Two major issues that businesses of an earlier era did not have to cope with are environmental and public relations issues. In fact, it is these earlier businesses that polluted the environment by discharging polluting effluents into air and water bodies, degraded quality of life on earth through desertification of many regions and created the unseemly waste dumps. They left a legacy that today’s businesses have to cope with in the form of strict environmental regulations and public hostility.
Public relations is a critical issue in democratic countries because people choose the legislators who make business regulations. And in today’s media dominated world, people become aware of what businesses are doing quite quickly. Many corporations go out of their way to engage in welfare activities that boost their images in public mind. Bad publicity can lead to business bankruptcies as the public shuns their products.
The traditional hierarchical business organizations cannot hope to compete effectively in today’s markets. In knowledge businesses, it is the knowledge of their employees that help businesses to succeed. In a structure where top managers make all decisions and expect those below them to carry these out, the knowledge workers might decide to contribute their minimum.
Additionally, in fast changing markets, it is the people on the field who come to know first about the changes. If this information does not become available throughout the organization quickly enough, many of the managerial decisions can be ill-informed decisions.
A new organizational structure that facilitates the dissemination of information quickly across the organization, and also empowers employees to work in satisfying and meaningful ways, is called for. This again, is a topic that has received much attention in management studies.
Businesses of today thus have to operate in a very different environment characterized by a focus on knowledge and global competition, and fast changes in technology, markets and economic conditions. Unless they can adapt to this new environment, they will be out-competed and become extinct. As Charles Darwin said, “It’s not the strongest nor most intelligent of the species that survive; it is the one most adaptable to change.”