The Borderless World: Power and Strategy in the Interlinked Economy

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  • Edition: Revised
  • Format: Paperback
  • Copyright: 2009-07-10
  • Publisher: HarperCollins Publications
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Since 1990, when it was first published, The Borderless World has changed the way managers view the world and their businesses, and how they invent, marker, and compete in our new globally interlinked economy. Kenichi Ohmae's groundbreaking bestseller argues persuasively how national borders are less relevant than ever before and identifies key characteristics of top--performing nations and corporations.In this revised, updated edition, which features a new introduction by the author, Ohmae attributes the American economy of the 1990s to its seamless entry into the borderless world and looks forward toward an uncharted future. He casts a critical, though ultimately hopeful, eye on the financial crisis in Asia and especially in his home country of Japan.

Author Biography

Kenichi Ohmae is a Tokyo-based top corporate strategist and adviser to governments around the world. The former director of McKinsey and Company and chairman of its Asia Pacific operations, he is a speaker, educator, entrepreneur, and author of seventy books. He writes frequently for the Wall Street Journal, New York Times, Newsweek, Harvard Business Review, Washington Post, Japan Times, and other publications.

Table of Contents

Acknowledgmentsp. ix
Introductionp. xi
An Inside-Out View of Macroeconomicsp. 1
The Equidistant Managerp. 17
Getting Back to Strategyp. 33
Do More Betterp. 53
The China Mentalityp. 70
Getting Rid of the Headquarters Mentalityp. 89
Planting for a Global Harvestp. 108
The Global Logic of Strategic Alliancesp. 121
"Lies, Damned Lies, and Statistics"p. 145
The FX Empirep. 165
Development in a Borderless Worldp. 180
A Steady Handp. 199
The Asian Crisis and the Future of the Borderless Worldp. 217
Declaration of Interdependence Toward the World--2005p. 239
Indexp. 241
Table of Contents provided by Syndetics. All Rights Reserved.


An Inside Out View of Macroeconomics

Despite the time I spend writing and managing McKinsey in Japan, I still spend most of my time in the field.Day to day I work with senior managers in all parts of the Triad (the United States, Europe, and Japan) and Asian newly industrialized economies (NEES) to help devise and implement strategies.I've never discovered any formulas or algorithms for getting things right.As I first described the process in The Mind of the Strategist, effective strategies do not result from specific analyses but from a particular state of mind, a state in which insight and consequent drive for achievement, often amounting to a sense of mission, fuel a thought process that is basically creative and intuitive rather than rational.Strategists do not reject analysis.Indeed, they can hardly do without it.But they use it only to stimulate the creative process, to test the ideas that emerge, to work out their strategic implications, or to ensure successful execution of high-potential "wild" ideas that might otherwise never be implemented.Great strategies, like great works of art or great scientific discoveries, call for technical mastery in the working out but originate in insights that are beyond the reach of conscious analysis.

I would not change much of this today. Certain concepts and approaches-strategic degrees of freedom, say, or key factors for success-are of great help in preparing the way for the strategist's creativity.Fact-based analyses of markets and customers and products are, if anything, more important than ever in a world grown more complicated and treacherous.But they are like daubs of color on a palette.They are only the raw material on which "the mind of the strategist" draws.

All textbooks aside, this is still for me the essential, unchanging fact about the hands-on work of building real strategies in real companies.Earlier, however, I argued that good strategies had to comprehend-and strike the right balance among-the three key points of what I called the "strategic triangle" of customers, competitors, and company (an organization's distinctive strengths and weaknesses).Today, as a genuinely interlinked economy emerges, two more Cs have to be added to the list: "country," by which I mean the various government-created environments in which global organizations must operate, and "currency," by which I mean the exposure of such organizations to fluctuations in foreign exchange rates.

So important have these last two Cs become that no responsible company can operate in a borderless environment without paying real attention to them.They are no longer the background against which the findings of a "strategic triangle" analysis get tested.Instead, they belong on the original palette with which strategic minds do their work.When a sudden fluctuation in trade policy or exchange rates can tam an otherwise brilliant strategy into a seemingly irreparable hemorrhage of cash, making arrangements to deal with such fluctuations must he at the very heart of strategy, not be an afterthought to a strategy defined by other considerations.

Customers: Their Emerging Power

You have read enough about "global" products to realize that few of them exist.But there are emerging global market segments; most of them are centered in specific countries.For example, the market, for off-road vehicles is centered in the United States, with incremental sales elsewhere.What is important to understand is the power of these customers vis-a-vis manufacturers.Part of that power comes from their lack of allegiances.

Economic nationalism flourishes during election campaigns and infects what legislatures do and what particular interest groups ask for.But when individuals vote with their pocket-books-when they walk into a store or showroom anywhere in Europe, the United States, or Japan-they leave behind the rhetoric and mudslinging.

Do you write with a Waterman or a Mont Blanc pen or travel with a Vuitton suitcase out of nationalist sentiments? Probably not.You buy these things because they represent the kind of value you're looking for.

At the cash register, you don't care about country of origin or country of residence.You don't think about employment figures or trade deficits.You don't worry about where the product was made.It does not matter to you that a "British" sneaker by Reebok (now an American-owned company) was made in Korea, a German sneaker by Adidas in Taiwan, or a French ski by Rossignolin Spain.What you care about most is the product's quality, price, design, value, and appeal to you as a consumer.My observations over the past decade seem to indicate that the young people of the advanced countries are becoming increasingly nationalityless and more like "Californians" all over the Triad countries-the United States, Europe, and Japan-that form the interlinked economy (ILE).

But this applies to more than just a small segment of consumer products.It is just as true, for example, for industrial customers.The market, for IBM computers or Toshiba laptops is not defined by geographic borders but by their appeal to users, regardless of where plants and factories are.

Chip makers buy Nikon steppers because they are the best, not, because they are made by a Japanese company.Manufacturers buy Tralfa industrial robots for the same reason, not because they happen to be Norwegian. The same goes for robots made by DeVilbiss in the United States.Companies around the world use, IBM's Materials Resource Planning (MRP) and Computer Integrated Manufacturing (CIM) systems to shorten production times and cut work-in-process.Because of the demands of contemporary production, they use Fujitsu Fanuc's control systems and Mazak machine tools made by Yamazaki. hi fact, Fujitsu Fanuc dominates the numerically controlled (NC) mad-tine-tool market worldwide: Its market share in Japan is 70 percent; around the globe, 50 per-cent.This is neither accident nor fashion.These NC machines deliver value through productivity improvement, and everyone knows it.


Excerpted from The Borderless World, rev ed by Kenichi Ohmae Copyright 2003 by Kenichi Ohmae
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

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