Maja Zelihic, PhD, program chair for the Master of Arts in Organizational Management, provides an analysis of a global business arena with some of the most powerful players emerging as creative powerhouses and outcompeting each other; the competitive cycle creates a sense of perceived uncertainty as to who the all-time ruler of the emerging global business empire is going to end up being. In the first article in her two-part series, Dr. Zelihic warns of the dangers of creative fatigue and complacency among companies who are seemingly unchallenged by others in the field.
Historical Impact of Creative Fatigue
As WWII was nearing its climactic end, one of its last casualties, the British Empire, was slowly dying. Long gone were the days, beautifully depicted by George Macartney, of the “vast empire on which the sun never sets, and whose bounds nature has not yet ascertained” (as cited in Kenny, 2016). Britain’s famous East India Company was no longer monopolizing the world trade, losing the throne it held ever since its creation in December 1600.
Disruptive companies are not only competing but leaping ahead in the race.
At its peak, the company was incomparable in its mighty power to any of the business giants of today, venturing out of its designed core competencies into an entity that controlled Britain’s political scene and serving as its imperialistic agent (Our Heritage, 2017). Some of its lessons remained in place for the world of business to follow up to the present day. As history’s first joint stock operation and limited liability organization, the East India Company left us management concepts such as merit-based appointments and expectation-setting contracts; seemingly simple on the surface but pivotal for the operations of a modern global service.
Despite its former glory, as the last celebratory dances of post-WWII Europe were dying out, the British Empire was too fatigued to keep up with the world around it—exhausted from the war operations and loss of its colonies in Asia. The aging empire finally gave up its power, paying a high price for complacency in the years between the two wars when the US slowly started taking over through its investment in technology and innovative spirit. If we learned anything from Britain, it is this: complacency and creative fatigue can cost any nation dearly.
Tech Giants & Competition
In considering the current landscape of business, particularly Amazon, it is this author’s opinion that the Chinese tech giant Alibaba, emerging as the world’s largest e-commerce company, threatens Amazon’s current position. The market’s trust in Alibaba is explained clearly by Ray (2017). “Yahoo’s 15% stake, totaling 384 million of Alibaba’s common shares, are worth $53.7 billion,” the author explains (para.4). Yahoo’s co-founder Jerry Yang bought the stake for $1 billion in 2005, in exchange for a 30% ownership of Alibaba (Olson, 2014). The tables have turned significantly with Alibaba’s consideration to acquire Yahoo in recent years. Yang had a tremendous vision recognizing Alibaba’s worth, but other Yahoo executives did not. In 2012, “Yahoo’s board agreed to sell 523 million Alibaba shares, half of its stake, back to Alibaba at $13 apiece” (Olson, 2014). While Yang had enough sense to walk away with his shares, the same cannot be said for the other executives in the boardroom that day.
No Longer Competing but Leaping Ahead
Alibaba is an e-commerce giant that uses China’s biggest obstacle, the lack of retail infrastructure, to its advantage by offering B2C, C2C, and B2B platforms for a one-stop shopping experience (Hiner, 2016). Any resemblance to Amazon is not coincidental. Alibaba’s increasing presence in the marketplace gives credence to warning Amazon of Alibaba’s journey, encouraging Amazon to fight complacency at each level of its operation.
Alibaba is not the only Chinese “trailblazer” on the global business scene. We can observe that “disruptive companies that are not only competing but leaping ahead in the race,” as Baidu, Tencent, JD.Com, and Huawei carve out bigger stakes (Hiner, 2016). One theme emerges: China is not aiming to imitate the US business model when it comes to some of its signature products. Chinese companies are not venturing to make existing platforms better; on the contrary, their “no excuse approach” to innovation and disruptive creativity forges new product offerings fitted for their market needs.
If the US doesn’t want to lose the superpower status in global business, we cannot help but note that Chinese products often exhibit superiority in scope and effectiveness. It seems that it is just a matter of time before those products replace some “powerhouses” of the Western hemisphere.
As this article comes to a close, we encourage you to follow along with the series and explore the foundations of organizational management and international business.
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Written by Dr. Maja Zelihic, Program Chair for the Master of Arts in Organizational Management in the Forbes School of Business & Technology™
References
Macartney, G. (1773). An Account of Ireland in 1773 by a Late Chief Secretary of that Kingdom. p. 55.; cited in Kenny, Kevin (2006). Ireland and the British Empire. Oxford University Press. p. 72,fn.22. ISBN 0-19-925184-3. Retrieved 2016-02-23.
Ray, T. (2017). Yahoo! Closes at Near-17-Year High on Alibaba Outlook. Retrieved from http://www.barrons.com/articles/yahoo-closes-in-on-17-year-high-close-on-alibaba-outlook-1496947836.
Olson, P. (2014). Finding Alibaba: How Jerry Yang Made The Most Lucrative Bet In Silicon Valley History. Retrieved from https://www.forbes.com/sites/parmyolson/2014/09/30/how-jerry-yang-made-the-most-lucrative-bet-in-tech-history/#588bfb9c22f3.
Our Heritage (2017). The East India Company. Retrieved from http://www.theeastindiacompany.com/.
Wei, L. & Deng, C. (2017). Xi’s Sign-Off Deals Blow to China Inc.’s Global Spending Spree. Wall Street Journal. Retrieved from https://www.wsj.com/articles/chinas-latest-clampdown-on-overseas-investing-has-president-xis-approval-1500802203.
“This article originally appeared on Forward Thinking at ashford.edu/blog”https://www.ashford.edu/online-degrees/business/avoiding-complacency-at-the-highest-level-of-global-competition