Saturday, November 15, 2008

Surfs Up-Corporate Tsunami




Having read Alvin Toffler's book, The Third Wave, and participated in many discussions over the years concerning his futuristic claims, I pulled his book out this morning and was re-reading some of his points on corporate identity. I couldn't readily remember the particulars when it came to corporations as we traveled out of one era into the next.

Toffler notes that the most immediate change which will affect the corporation will be a crisis in the world economy. Corporations thrived during the Second Wave as they created an integrated global marketplace, but a global crisis will bring a global need to redefine the corporation. The simultaneous emergence of gross inflation along with increasing unemployment will begin to take corporations to their knees. New technology with it's new levels of communication will add to the destruction of corporations as we know them. It's not about socialism over capitalism, but as Toffler believes, it will be the general crisis of industrial civilization as a whole.

Toffler predicts this upheaval in the world economy will threaten the survival of the corporations and will throw it's managers into a wholly unfamiliar environment. During the second wave, the financial structures put in place at Bretton Woods by the capitalist world powers were solid, and the rise to affluence was steady. The financial economists were confident in their free market and their abilities to predict and control the economic machine they had built. But then came the new technology that allowed faster communication and this began restructuring in the world markets. A global world banking network grew with the use of technology which allowed the sprawling global bank networks to create a sort of stateless currency which was outside of any world government's control and oversight.

According to Toffler, the Second Wave economic system saw the corporation grow up based on national markets, national currencies, and national governments. This nation-based infrastructure, however, is utterly unable to regulate or contain the new transnational and electronic currency bubble. Now the entire global framework that once stabilized world trade relations for the giant corporations is crumbling and in danger of coming apart. The World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade are or will come under attack. As I'm writing this, the world financial leaders, G-20, are meeting in Washington D.C. in order to attempt to find a solution to their financial system's meltdown.

Toffler mentions that the Europeans will scramble to bolt together a new structure to be controlled by them. The less developed countries on one side and the Arab countries on the other will clamor for influence in the financial system of tomorrow and we will begin to hear talk of creating counterparts to the International Monetary Fund. The dollar will be dethroned and the world economy will go through jerks and spasms quite similar to the dying rattles of the millions of people their system has destroyed.

In his book he mentions after these preliminary effects, corporations will have no wish to relinquish corporate power, and will continue to battle for profits, production, and personal advancement. However, faced with soaring levels of unpredictability, with mounting public criticism and hostile political pressures, the managers of the corporate systems will begin to question the goals, structure, and responsibility of their organizations. Can Toffler be right? Are his insights into this new age accurate. It would seem from what I've read, that he isn't too far from the mark so far.

Farther into Toffler's predictions, he mentions the redefining of the corporation. The corporate identity crisis will deepen due to emergence of a worldwide movement demanding not merely modest changes in corporate policy, but a deep definition of it's purposes. In the past, critics of the corporations leveled their scrutiny on the entities, but they were willing to accept the corporations per their own definitions. The critics of old shared the view of the corporations as an inherently economic institution. Today, we see the corporation's critics attack them for their artificial divorce of economics from politics, morality, and other dimensions of life. The corporations are being held responsible for not just their economic failures, but also their links to pollution, poisoning, racism, sexism, and their deceptions of the populations of our world. They are targeted for their support of our unsavory regimes in under developed countries across the globe, and for using poor populations as guinea pigs in their drug testing. The world view of corporations has dramatically changed during my life time, and I have no reason to believe we will not see what Toffler talks about when it comes to a push for a new corporate identity.

Toffler mentions the Third Wave will bring with it a rising demand for a new kind of institution altogether. He speaks of a corporation that will no longer be responsible for only profit and the making of goods, but one that will contribute to the solution of extremely complex ecological, moral, political, racial, sexual, and social problems. The corporations prodded by criticism, legislation, and it's own concerned executives, will become a multipurpose institution.

All I can say is..."Surfs Up!"

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