A fundamental shift is occurring in the world economy. We are moving rapidly away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture, and business systems. And we are moving toward a world in which barriers to cross-border trade and investment are tumbling; perceived distance is shrinking due to advances in transportation and telecommunications technology; material culture is starting to look similar the world over; and national economies are merging into an interdependent global economic system. The process by which this is occurring is commonly referred to as globalization.
Correspondent: Globalization has been one of the most important factors to affect business over the last twenty years. How is it different from what existed before? Companies used to export to other parts of the world from a base in their home country. Many of the connections between exporting and importing countries had a historical basis. Today, to be competitive, companies are looking for bigger markets and want to export to every country. They want to move into the global market. To do this many companies have set up local bases in different countries. Two chief executives will talk about how their companies dealt with going global. Percy Barnevik, one of the world’s most admired business leaders when he was Chairman of the international engineering group ABB and Dick Brown of telecommunications provider Cable & Wireless.
Cable & Wireless already operates in many countries and is well-placed to take advantage of the increasingly global market for telecommunications. For Dick Brown globalization involves the economies of countries being connected to each other and companies doing business in many countries and therefore having multinational accounts.
Dick Brown: The world is globalizing and the telecommunications industry is becoming more and more global, and so we feel we’re well-positioned in that market place. You see currency markets are more global tied, economies are globally connected, more so nowadays with expanded trade, more and more multinational accounts are doing business in many, many more countries. We’re a company at Cable & Wireless now, well-positioned to carry the traffic and to provide the services to more and more companies that now need to get to five countries or twelve countries, we’re often there.
Correspondent: When Percy Barnevik became head of the international engineering group ABB, his task was to make globalization work. He decided to divide the business into over a thousand smaller companies. In this way he believed the company could be both global and local. In answering the question “How do you make globalization work?”, Percy Barnevik describes the “global glue” that keeps the many different people in ABB together. He then looks at the need to manage the three contradictions of company: it is decentralized but centrally controlled, it is big and small at the same time and it is both global and local.
Percy Barnevik: We have now for ten years after our big merger created a “global glue” where people are tied together, where they don’t internally compete, but support each other, and you have global leaders with global responsibility and your local managers working with their profit centers, and if you have the right, so to say, agenda for these people and the right structure, you can use a scale of economy and your advantages of bigness but being small. We used to say you have three contradictions: decentralized and still centrally controlled, big and small, global and local, and, of course, to try to make these contradictions work together effectively, then I think you have a big organizational competitive edge.
Correspondent: Globalizations can bring advantage to a business, but how does a company go global? Dick Brown mentions three ways companies can achieve “globalness”. Firstly, companies can work together in alliances. Secondly, they can acquire or buy other companies, and thirdly they can grow organically by expanding from their existing base.
Dick Brown: Well, as you go global, and a handful or more of companies are going to really push out, in my view, to be truly global companies, and some of them, maybe all of them, will also work to be local. They’ll be local in chosen markets and global in their ability to carry their customers’ needs from continent A to continent B. We want to be one of the companies that’s both global and local. Alliances are one way to be global, it’s not the only way to be global; you can acquire your way to “globalness”, you can organically grow your way to “globalness”, you can have alliances which help you get global quicker, so you take your pick.
Percy Barnevik: You have to start from the top with local people who understand language, culture and so on, and I think in this global world where the East is coming up now, that’s a winning recipe.
Correspondent: ABB already found the winning recipe. Its theory of globalization has become the company’s working practice. So how do you make theory work in practice? Percy Barnevik believes that successful globalization involves getting people to work together, overcoming national, cultural barriers and making the organization customer-driven.
Percy Barnevik: You see the easy thing is to have the theory, but then to make the systems work, to make people really work together, to trust each other — Americans, Europeans, Asians, to get over these national cultural barriers and create a common glue, ABB, and then make them customer-driven. If you can achieve that, and create that culture deep down then I think you have an important competitive edge.
Correspondent: What Dick Brown and Percy Barnevik have shown is that there are different routes to globalization and that companies have to work hard to succeed in going global. Actually one of the disadvantages of the Global Strategy is that integrated competitive moves can lead to the sacrificing of revenues, profits, or competitive positions in individual countries — especially when the subsidiary in one country is told to attack a global competitor in order to convey a signal or divert that competitor’s resources from another nation. The challenges managers of transnational corporations face are to identify and exploit cross-border synergies and to balance local demands with the global vision for the corporation. Building an effective transnational organization requires a corporate culture that values global dissimilarities across cultures and markets.
通讯记者：全球化已经成为过去二十年间影响商业贸易最重要的因素之一。全球化与其之前的体系有何不同？以前企业习惯于从本国基地向其他国家出口产品。许多出口国和进口国之间有着深深的历史渊源。如今，为了更具竞争力，企业着眼于寻找更大的市场并想向所有国家出口产品。他们希望融入国际市场。许多企业为了达成这个目标在不同的国家都设立了基地。两位首席执行官将就他们的公司如何处理全球化的问题展开论述。他们其中一位是Percy Barnevik，曾任国际工程公司ABB主席，是全球最受赞誉的商业领袖之一；而另一个是来自电信供应商Cable & Wireless的Dick Brown。
Cable & Wireless在多个国家开展业务，并已通过妥善地部署基地而在日益增长的电信业全球市场中取得了优势。对Dick Brown而言，全球化意味着不同国家的经济体相互关联，公司在不同的国家开展业务并因此形成了跨国企业。
Dick Brown：整个世界都在走向全球化，而电信产业也正变得越来越国际化，正因为此我们觉得自身在这一市场中拥有不错的优势。如你所见，货币和金融市场的国际关联越来越紧密，如今这些市场随着飞速膨胀的交易量而不断扩大，越来越多的跨国公司在无数不同国家间进行着商业往来。我们是Cable & Wireless旗下的一家公司，我们精心选址以为越来越多的其他公司提供带宽和服务，这些公司现在要和五个或十二个国家打交道，而这些国家中通常都有我们的身影。
通讯记者：当Percy Barnevik成为国际工程公司ABB的首席执行官时，他的任务即是梳理全球化工作。他决定将组织分为一千个多小公司。他相信籍此公司能同时实现全球化和本地化。在回答“如何开展全球化工作”的问题候，Percy Barnevik提及了“全球凝胶”的概念，即将ABB中数量庞大且各不相同的人们融合到一起。随后他开始关注如何协调公司三个矛盾焦点：公司去中心化的同时又能实现统一管理，公司既是统一的大公司又是分散的小公司，公司既是全球化的也是本地化的。
通讯记者：Dick Brown和Percy Barnevik向我们展示了通往全球化的不同途径，企业必须要励精图治以期在走向全球化的道路上获得成功。但事实上全球化策略有一个不足之处，经通盘考虑后的竞争决策会导致在个别国家中的子公司年收入、利润或竞争地位下降，尤其是为了向竞争对手示威或者将其资源从他国转移，而勒令某国的子公司对竞争对手发起商业冲击。国际公司经理们所面临的挑战在于识别和发挥跨国子公司间的协同合作效应，并在为公司全球化着想的同时兼顾本地需求。构建一个高效的跨国公司需要企业文化的支持，这种企业文化应尊重各国在文化和市场方面的不同之处。
The original (Chinese to English):
My translation work:
Will the traditional department stores become a “vanished business”
Statistics reveal that the scale of E-commerce in China has reached seventy trillion RMB in 2011, a year-on-year growth of 46.4%. This brilliant achievement makes it a great challenge for the traditional department stores to compete with the E-commerce vendors for competing the market share. More and more people would prefer online purchases, but meanwhile the needs of the customers remain the same in short term, so all these lead to the fact that the department stores have lost their customers respectively. Business insiders say, in recent years the traditional department stores have experienced a dramatically sale drop over those which are convenient for online purchase, such as appliances, IT products, textile and even luxuries.
In the meantime, it’s quite awkward that some traditional department stores have fallen to the category of “fitting rooms”, which only benefit the E-commerce vendors. Lots of people went to the real-estate stores to make sure of the proper style, size or something else, then went back home and bought online. For such reasons, they’re often be referred to “size-checker” and “sneak-photographer”. Now the market of online purchase has become bigger and bigger, clothes, cosmetics and housewares are all involved, customers choose to browse items in stores and pay them online.
The E-commerce vendors has stepped into the market and taken a big share of it. Besides that, business inside the traditional department stores also have vehement competitions, which are due to the serious homogeneous. In recent years, cities all over the country have made great effort to build up shopping malls, since the competition has already existed between the traditional department stores, those shopping malls have only made the already tough situation even worse. Walking along the urban business street districts, nearly all the department stores look alike, no matter the items for sale, the design for the shop or the layout of the products. A doctor once said, from Beijing to Fuzhou, the stores in all the cities are similar.
In such a dilemma, will the traditional department stores become a “vanished business”? Quite a few experts have given their opinions that though the traditional business of the department stores have experienced great pressure, there are still opportunities for them to reverse the adversity into success. What they should do is to integrate online and offline resources, show differentiated competitive capacity, figure out commercial innovation and so on.
It was learned the department stores which put their business online are not the minority. Since 2012, big department stores in Beijing, one after another, have set their E-commerce platforms online. Those in Tianjin are scheduled.
Also, the department stores should provide their customers with differentiated products and apply specified sale strategies for them. A Ph.D supervisor emphasizes that though the department stores have struggled in this tough commercial situation these years, the customers which they have lost were just a small part compare to the total clientèle. The department stores should now full-heartedly exploit the customers who they still hold, and then improve the after-sale service and provide personalize services for each customer.
In addition, the development of shopping malls provide a great opportunity for the traditional department stores to make transition. It was learned that there are certain rules between the constituion of retail business and GDP per capita. The supermarkets are dominant when GDP per capita between $3,000 to $5,000, while shopping malls, exclusive shops, professional stores and convenient stores prevail when GDP per capita hits between $5,000 and $10,000. In 2011 the GDP per capita has already exceed $5,000 in our country, the traditional department stores can now take the chance to transform to shopping mall and something alike.