Business Case Studies, Executive Interviews, David Ahlstrom on Global Economy and Global Managers

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Executive Interviews: Interview with David Ahlstrom on Global Economy and Global Managers
October 2008 - By Dr. Nagendra V Chowdary


Prof. David Ahlstrom
Professor in the Department of Management at The Chinese University of Hong Kong.


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  • What according to you is the new economic consensus and the new business order? Do you see the rise of business diplomacy? Do you see a greater role for government in business, positively of course?
    I hope we will not see a greater role for government in business. Government can play a positive role in creating cutting edge regulations, or establishing standards for safety, or new process technologies that benefit a whole industry. But government cannot forecast major technological change. I am hopeful that governments recognize this, and stop trying to prop up old industries that are being disrupted, such as the integrated steel mill industry.

  • What according to you are the five most important trends that are going to shape the way global business will be carried out and what advice would you offer to the top managers operating those businesses?

  1. The pace of technological change will increase as more countries 'get in the game' of science and technology.
  2. Increased communication will facilitate global business.
  3. Trade barriers will continue to break down as regulations change and technology facilitates trade.
  4. Global business will become more important and managers will have to pay attention to becoming internationally competent.
  5. More attention will be paid to new forms of energy and other sustainability factors.
  • What do these trends mean for the organizational preparedness? Do you advocate that companies should invest heavily in 4Ps people, processes, platforms and programs to be at the forefront of innovation in the new business order?
    Companies should not neglect investments in human resources, at multiple levels.

  • What should be a CEO's agenda in the new economic and business order? What factors do you think are going influence a CEO's agenda?
    CEOs have to wear many hats in the future. They have to be leaders, influencers, and diplomats.

  • What do you think would be the critical success factors for global firms in the new business order and what should be key result areas for the executives in the new economic and business order?
    Innovation is central to firm success. It is difficult for a firm to disrupt its own main products and introduce new ones, but the ability to do this will be even more important than going forward. Intel is an example of a firm that was able to disrupt its own main product line when it introduced the Centrino line and other chips and chipsets that facilitated mobile computing. This was against the advice of some of Intel's top engineers, but they did it, and the new lines are now a very important part of Intel business.

  • One of the often cited capabilities that companies should develop is managing multicultural teams. How do individuals develop their capability to adapt effectively across different cultures? Why do some individuals possess superior capacity to deal with the challenges of working in different cultures? How do individuals reach full productive potential working in culturally diverse work environments in their home countries and overseas? How do organizations build capability for effective work assignments in locations around the world? How do organizations optimize individual and collective performance when they harness the cultural diversity of their people across the world?
    Firms should try to give crosscultural training. Some peoplemay be more naturally adept in cross-cultural situations, but anyone can be trained so as to improve at this.

  • The current business lexicon consists of competitive advantage/ edge, strategic positioning, core competencies, value chain, value nets, value creation and value migration, shareholder activism, corporate governance, corporate social responsibility, blue ocean strategy, etc. What do you think would be, rather should be, the new business lexicon?
    I do not argue for a new lexicon. I would like to see these concepts understood first, and applied properly. They are powerful if used properly. Just think of the number of firms that practice 'me too' strategies. They are violating basic principles of differentiation and value-add. But they do it all the time, and we all suffer because of it. In Hong Kong for example, every shopping mall looks just like every other one. Why must they imitate each other exactly? It has to do with the staid retail environment here, and the lack of risk-taking in this industry here. Just trying to get students and business people to understand and properly apply these terms takes up most of my teaching time and energy.

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