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Managing the New Millennium

A major challenge for the Iranian private sector in the coming decade would be the emergence of a competitive environment which did not used to exist

The third millennium has arrived. The most important feature of this age is the uncontrollable pace of developments and changes, free and fast transfer of information, emergence of networks in manufacturing industries and an integrated world economy.
Under such circumstances, many new challenges are before organizations. In Iran’s Third Socioeconomic Development Plan, necessary provisions have been made for businesses to overcome such challenges. The following is a collection of expert views in this regard, which focus mainly on the issue of accession to the World Trade Organization as a challenge facing managers.

Many challenges can be seen today in management strategies: production systems are being transformed, trade relations are shifting toward electronic commerce, and moreover, changes can be seen in the financial and monetary markets, the outcomes of which have also affected the Islamic Republic of Iran.
Globalization, a major challenge of today and tomorrow, started in the past century. In the first decades of the 20th century, economic freedom and democracy prevailed in the West. After the World War I, the world faced the Great Depression and thus, governments had to devise strategies to interfere in the economy. However, negative impacts of government intervention were revealed during the World War II, and the first measures for liberalization of economy and trade were taken in form of GATT (General Agreement on Tariff and Trade), which later turned into WTO.
Measures were also taken at that time for reconstructing the war-ravaged Europe, mainly setting up of the International Monetary Fund. When GATT was founded, it had only 23 member countries, but at the moment, 135 countries are members of the WTO.

Trade Liberalization: WTO members believe that liberalizing trade could help their economic development. Some 110 members of the WTO are developing countries and their experiences show that free trade is to their benefit. While the world population has become two folds in the past 50 years, the per capita export has been 8 folds, which means a considerable economic growth and reduced poverty for member countries.
Now with the start of the third millennium, over 90% of the world have decided that goods, services and capital should flow freely among them. Now many goods do not have the seal of one specific country and thus the “certificate of origin” is not a valid document in trade anymore, and capitals flow beyond national borders freely. Organizations should evaluate this trend and understand it very well; this is a great challenge in front of all strata of the society.

World Economy: With the elimination of geographical borders for economic activities, membership in the WTO has been a must for every nation. This means that competition can no longer be divided into domestic or foreign categories. In this respect, a major challenge for Iranian businesses would be “internationalization” and “globalization”.

Information Society: Another ongoing change today is the shift from industrial society to information society in which electronic industries, information and computers would prevail the economy. Because of the growing advancement of IT and communications, information would play a significant role in the future.
In the age of high speed and computers, if a country cannot keep pace with others, it would fade out. One cannot stop changes, but must keep pace with them and this needs high speed. Thus, another challenge for managers would be conforming to the information explosion and new technologies.

Decentralization: Another prevalent trend is a shift from centralized to decentralized management systems. In the past decade, the widespread motto by organizations was “small core, vast network.” Many experts believe we are moving toward a society which is based on networks. About 80% of value added by businesses is created through making alliances and networks. Under these conditions, a challenge of organizations in the first decade of 21st century would be to manage the factors which create value added from a remote place and this needs getting familiar with the culture and knowledge to work within networks.

New Concepts: In the trend of globalization, many new concepts are being raised:

Private Sector: A major challenge for the Iranian private sector in the coming decade would be the emergence of a competitive environment, which did not exist in this country in the past. If the nation is determined to use the private sector as a driving force behind development, it should help create such a competitive environment in this sector. In the Third Development Plan, much focus has been placed on privatization, but not on the competition among businesses.

Organizations in the Third Millennium: The main characteristics of enterprises in this millennium are fast responsiveness, ability to create alliances and network manufacturing. What paradigm shifts should take place for Iranian companies to reach such a status?

11. Organizations should prepare themselves for, and welcome, changes. If organizations cannot implement change management, they could not survive in the competitive environment of the future.