The Changing Environment for Business

The Changing Environment for Business

 

 

The last 40 – 50 years, the business environment has changed quickly and public current expectations of firms are also different from what they were some decades ago.

In this chapter, we will put our discussion of corporate communication in context by looking at some of the events that have influenced the operating environment for business. The first part is about the attitudes toward American business through the last years.

 

Attitude toward American Business through the Years

 

The Image of business in the United States had always a hard time and has never been perceived in all ways positively.

In the 1860s, the creation of the national railroad system created dangerous working conditions for steelworkers and railroad builders. These and other circumstances had a significant impact on the Americans business image. On the beginning of the 20^th century rising stock markets created great disparities in wealth distribution. Shortly after that the stock market bubble finally burst in 1929 and the following Great Depression affected the rest of the industries world. This time was also a “dark” for business and individuals alike.

Furthermore, in the 1940s the business started rebounding from the Great depression. But at that time the companies geared up for the Second World War. The steel industry, the automobile industry and others were rising during the time of the 50s and 60s of the 20^th century. The economy was booming and was the major issue for the rising wealth in the United States at this time.

Because of the Watergate Scandal, the oil embargo, and the War in Vietnam the business reputation turned into negative again. By the mid1970s the American attitudes toward business reached a all-time low. The economic boom in the 80s and 90s could not turn the shift in business image. Most of the Americans lost their faith in the society’s institutions and business.

Finally, in the last years, the “dot.com bubble” created further distrust in the society.

 

Media´s Impact

 

The past showed that literature and arts have both affected a society’s negative perception of institutions. Today, television is probably the most important media throughout the United States. The American society spends more time in front of the TV than they do in classrooms.

This example shows that the media, like the television or even movies for example has a huge impact on the public’s negative attitudes about business. 

However, the dramatization and exaggeration in TV programs and Hollywood movies can reinforce the negative image of business.

 

The Global Village

 

Technology improvements throughout the last decade have strengthened communication channels around the world. This phenomenon creates a smaller world with shared knowledge. The result is a “Global Village”. Furthermore, companies tend to specialize in their core competencies and outsource what remains alternative, merge to integrate the suppliers into their own organization. The companies get more and more political power, which created a “anti- brand” movement that flourished in the mid 1990s.

But, the continual technological advance has also negative impact on the firms. This improvement made it difficult for companies to prevent negative news about them from reaching individuals in virtually all corners of the world.

 

How to Compete in a Changing Environment

 

Even all companies face attacks in this antibusiness and changing environment. Companies like Nike or McDonalds have to consider four steps.

 

1. Recognize the Changing Environment

 

Managers have to recognize that environmental changes can affect their business. These changes need to be observing constantly. These changes can be long-term or even short-term. Companies need to quickly determine what they need to do to respond to such changes.

 

2. Adapt to Environment without Compromising Principles

Second, companies must adopt to changes in the environment without changing their own principals. The companies have always to focus their identity and principals, because this is the source of the firm’s success.

3. Do not Assume Problems Will Magically Disappear

 

 

Third, companies and managers have to know that problems can not be solved by doing nothing. The mangers have to act, even when the methods are new or unbeknown.

4. Keep Corporate Communication Connected to Strategy

Fourth, communication throughout the company must be linked to the firms vision and strategy. In order to communicate effective, the firm’s mission should be defined to internal and external constituencies.

 

 

Examples

1. Last year I did an internship in a bank in Germany. The first day as I started there impressed me. All documents which they collected from customers were stored in paper based form. They had huge rooms with important documents in the basement.

But, on the end of the following quarter, they changed their system and the employees started scanning the documents immediately after they used them. It took them a while to scan all documents. But this example shows the technological improvements in the real business world.

 

2. Another example is that the all employees got new telephone station with wireless headphones and build-in cameras. This also simplified their work. This is another example by technology changes.

Links

http://www.carrollcommunications.com/

http://www.oceusa.com/cp_high_speed.html

http://www.intranetjournal.com/articles/200510/ij_10_26_05a.html