Global Competition: A New Era for International Business

Matthew MacLachlan

19 May 2015

The last two centuries have seen dramatic changes in how we earn a living.  From the early days of the industrial revolution of the late 18th century to the impact of technology, communication and globalisation in the late 20th and early 21st centuries, what we do at work would be unrecognisable to our grandparents.  But there is another revolution going on as well:  not just what we do at work but also how we do our work.

Physical Interactions Have Remained Largely Unchanged

In the second half of the 20th century, most Western countries witnessed the transition from a labour intensive workforce to the use of mechanisation, automation and outsourcing. However, jobs that require a lot of direct, face-to-face human interaction have remained similar over the same period of time.

The Right People in the Wrong Places?

McKinsey have published an article exploring the next steps expected in the workplace revolution – transforming many of these unreformed, face-to-face jobs.  The motivations to making these changes are not only cost savings, although that is a major impetus.  Demographics also play a big part.  Simply put, the right people are not necessarily in the right places for the right employers.  Whether this is due to education gaps, where not enough candidates are able to perform the job, or cultural reasons, where some job age members of a population do not work or there are simply not enough of them, today’s businesses must find new ways to adapt to 21st century demands.

International business cannot continue to send large numbers of people around the world to temporarily fill these skill gaps – that’s simply too expensive and often culturally disruptive as well if the expatriate is not sufficiently prepared.  And some jobs are simply unmovable.  So what can be done?

The McKinsey article highlights a number of ideas in their model of changing global competition.  They advocate greater flexibility in the way we do our jobs as well as how we define them. Reconstructing job descriptions and tasks is one approach.  They have illustrated success in the past within the legal profession, where the most skilled work remains with the most skilled employees.  Other moderately skilled work was then siphoned off and redefined as paralegal work.  Paralegals developed their own level of skills and were remunerated accordingly by their employers.  This had the additional benefit of creating a large number of new jobs as well.

The McKinsey article suggests that many lines of business remain ripe for reform, such as the medical profession as well as certain functions that are currently performed by HR professionals or even marketing executives.  Perhaps more general skills in these disciplines can also be siphoned off.

Many organisations are not fully utilising technology that is currently available to them that would allow many of their employees to work virtually, at least on occasion.  Benefits include everything from reduced commuting and office costs to attracting a wider range of prospective employees who might not consider a traditionally structured job but who are otherwise suitable – and keen – candidates for the job.  These people may include young people whose lifestyle works well with technology but less so in a 9 to 5 structure, to parents with childcare duties to people who may have mobility challenges.

Flexible Working: Taking It to the Next Level?

Flexible working is not only about working from home or choosing work hours that are suitable to the employee.  It also includes how businesses organise their labour force.  More and more globalised organisations also recognise the value of temporary and contract employees.  With the right match of people, skills, and protective labour laws, the cost benefit of adjusting the number of workers more adeptly than through a series of hiring and redundancies of permanent employees can result in a large increase in efficiencies.

Finally, international businesses must be prepared to shift their managers’ skills and work styles to accommodate this new era of working.  This includes a high demand for organisational and communication skills, both in person and virtually.  It also includes the need to build strong relationships and trust, and the ability to let employees get on with their work.

Nothing positions an international business for success better than innovation, flexibility and adaptability.  From the mechanisation of industry in the north of England to the establishment of call centres stretching from India to the Philippines, what we have done in our jobs is revolutionary.  Maybe we can call the rapid changes in how we are doing our jobs a modern revival of the industrial revolution after all.

 



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