And this movement in fact actively favors the imposition of explicit barriers and walls, and particularly in more developed nations that would normally, historically be actively promoting more open access and freer trade.

I offer this posting as a counterpoint and update to the second posting of my 2010 series that I have among other things taken the subtitle from, for reuse here. But at least as importantly, I offer this as a very direct continuation of the second installment of this new 2017-written series: Taking a Globally Connected Perspective, Take Two

The details that I offered as current in my 2010 posting really do seem quaintly outdated now. I begin the main line of discussion for this series by offering current news-related references to put this in a now timely 2017 context too, and in the same way that I did then. And looking at how the world has changed from that of the then-snapshot perspective of my 2010 series, and certainly for some of its then-pressing issues, I offer these references so a reader in seven more years could more easily review the (perhaps by then also quaint and outdated) details that I would cite here as representing our collective current, as of this writing here-and-now.

The first in-the-news story that I would cite here is that of the apparent rise and the definitive fall of the Trans-Pacific Partnership, or TPP. This trade agreement was first proposed and initially worked upon, for its details and for securing buy-in from prospective member nations, with high hopes for success. And many nations have agreed to ratify it as active participants, but a number of key expected signers have balked and on the basis of tremendous resistance to it from their citizenry. That definitely includes the United States – the nation that at least initially looked to be the biggest supporter of this initiative and an essential participant in it if the TPP is to work.

I have written in this blog about how Vietnam and other smaller Pacific Rim nations have strongly supported this agreement (see for example my series: Vietnam, Đổi Mới, and the Search for Business and Economic Strength and Global Relevance, as can be found at United Nations Global Alliance for ICT and Development (UN-GAID) (in its postings 34-45.) Vietnam, and I add a number of other nations that flank the South and East China Seas, came to see this trade agreement as their salvation in many respects, as they have sought ways to deal with their much stronger neighbor: China. There is, or at least there can be strength in numbers, and Vietnam and many of the potential signatories to this agreement from their region saw this as offering them all greater collective leverage and strength than they could ever achieve separately when facing China’s expansionist and even predatory claims and actions.

Many people in the United States, and certainly many there who have seen themselves left out of the recovery from the Great Recession, have come to see agreements such as the TPP as little more than mechanisms for taking away more of their jobs – shipping them out of the country to nations where salaries are lower and employee benefits negligible. And they saw this agreement as a mechanism for helping those foreign-based companies to flood our markets with goods at lower prices than American businesses can match and still meet payroll and other operating expenses faced here.

The TPP in this, is just the tip of a much larger iceberg, as efforts to block this initiative have led to calls to reconsider and scrap or at least significantly alter and replace other trade agreements too. In a United States and the Americas context, the North American Free Trade Agreement (NAFTA) comes immediately to mind there. And one of the sticking points there, and for the TPP too that has served to expand the demographics of discontentment for all of this, is concern that adherence to these agreements as legally binding treaties means foreign businesses can bring legal suit against governments that seek to enforce their own environmental protection laws and court rulings – where it might be argued that this would create competitive barriers and the equivalent of tariffs to those businesses. This has already happened – and adjudication of these disputes has come to be seen in countries like the United States as skewed and biased against local and national law and against the local and national interests of the countries so challenged. Crucially important there, in driving this concern is that these disputes are not adjudicated or ruled in the courts of nations so challenged and there are no real routes to appeal that would involve their own legal systems or standards. Here, businesses that claim to be blocked from doing profitable business in violation of a trade agreement, can successfully sue for damages that match what they would claim to be lost profits – that were prevented by enforcement of trade partner nation environment and other laws.

There is a lot more to this still actively unfolding news story, but I will leave this narrative here with just one final point. I basically identified the TPP as a dead issue here in this posting and for a reason. President Obama was looking forward to signing it and to bringing the United States in as an active signatory nation. But this agreement became a political football in the 2016 US presidential elections and one of the very few issues that Republicans and Democrats could agree on – even as they tore into each other on seemingly everything else. In fact the closest they could come to arguing on this issue was when they each claimed that they were much more genuinely anti-TPP than the other! Obama did not even try getting a post-election lame duck Congress to vote to approve this, and it effectively died as a global agreement with that – barring an all but Lazarus-like revival at some future date.

I offered my 2010 counterpart to this posting in then-current terms, knowing that the issues and conditions cited there were ephemeral and subject to both change and even complete reversal. I have offered this posting in the same vein, noting here that while free trade agreements are under severe threat and challenge now, that will change. Globalization will continue and eventually free trade is going to become essentially globally connecting – and of necessity. But that does not mean change will somehow cease to provoke pushback and it does not mean it will become smoothly frictionless, and overtly equally benefiting towards all and all at once. Friction will continue and the more disruptively game changing the specific changes that arise and are developed, the more friction and resistance will arise from them too – even if those changes, in their specific instances do eventually become quaint historical notes.

As a final clarifying note here, I have focused in this posting entirely on perception as to how a wide swath of American workers have come to see themselves threatened by free trade agreements. These people do see large numbers of what have traditionally been their job and career paths thin out and even disappear, and certainly in recent years. So it is understandable that they would feel threatened – and angry from this. I would argue that automation has done more to cause this that the export of jobs and work opportunity, to lower wage community, human hands. But it is immaterial here, whether that is true or not. This is all perception and belief driven. And that is how the types of resistance to change that I write of here arise and grown.

I am going to continue this series and its developing narrative in a next installment where I will return to consider leadership (as addressed in my 2010 series in its third installment.) Meanwhile, you can find this and other related postings and series at Reexamining the Fundamentals, as a new Section VII in that directory.


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