‘The World is Flat’ by Thomas L. Friedman (Business Book Review)

In his book The World is Flat, Thomas L. Friedman indicates that it has become easier to do business instantaneously with any person across the globe. This progress is attributable to falling trade and political barriers, as well as advancements in technology. As a result, the playing field has been leveled, giving every nation equal advantages. Friedman (2008) also mentions that ten ‘flatteners’ have leveled the field, thus making it easier to connect with the rest of the world. Such flatteners include the fall of the Berlin Wall and Netscape going public, among others. He also reorganizes ten flatteners as “three convergences.” The current paper lays emphasis on ways “three convergences” affect decision making and the application of Friedman’s nine rules in a company setting. Furthermore, it succinctly substantiates Friedman’s assessment of Fiorina’s capabilities.

“Three Convergences” and Decision Making

In a company setting, the “three convergences” will affect the organization because the latter will not only have to rely on technological advances but also to focus on other ways of doing business. This will increase the productivity because, in a flat world, all companies have similar competitive advantages, thus heightening the competition (Friedman, 2008). In this regard, the introduction of computers in offices is less likely to improve productivity if the management does not reconfigure how the company does business. New methods are encapsulated by horizontal decision making that entails collaborating with other departments and companies, hence fostering value creation and innovation. Similarly, embracing a horizontal chain will ensure that the company focuses less on the chain of command per se and more on the collaboration, thus enhancing decision making. After all, new ways of doing things make information technology valuable while technology makes it easy to explore other ways of doing business. However, the manner in which the company collaborates and manages horizontally necessitates a different set of skills.

The “three convergences” will also affect decision making because the organization will take advantage of the flat world and access raw information and collaboration tools (Friedman, 2008). Access to information has been made easier because one has an ability to use various search engines and the web to access raw information from billions of pages. This will enhance competitiveness and enlighten the company on better decision-making strategies. In fact, the competitiveness will stem from the fact that there are multiple forms of collaboration, knowledge sharing, and work in real time. This takes place regardless of geographic location and improves productivity. The triple convergence will also affect the company because it will give it the impetus to explore new ways of doing business to compete with the people of China, India, and Russia (Friedman, 2008).

The company will also have to ensure that those joining its new workforce exhibit the relevant education and connectivity, which enables them to compete and collaborate at a meaningful level. Such a workforce will be an asset to the company because, with the flat world, information is easily available to everybody but will only benefit those who develop skills and habits quickly (Friedman, 2008). For this reason, individuals who are well acquainted with the flat world will drive globalization.

What is happening now is a small, noticeable part of the issue because there is a fundamental shift that will revolutionize how people do business. Therefore, even though the triple convergence will have a significant impact on how the organization runs, it will take time before aligning new business practices with the new playing field. In fact, the world has now become a football field and companies ought to be sharp to know the teams playing in this field. Those who are not competitive enough will be sitting and watching the game. The IT revolution will use technology to transform literally every aspect of the society, life, and business.

Application of Friedman’s Nine Rules in a Company Setting

In the flat dynamic world, companies should be able to change by conforming to nine rules outlined by Friedman.

• The first rule is doing what can be done when the world is flat. In this regard, managements should question whether it would be done to them or by them (Friedman, 2008). This gives an impression that one should always implement their ideas as soon as they have them lest someone else implements them. In the flat world, all individuals have equal access to information and can turn their great ideas into successful businesses. In this regard, the direction my company should follow is to encourage innovation and embrace a horizontal decision-making model. Such a model will enhance the collaboration among all staff members, thus making it easy to implement any new ideas that will improve the consulting company.
• The second rule is that the most important competition is between a company and its imagination as opposed to one country and another (Friedman, 2008). In the flat world, the ability to imagine is not a commodity. What matters most is the spark of the idea. For example, my company will thrive if the management creates an infrastructure that encourages individual imagination. In fact, the company can only be successful in the flat world if it stretches its employees’ imagination, as this would maintain constant innovation. The consulting company can focus on brand innovations because improving the brand can be a major selling point for consumers. Doing the right thing at the right time will also foster the brand development that will be appreciated by clients. In fact, this will attract a greater number of international clients.
• The third rule is acting big by taking advantage of new tools for collaboration in the quest of reaching a wider market faster (Friedman, 2008). In this regard, sheer imagination is not enough to propel a company to greatness if it does not utilize tools available. For example, the consulting company will consider collaborating with other global consulting companies to increase its customer base and promote brand awareness. In this respect, mergers and acquisitions can be a good idea because they will increase the scope of operation. Therefore, in the flat world, a small business should not constrain its abilities by looking down on bigger corporations in the same industry (Gulati, Mayo, & Nohria, 2016). Moreover, in the flat world, the key for small businesses is collaborating with big established companies to discover new ways of doing things.
• The fourth rule is for big companies to learn how to act small and enable their customers to act big (Friedman, 2008). The common mistake most companies make is forgetting they need customers after making them big. This gives an impression that the triple convergence gives corporations a platform to collaborate with their customers in a new fashion (Hegar, 2012). For example, the consulting company can provide an array of services to incorporate all customers in need of consulting services. In addition, the company should lay emphasis on customer feedback and consider suggestions and comments left by clients. Conforming to customer’s needs and suggestions is an equivalent of enabling clients to act big, which is necessary in the flat world because customers are the most important stakeholders. In this regard, the company tries to make its business a buffet and allow customers to serve themselves in their way and at their time.
• The fifth rule stipulates that the best companies are the best collaborators because more businesses can only be done through collaboration (Friedman, 2008). The layers of value creation in technology are becoming intricate and complicated, thus making it difficult for single firms or departments. The flat world has different fields that encapsulate an intersection of advanced specialties. A valuable breakthrough can, therefore, be achieved when various corporations collaborate to combine different granular specialties (Gulati et al., 2016). For example, the consulting company can adhere to this rule to become a world player by collaborating in service provisions. However, the company has to be disciplined in what it can provide and undertake.
• The sixth rule dictates that companies in the flat world should stay healthy by making regular chest X-ray and selling the results (Friedman, 2008). This implies that a company should always assess its capabilities and digress from activities that do not add value. For example, the company can break down different components of its business and analyze its corporate skeleton. This will involve breaking down every department and function in the organization and determining whether it is an expense or a source of income. Subsequently, the company will not engage in activities and tasks that can be easily outsourced. Similarly, the company will also outsource specific functions if it lacks internal skills to execute such functions at the highest level. This will free up funds and give the consulting company an ample chance to focus on its core competencies (Gulati et al., 2016).
• The seventh rule stipulates that businesses in the flat world should outsource with an ulterior objective of increasing the scope of operation and gaining market share (Friedman, 2008). It would be inappropriate if companies consider outsourcing with an aim of taking advantage of cheap labor. However, a company can realize the needs of outsourcing only when it is ready to grow its business. For example, the consulting company can outsource some of its functions by outsourcing employees who work with international clients. For instance, if the company has different clients in India, then it would make sense to outsource the consulting activities of Indians to respond to such clients. This will increase the customer base because the Indian clients will think it is an Indian based company while Americans will also think that it is an American based company.
• The eighth rule of business in the flat world is how a corporation handles its major stakeholders such as suppliers, colleagues, and investors (Friedman, 2008). In fact, a company can differentiate itself from competitors on the premise of how it relates to these stakeholders. Customers have much power and companies should strive to use this power to their advantage. For example, the consulting company can embark on building trust and reliability with its stakeholders, which is the basis of improving stakeholder relations. The company will also provide exemplary services in the quest of meeting all the customer needs satisfactorily.
• The ninth rule is reaching for a shovel and digging inside oneself without trying to build walls (Friedman, 2008). This implies that companies should realize the need for change and act on it as opposed to resisting it. Flattening of the world takes place so fast that companies should wrestle with how to adjust because of the increasing competition and pricing pressures. Commoditization is also taking place in the wake of the triple convergence, which gives clients too many options from which they can choose. For this reason, the only viable strategy is taking a shovel and determining the core competencies instead of building a wall and being oblivious to the flattening world. This is unlike the old days when companies hid behind the technologies (Gulati et al., 2016). A company could be successful without necessarily competing on the global platform. For example, the consulting company can keep up with the flattening world by outsourcing more technology pieces and hiring more thinkers. This will equip the company with innovations that will not only enable it to compete with firms down the street but also organizations across the globe. Overlooking this rule will constrain the consulting company to its old walled patterns of business (Friedman, 2008).

Friedman’s Assessment of Fiorina Capabilities

Carly Fiorina’s predicament gives an impression that managing a company at its highest levels requires more than thriving in the flattened world. A company can strive to keep up with the advancements in technology but this will not translate to profit if the company does not change how it does business. Fiorina laid emphasis on the digitization of content and high-speed transmissions (Gulati et al., 2016). She also pointed out that the vast majority of innovations from Hewlett-Packard (HP) came from horizontal collaboration among various departments. This shows that she was trying to align her company with the flat world by using the nine rules stipulated by Friedman. However, this did not guarantee the efficacy in granting HP a competitive edge because managing a company at its highest level calls for due diligence as any mistake can adversely affect the company’ performance, especially in the flat world. This can be attributed to the fact that there are many competitors in the market, which deprives one of trial and error methods to propel the company forward (Hegar, 2012). If the customer satisfaction is compromised, then consumers will resort to similar products but from a different organization that they feel addresses their needs (Gulati et al., 2016).

Friedman was not wrong in his assessment of Fiorina’s capabilities because he tried to relate how she aligned her strategies to the flattened world. For instance, Fiorina strived to collaborate with other major players in the industry to increase the company’s competitive edge. An example is merging with Compaq. In addition, this approach was in line with Friedman’s triple convergence. However, the merger failed to yield the expected results because HP lost its market share and could not revive its profit margins. Fiorina had also outsourced various activities to overseas tech workers by moving different jobs offshore (Hegar, 2012), including engineering activities and call center operators. Again, this was in line with the seventh rule of businesses that strive to survive in the flat world. It, therefore, follows that even though Fiorina tenure is considered a flop, she actually spearheaded different strategies with an aim of yielding positive results. However, the negative results give an impression that some of the methodologies the company used to orchestrate these strategies might have been the issue (Gulati et al., 2016).

herefore, it is the management style that led to her demise and not the strategies she implemented.
Fiorina was overwhelmed by events because everyone was anxious about her abilities to transform a plodding technology giant to a nimble innovator. She was also confronted with the pressures of making the corporate giant profitable as she had promised, which explains why she embarked on many different strategies such as layoffs and major reorganizations (Hegar, 2012). People were also anxious about the strategies she would implement to slash costs and boost revenue. Therefore, it seems that she was offering more style than substance in the course of her tenure. Under her management, HP was a contender in both sides of the spectrum because it was competing with Dell’s low-cost commodity and IBM’s higher-end commodity. However, the company was not successful as it focused on too many things at the same time. Even though the stock prices started rising after Fiorina left, the new CEO, Mark Hurd, was executing strategies introduced by Fiorina (Hegar, 2012). In this regard, Fiorina was not the greatest CEO in the corporate history but she was not the worst either. She failed to acknowledge that when one collaborates and manages horizontally, they would require a different set of skills and mannerisms of doing things (Gulati et al., 2016). This shows how Fiorina was overwhelmed by events and forced to fall on her sword.

An analysis of what transpired at HP and Friedman’s glorification of Fiorina gives an impression that his theories are a double-edged sword because they are a blueprint of what direction a company in the flat world should follow. However, Friedman does not substantiate the esoteric factors that a company ought to consider when embracing different strategies. For this reason, a company might be in the right direction but this does not guarantee the success or failure because it depends on the strategies used by the management (Friedman, 2008). HP is a good example because the company was in the right direction but used different strategies. Therefore, Friedman’s theories are not just theories because a company can be successful if it uses theories and adheres to a more viable strategy. Furthermore, Fiorina took over HP in 1999, which was at the height of the tech boom. She, therefore, tried to take advantage of the boom and propel the company forward even though she was not successful. Moreover, her strategies were a step in the right direction because HP is a global company that should always come up with new inventions and innovations lest competitors in the flat world overtake it. After all, the company was made great by innovations and new product development and this is what will make the company great again (Gulati et al., 2016). Therefore, Fiorina was on the right track. This is an apt example of what happens in the flat world when a company embraces technology without devising new ways of doing things.

In regards to the predicament, my views are that Fiorina digressed from some principal theories stipulated by Friedman even though he did not bring that to light. For instance, according to Friedman, an organization in the flat world should conform to horizontal mode of management that pays less attention to hierarchy. Even though Fiorina tried to embrace this strategy, her relations with board members were questionable, as she had always made decisions without intense consultations. As a result, the board members did not come to a consensus. For instance, Walter Hewlett, a board member and son of the company’s co-founder, opposed taking on Compaq but Fiorina was oblivious (Hegar, 2012). In fact, major stakeholders and outside observers felt that this would dilute the printer business, which is the core of the company. Eventually, the decision had major ramifications because it resulted in the dismissal of about 17,000 workers and led the company into a tailspin (Gulati et al., 2016). However, Friedman did not accentuate this issue as he only focused on how Fiorina took advantage of technological advancements. From a general perspective, Fiorina tried to save HP by taking advantage of technology boom but her efforts were futile. However, this does not deprive her of her credibility and proficiency as a CEO because it would be inappropriate to judge her by her HP tenure per se.

Conclusion

Friedman’s book has been enlightening on the dynamics of the flattened world and the strategies that organizations ought to undertake to be successful in such an environment. He also addresses how the world became flat by explaining the ten flatteners and the dynamics of the triple convergence. In fact, the world would not be flat were it not for different flatteners such as the fall of the Berlin Wall. Similarly, the triple convergence revolves around how the world became flat and changed the playing field. Companies in the flat world face higher levels of competition, thus compelling them to embrace innovation to attain a competitive edge. Businesses that understand the dynamics of triple convergence and flattening of the world have instigated innovative projects to compete in the flat world.