In the past 60 years the world probably changed more than ever before. Technology changed people’s life and their behavior. The change caused also affected the way people and businesses communicate. The various means of communication, brought up by progressive technology, made the path to globalization easier for many corporations. We will have a look how the operating environment for businesses changed, the effects of globalization and antiglobalization, and how improved communication helped companies to overcome environmental changes.
The evolvement of attitudes toward American business throughout the past centuries
In the United States, business never really had a completely positive image. The industrial revolution in the 19th century enabled mass production on the one hand, but on the other hand conditions for workers in factories at this time were harsh and dangerous. Furthermore, the exploitation of young women and children working in factories worsened the negative image of business in those days. Rich business-people were considered to be corrupt and to care rather about their own welfare than about the worker’s.
After the prosperity of the stock market in the 1920’s, the bubble finally burst in 1929 and a big depression followed. After World War II, however, American business and American economy began to prosper again for the next three decades. Yankelovich, a marketing consultancy firm, conducted a poll asking Americans if “Business strikes a balance between profit and the public interest”; in 1968, 70 percent of the population answered yes to this question. The Watergate affair, Vietnam, and exploding oil prices due to the oil embargo, changed the attitude of Americans and when asked the same question by Yankelovich in 1976, only 15 percent believed that business strikes a balance between profit and the public interest. In 1999, the last year this poll was conducted, despite the economic boom in the 1980’s and 1990’s only 28 percent answered yes to this question.
This decade is embossed by the burst of the “Internet bubble” in 2000, company scandals like Enron’s, and the enormous and growing gap between CEOs’ salaries and those of average factory workers, which are approximately 411 times higher. This led to a high distrust among Americans toward businesses. In addition the media in the 1990’s supported those attitudes towards companies. Even Hollywood contributed with movies like “Wall Street” and “Erin Brockovich” to a negative attitude toward American business.
The evolution of globalization
Progressive technology provided communication channels that made physical limitations disappear and distances become less important. The world grew together to a big “Global Village”, just as the Canadian philosopher Marshall McLuhan foresaw it decades ago. Of course, this evolvement affected also the business world, leading to big, globally interwoven corporations. Nowadays 51 out of the top 100 economies in the world are multinational corporations; only the remaining 49 are countries. This led to a movement against globalization, because many people feared that companies gained too much power and have too much political influence. Furthermore many multinationals exploit people in developing nations by having them working under, for the western world, unconceivable working conditions, reminding of the severe conditions during industrialization in the 19th century in America. The anticorporate activism that followed also used latest technologies to organize this movement through the internet. So, the same technology that enabled corporations to become global giants helps the anticorporate movement to organize itself and become stronger and more popular.
How to handle a changing environment and succeed in it
The environment in which corporations are active nowadays constantly changes. Today’s technology supports rapid changes, because information can be exchanged in real time, all over the world, among billions of users, like never before.
In order to stay competitive, companies have to recognize the changing environment. Managers have to think in the long term and adapt the corporation’s strategy as soon as possible to trends that are likely to evolve into changes in future.
Companies must adapt to the environment, but without compromising their principles. Companies have to keep the cornerstones of their business and what they stand for, despite any adaptations to changes.
Thirdly companies should not be naïve and expect problems to be solved by time. The assumption that problems will disappear in the course of time can be fatal. Companies have to change their communication strategy when problems occur in order to overcome those. Consumers have a longer lasting memory than one might expect, therefore the right adaptation in the company’s communication can prevent persisting attitudes toward business that may have fatal results.
Finally, communication has to be in accord with the company’s mission statement, closely linked to the overall vision and strategy. Managers have to realize the importance of communications already when they hire people for these positions. Those people have to possess communicative skills. Companies’ communication teams are essentially important for a company because they shape the company’s “face” by communicating the company’s mission to internal and external constituents. And in a rapidly changing environment it is important to save face for oneself, but also for consumers who are exposed to those changes and seek for some stability.
Examples:
A good contemporary example of a negative image, are the American oil companies. People expected the war in Iraq to bring stability in oil prices; instead the price per barrel rises and rises and has reached a record high. This is reflected by the prices at the gas stations, where consumers can immediately feel the increase. The oil corporations say that this is primarily due to a not yet stable Middle East and due to scarcity. They claim that they do not gain more profits than before, and that the prices at the gas stations reflect the increase of the price per barrel. In the same time those companies publish the record profits of all times. This caused consumers to be upset because they feel exploited, and thus the oil companies to be among America’s most disliked companies, enjoying a very bad public image.
Another good example of companies that were not able to adapt to changes is maybe that of a whole industry, the American automobile industry. After the first oil crisis in 1974, American companies continued producing cars with big engines and therefore low mileage per gallon. The management did not react at all to economic changes, probably assuming that the price shock of 1974 was just an outlier and would reach its old equilibrium over time. They also may have believed that consumers would handle the shock over time, which turned out to be a naïve assumption. Japanese car manufacturers on the other hand realized the changes in their operating environment and imported affordable fuel efficient cars into the US, with the result that there was a tremendous rush on these cars, that severely harmed the American automobile industry.
A recent example what media can cause can be seen in the case of McDonalds in connection with the Hollywood documentary “Supersize Me”. The trend that people consumed more and more with great awareness in terms of food began already in the early 1990’s. In the same time the part of obese people among the American population constantly grew. Morgan Spurlock ate exclusively McDonalds’s food for one month, with the result that he became overweight, his circulation became worse, and he had potency problems. The whole fast food industry was suddenly blamed to be partially responsible for the growing obesity among the US population. This movie had especially on McDonalds an immense effect, but its managers acted quickly and added a variety of salads and low fat sandwiches to the menu. Furthermore McDonalds excluded the XXL size from its menu.
Experiences:
There were two major changes I experienced throughout my life so far, the internet, and mobile communication. I think both technologies affected communication more than any other invention before; at least their impact is on the same level as of the telephone or the fax. Mobile communication suddenly made it possible to be reachable anywhere at any time. Nowadays this is taken for granted by many people in the business world. So this invention substantially changed communication especially in the business world. The internet had a similar impact. In the early 1990’s no one really expected a company to have its own website. Nowadays it is mandatory for a company of each size. Not only companies, but more and more people have a personal website with a résumé and additional information about themselves in the internet. And this is more and more expected from people, that they have for example a URL on their business card for a site about their person. If one thinks 15 years back, all those things did not exist, at least not in the same extent as nowadays; an immense change in personal and professional communication.
Another major change I experienced is the effect of globalization. When I look through the job or even internship offers in Europe, English is not accepted as a foreign language anymore, but taken for granted. I grew up in Germany and companies there expect besides of English at least another foreign language from their future employees. This is the minimum criterion; preferable are two or three foreign languages besides English. These high demands evolved due to globalization on the one hand, but especially due to a growing together European Union (EU). No borders exist anymore. Traveling and trading face no national borders, custom duties have been abolished within the EU, even residency can be freely chosen among the entire EU. The only barrier that still exists, are the various languages. With 27 official languages, businesses within the EU expect their employees to have good command of at least three languages. 15 years ago things were different, only few thought about a multinational business within Europe. With the EU and the establishment of a common currency, the EURO, nowadays no one thinks nationally anymore. Many companies for example remove their accounting department to another country, parts maybe produced in the Czech Republic i.e., assembled in Romania, and the quality test is in Germany; a major change for Europeans.
References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 1-12.
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