Every time there is a modern business is discussed, the issue of a challenging environment is first on the agenda. Modern business is synonymous with a challenging environment. Theories, rules and trends that have been the backbone of business have become if not less effective, almost obsolete altogether. Today’s business environment is just changing so fast and so unpredictable that one has to decipher it from different angles and viewpoints.
Modern Business: A Challenging Environment
The conventional no longer holds true for modern business. There is a new set of rules to be followed or observed if one wants to keep up in a challenging environment. There is a tension on big companies to be big in some areas but to be small and nimble in other areas. There is a tension on business or organizations to centralize and at the same time to decentralize. There is also that desirability to be a leader in a chosen field or market and to be a follower. There is that need to be a team player and the need to be an individual.
What is essentially needed in this kind of scenario is fresh thinking. A challenging environment necessitates different kinds of rules as the players in the business arena transform themselves into different roles depending on what kind and level of business transaction they are into. A case in point is outsourcing or sub-contracting. Years ago only manufacturers went into outsourcing or sub-contracting for the reason of economies of scale. It was impractical for the manufacturing sector to construct a factory for every component of its product, hence the outsourcing. Today, however, practically everything is being outsourced: maintenance, repairs, customer service, marketing, even research and development. This calls for a new set of rules to help business or organizations. Strategic planning then needs to identify or formulate certain rules in order to assure they can be up for the challenge of change.
Change as part of a Challenging Environment
Change is part and parcel of a challenging environment. History tells us that the dinosaurs became extinct not because there was no longer a place to roam around or that food had become scarce. Dinosaurs became extinct because they cannot adopt to change. They were wired differently than the rest of the animal kingdom. The same is true in modern business. Adopt a dinosaur mentality and you go to the history books.
Modern business has become one big global arena. A change in one part of the world affects all the others in this one big global arena. A very solid example is the rise and fall of the value of the U.S. dollar. Exports from the U.S. rise in value, exports to the U.S. rise in value. But imports from the U.S. also rise in its value, affecting the cost structure of many economies that use the currency in its daily transactions.
Modern business is a collection of changing structures. The big companies that have taken pride in their sheer size and resources have adapted to a challenging environment by restructuring itself for smallness. Small and medium-sized companies have also adapted to a challenging environment by reinventing itself into smaller units to provoke fresh thinking and so outsmart the competition.
Entire markets have been taken over by small companies from the bigger ones, simply because the smaller companies were able to provide fresh insight and act on in at blinding speeds. Strategic planning then should adopt well with change by providing fresh thinking and designing systems that deliver at blinding speed for the business or organization.
Chaos as part of a Challenging Environment
Chaos is also an integral part of a challenging environment. It is a kind of chaos that is unusual, it is both manageable and it is also unwieldy. It can be beneficial and it can be destructive to the business or organization. Today, since everything has been practically outsourced there is chaos in the business environment. Business or organizations that have outsourced partners are in for a chaotic but mutually beneficial relationship.
For the business or organization, there is always that fear that the outsource partner might learn all the secrets of the trade and practice forward integration, meaning becoming a direct competitor. On the other hand, the outsource partner has also that fear that in spite of agreements and contracts, the principal might just at anytime terminate the transaction leaving it with all the equipment and manpower, and nothing to do.
Chaos is also evident in a challenging environment of the workplace and the workforce. Employees in business or organizations that have downsized find themselves doing multi-tasking. Managers often find themselves alone with no secretaries and assistants due to the reorganization. Employees also who have been terminated find themselves into a chaotic but beneficial new workforce and new workplace. Most job openings today are in the outsourcing sector. While the pay may be good, it is part chaotic; you work on odd hours and on unusual schedules.
The modern practice of business or organization to do the outsourcing overseas is an addition to chaos in a challenging environment. Business and organizations have to deal with an outsource partner who is overseas, in a different time zone, in a different culture, in a different working environment. It is a chaotic but mutually beneficial relationship. Both are paid by the same business or organization both works in different time zones but must constantly be in communication. While some are supposed to be on their beds sleeping, one has somehow to allocate time to work because the outsource partner is having its business hours, and vice versa. Strategic planning should include the chaos equation as part of a challenging environment.
Conscience as part of a Challenging Environment
In modern day business, negative repercussions affect everyone. This premise specially holds true in the area of the conscience of the business or organization. Years ago, business can practically get away with despicable business behavior: using carcinogenic ingredients in products, dumping waste, and hiding product defects, to name a few. Confident their lawyers can handle the issue professionally. That is no longer holds true today; part of a challenging environment is good, practical business conscience. Try defying good, practical business conscience and the whole world will be up in arms and you will run out of business.
Social conscience and social responsibility is a part of a challenging environment. Strategic planners cannot formulate strategies without including this in the equation. Through the change and chaos of the modern day business arena, it is conscience that holds the business or organization pleasing and acceptable to the public eye. Even a minute violation of social conscience and responsibility is enough to cause sweeping charges against business and organizations. Put a little lead on your product, and as soon as quality inspection discovers it, your whole product batch as well as the old product batches will be recalled from shelves all over the world. That is conscience in a challenging environment.
What is in store for modern day business in a challenging environment? Opportunities, opportunities, and more opportunities are in store for modern day business. Change is positive for business: mobile phones have such a wide range of models, so that when you are in a group, you hardly find someone with the same phone model; this applies to other items as well.
Chaos is positive for business: outsourcing outfits are sprouting worldwide, generating financial opportunities for people in other countries. Conscience is positive for business: it keeps them on their toes, reminding them of their responsibility to the world and to the environment. Strategic planning is a must in a challenging environment. However, planners must take heed not to forget these essential inclusions to their plans.