A credo among successful players in the business world is: ‘Either we take hold of the future, or the future will take hold of us.’ Anticipated trends in future globalisation can be explained by the acronym FUTURE, which derives from the ideas associated with the following concepts: Fast, Urban, Tribal, Universal, Radical and Ethical (Dixon, 2000). Dixon argues that these concepts will have increasing impact on the environment within which service providers operate. These concepts can be summarised individually as follows.
Fast
The notion of ‘fast’ refers to the rapid acceleration of economic, political, technological and social changes. As experienced on 11 September 2001 and again on 12 October 2002, with the terrorist attacks on New York and Bali, the environment within which one operates can change profoundly within a short period of time. Hence, market research (see Chapter5) cannot predict the future in a rapidly changing world – it just indicates what consumers think now. Business success requires a wider and longer vision. The impact of the digital society, networking, e-commerce, virtual reality and speech recognition technology also continues to change consumer behaviour. In the communications industry, the functions and attributes of mobile telephones render an instrument as technologically ‘old’ after six months. This rapid redundancy, in turn, impacts on pricing. The decision to purchase an instrument with specific functions at a specific price will inevitably be regretted a few months later when a newer version, with more functions, is available at a lower price. Similarly, communication via digital technology is adopted by some universities as a mode of keeping students and staff continuously informed. As a result, investment in university buildings beyond the reach of a diversely located, but digitally connected student body is less useful, and hence, may be classed as inefficient, or even obsolete, in the newly set tertiary education environment. The question for services is: How will people adopt, adapt and survive accelerating change?
Urban
Big demographic and social shifts affect every aspect of consumer behaviour with, for example, the increasing ageing and wealth of sectors of urban populations. The competition for talent, the increased numbers of women in the paid workforce, the growth of mega-cities, and a host of other factors, will have additional important effects on the dynamic nature of markets for services. Population decline and the lack of opportunities in rural and remote locations con- tribute to market decline. Services are often driven by economies of scale. Setting up hospital facilities, or specialised medical services, is dependent on the number of patients in need of these services. In a country like Australia, with a small population density in rural areas, the availability of specialist medical services is concentrated in larger cities, and so in response to low demand for services some smaller towns have visiting dentists and optometrists. These market-based societal characteristics are fundamental in determining the future shape of ser- vice delivery and availability. Decisions on the provision of service delivery sometimes have
to be based on the reconciliation of often-competing public interest and profitability objec- tives. In rural areas, profitability may need to be subsidised, or reduced, while the large scale of the market in urban areas implies automatic returns.
Tribal
While an increasingly globalised world presents a homogeneous (shared) view of reality, tribalism presents heterogeneous (diverse) community views. Tribal communities may share collective values and behaviours based around ethnicity, religion, and other socio-cultural demographic factors, such as age, gender, occupation and interests, Tribalism is a powerful worldwide force. Tribalism underpins hundreds of conflicts and tensions across the world. The ongoing conflict between Catholics and Protestants in Northern Ireland, the language differ- ences between English and French Canadians, and the ethnic differences between Chinese, Indian and Bumiputera (indigenous) Malaysians, are simple examples of the diverse commu- nity identity issues associated with tribalism.
For service providers, the specific marketing opportunities of tribalism can be a huge positive force. Niche branding and product/service loyalty strategies reflect the marketing opportunities tribalism presents (see Chapter 5). Every successful service creates a ‘tribe’, and every successful organisation thus becomes a ‘tribe’ on its own. For example, loyalty towards Holiday Inn hotels as a brand will inevitably be built on customer perceptions of sus- tained good service, which in turn ensures future bookings around the world (see Chapter4). Knowledge of tribalism can be used to productively build strong teams, corporate identity, people movements and product lines. The key to successful mergers is to understand the role and impact of tribal culture and tribal leadership. In developing the tribal logic underpinning the corporate culture and leadership model of the Virgin brand, Richard Branson seeks to ensure that the staff have a positive attitude towards their employer and customers, and this sets Virgin apart from other service providers in the travel, communications and financial services.
Universal
The establishment of global super-brands creates pressures to manage global operations more effectively on a uniform logic by using new technologies and the emergence of virtual teams and companies. Daylight is the largest barrier to a universal 24-hours-a-day operation model for the global village. Globalisation alters the shape of all large corporations as competitors realign through rapid mergers, acquisitions, disposals or new partnerships. In this context, diverse reactions to globalisation in its current form need to be understood. Although tradi- tionally multinationals are perceived to be producers of goods, services has increasingly also turned into a universal environment. After almost 50 years in business, Andersen Consulting changed its image to the global corporate image of Accenture. This image change is sup- ported by a larger scope of services offered. Accenture is positioning itself as a ‘one-stop shop’ for multiple business services. Operating on a similar universal corporate basis, investment banking institutions now hold property interests around the world and act as landlords in the provision of office space and facilities.
The adoption of universal operation systems facilitated by new technologies creates convenience and opportunities, and builds business efficiencies. However, managers need to be aware of the cultural implications of applying universal systems in diverse operational
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contexts. For example, there is widespread acceptance of English as the language of inter- national business. English may be accepted as the official global language, but in reality diverse forms of ‘English’ are used around the world. This pluralistic linguistic reality has signifi- cant implications for communications management, stakeholder management, competitive advantage, operations, marketing and HR management. The universal application of knowl- edge and information systems has similar intercultural management implications. Hence, it is critical for services managers to understand the cultural assumptions (predominantly Western) underpinning the universal business systems operations in order to be able to assess their efficiencies and effectiveness when applied in different locations.
Radical
The decreasing differentiation between left and right politics, and reduced government power, make corporations increasingly vulnerable to a growing number of radical single-issue groups. The rising number of radical and resistive single-issue groups has resulted in the cooper- ative development of powerful, but often disparate, community-based interest and non- government organisation (NGO) pressure groups. Their radical activities, also facilitated across time and space by digital communication technology, have significant implications for the management of services. Examples of radical interest groups include: genetic engi- neering and biotech foods, animal welfare and cosmetic product testing, child labour in the textiles industry, and unfair coffee trade with developing nations (pro-fair, not ‘free’ trade). In September 1999, more than 50 years after the end of the Second World War, the Simon Wiesenthal Center in Los Angeles announced a claim for Holocaust restitution. Under these claims, Swiss, Swedish, French and British banks and insurance companies were said to be responsible for illegally controlling financial assets forcibly turned over by Jews to the Gestapo. In response to this legal outcome, the Swiss Bankers Association (Swiss Bankers Association, n.d.) established a claims process in 2001 providing an opportunity to make claims to assets deposited in Swiss banks in the period before, and during, the Second World War.
The radical elements in the business environment must be addressed by services managers. These radical elements represent important stakeholder management issues (see Chapter 3), which have implications for risk management. Settlement of the 50-year-old case presented above indicates the longevity of risk implications for managers. However, knowledge of the radical elements in the global community can also present services with corporate marketing opportunities as being businesses that promote ethical, environmental, and sustainable products and services which, in turn, can create competitive advantage (see Chapters4and5). Thus, it is important to remember that while in some instances radical community elements represent resistance to change, the activities of other radical groups may promote positive change and innovation that offer new value-adding business opportunities.
Ethical
Personal values, ethics, motivation and spirituality are all value issues that are becoming key concerns for large corporations. Retaining and motivating key executives needs more than money. The start of the 21st century has seen the collapse of a number of huge service institu- tions, such as Enron in the United States and HIH in Australia. The collapse of these service businesses has been attributed to the prevalence of unethical corporate behaviour. There are now calls for corporations to inspire, encourage and build a sense of family, even a better
world. What is coming next? Where do corporate values come from, and what are global ethics? The key to success is to be able to show how your services contribute to a better kind of world, not only for individuals and their families, but also for the community-at-large and the whole of humanity. Thus, there is now increasing pressure on business to adopt the sus- tainability ‘triple-bottom-line’ (economic, social and environmental) corporate performance assessment approach. This reality has significant implications for stakeholder management in services (see Chapter3).
Most businesses see the world as fast, urban and universal – but how many people in a nation need to be radical, ethical and tribal in order to change their world? Some financial advisory services are now specialising in ‘ethical’ investment portfolios. Organic food pro- duction and services represents an important growing sector. Industry partnerships are being established with indigenous Aboriginal communities in Australia, who are developing sus- tainable indigenous natural resource-based enterprises to serve an increasingly sophisticated international urban cuisine and cosmetic market. The telecommunications industry realises that economies of scale can only be derived from a healthy market segment, reliable and speedy service, and a global network. However, few have yet gone so far as to segment the market, worry about health and privacy concerns, and develop and promote voice transmis- sion via the Internet. These examples highlight the importance of services managers being able to assess the positive and negative ways in which radical, ethical and tribal issues may impact on their particular services.