21st –century corporations

21st –century corporations

Hmmm…Thinking of it…what would be 21st- century corporations look like...

Great Transformation
In this new century, success will go to the companies that partner their way to a new future, not those that put heavy assets onto their balance sheets. Leaders once thought that creating intense rivalries among competitors motivated their employees and assured success. But in the days to come, a company's fiercest competitor might also be its most important collaborator. Since the dawn of trade, every business leader has wanted to build an enduring enterprise. In the new century, though, many companies will be intentionally ephemeral, formed to create new technologies or products only to be absorbed by sponsor companies when their missions are accomplished.

How, exactly, will these forces reshape the 21st century corporation? The organizations that flourish will have several defining features.

It's management by Web. That means not just Web as in Internet but the web-like shape of successful organizations in the future. If there are pair of images that symbolize the vast changes at work, they are the pyramid and the web. The organizational chart of large-scale enterprise had long been defined as a pyramid of ever-shrinking layers leading to an omnipotent CEO at its apex. The 21st century corporation, in contrast, is far more likely to look like a web: a flat, intricately woven form that links partners, employees, external contractors, suppliers, and customers in various collaborations. The players will grow more and more interdependent. Fewer companies will try to master all the disciplines necessary to produce and market their goods but will instead outsource skills--from research and development to manufacturing--to outsiders who can perform those functions with greater efficiency.
It's more about bits, less about atoms. The most profitable enterprises will manage bits, or information, instead of focusing solely on managing atoms (the corporation's physical assets). Sheer size will no longer be the hallmark of success; instead, the market will prize the ability to efficiently deploy assets. Good bit management can allow an upstart to beat an established player; it can also give an incumbent vast advantages. By using information to manage themselves and better serve their customers, companies will be able to do things cheaper, faster, and with far less waste.

It's mass customization. The previous 100 years were marked by mass production and mass consumption. Companies sought economies of scale to build large factories that produced cookie-cutter products, which they then sold to the largest numbers of people in as many markets as possible. The company of the future will tailor its products to each individual by turning customers into partners and giving them the technology to design and demand exactly what they want. Mass customization will result in waves of individualized products and services, as well as huge savings for companies, which will no longer have to guess what and how much customers want.

It's dependent on intellectual capital. The advantage of bringing breakthrough products to market first will be shorter-lived than ever, because technology will let competitors match or exceed them almost instantly. To keep ahead of the steep new-product curve, it will be crucial for businesses to attract and retain the best thinkers. Companies will need to build a deep reservoir of talent--including both employees and free agents--to succeed in this new era. But attracting and retaining an elite workforce will require more than huge paychecks. Corporations will need to create the kind of cultures and reward systems that keep the best minds engaged. The old command-and-control hierarchies, with their civil-service-like wages, are fast crumbling in favor of organizations that empower vast numbers of people and reward the best of them as if they were owners of the enterprise.

It's global. In the beginning, the global company was defined as one that simply sold its goods in overseas markets. Later, global companies assumed a manufacturing presence in numerous countries. The company of the future will call on talent and resources--especially intellectual capital--wherever they can be found around the globe, just as it will sell its goods and services around the globe. Indeed, the very notion of a headquarters country may no longer apply, as companies migrate to places of greatest advantage. The new global corporation might be based in the U.S. but do its software programming in Sri Lanka, its engineering in Germany, and its manufacturing in China. Every outpost will be seamlessly connected by the Net so that far-flung employees and freelancers can work together in real time.

It's about speed. All this work will be done in an instant. ''The Internet is a tool, and the biggest impact of that tool is speed,'' says Andrew S. Grove, chairman of Intel Corp. (INTC) ''The speed of actions, the speed of deliberations, and the speed of information has increased, and it will continue to increase.'' That means the old, process-oriented corporation must radically revamp. With everything from product cycles to employee turnover on fast-forward, there is simply not enough time for deliberation or bureaucracy.

The Rise of Corporations
Today we know that corporations, for good or bad, are major influences on our lives. For example, of the 100 largest economies in the world, 51 are corporations while only 49 are countries, based on a comparison of corporate sales and country GDPs. In this era of globalization, marginalized people are becoming especially angry at the motives of multinational corporations, and corporate-led globalization is being met with increasing protest and resistance. How did corporations ever get such power in the first place?
Corporations, as we tend to think of them, have been around for a few centuries, the earliest of which were chartered around the sixteenth century in places like England, Holland etc. Technically speaking, a corporation is what Robbins describes as a “social invention of the state” (Robbins: p.98). That is, a state grants a corporate charter, permitting private financial resources being used for public purposes. As Aright points out, this initial creation of private finance and merchants, etc was to aid in the expansion of a state to which it belonged, and as Aright and Smith detail, served to expand colonial and imperial interests to start with, as well as help in war efforts between empires.
The advantage of having a corporation over being an individual investing in trade voyages etc, was that an individual’s debts could be inherited by descendants (and hence, one could be jailed for debts of other family members, for example). A corporate charter however, was limited in its risks, to just the amount that was invested. A right not accorded to individuals.
Corporations had therefore the potential, from the onset, to become very powerful. Even Abraham Lincoln recognized this:
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. ... corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”

References
http://www.globalissues.org/article/234/the-rise-of-corporations
http://www.businessweek.com/common_frames/ma_0035.htm?/2000/00_35/b3696011.htm