BEE Partner, South Africa Economy Watch

It is important for a government to fully understand the competitive dynamics of the global environment if it is to successfully take the country and its people forward. A political leader who is able to think and act locally, but is unable to do so on a global basis, is a liability to the development of the country. Advancing a country’s interests is all about economic and social development. A government that cannot create the right kind of climate for coordinated development is failing in its duty — not only to its electorate, but also to every single stakeholder. More and more national stakeholders throughout the world’s nations are beginning to demand this from their political leaders. Scotland is a good example. It has a mature, service-dominated economy with a proud tradition in all aspects of human endeavour far beyond its size or population. Yet the Scottish business sector recently challenged the nation’s political leaders, who themselves often call for domestic firms to become more globally competitive, to raise their own standards and play a greater role in assisting the country to advance its global competitiveness.”

The meaning of strategy can therefore be reduced to a simple concept. Take a country or a business organisation — both have competitors. The fundamental strategic question that arises is: What can be done to put the country or the business organisation in a more favourable position in the marketplace relative to their competitors, and on a sustained basis? The reader should note that this notion does not talk about destroying one’s competitors. It supports Sun Tzu’s view of trying to preserve one’s opposition, because competition is part of the environment — if you destroy your competitor, you harm the environment. Doing so rebounds on you, because you are also part of the environment. Therefore, political and business leaders need to coordinate the five Ps to ensure the right calibre of People; create the conditions for them to give a world-class Performance, quality Production and globally competitive Productivity; and provide the conditions for them and their families to Prosper. This they need to do on a local as well as a global basis.

Oftentimes, managers understand the component parts of the environment in which their organisations conduct business, but lack an understanding of how these parts function individually, as well as collectively, and how their functioning is likely to affect them, as well as their competitors. Companies and their competitors do not live in little boxes. Nor do countries. The actions of one influence the other, and vice versa. This is the reality and complexity of the world of strategic thinking. Everything is highly interconnected. Everything affects everything else.

Terrain

We saw how the government of the day needs to create and sustain a domestic infrastructure that supports the economic and business endeavours of the country, its business organisations, and human capital, which lives and works within its boundaries. Without a proper social infrastructure, economic development cannot reach its true potential. The whole notion of strategy in business and economics has to go beyond profitability. Speak with any businessperson, and he or she will tell you that profits are the most important measurement of a company’s performance at the end of the day. They will say that, without profitability, no substantial investment of any kind can take place. Investors want a return on their investment, and for that to happen, profits have to be generated. However, future investments are usually the result of profits, or are planned for in order to generate more profits. Fighting with one’s competition is therefore about improving profitability. The result is that strategy is also the control and management of resources for the specific purpose of developing those resources for the betterment of one’s customers. Everything else will then fall into place. It is therefore imperative to create a competitive domestic business environment. Companies that want to compete successfully in the global arena need to be highly competitive in a domestic environment that is characterised by a high degree. of vibrancy and competition.

Doctrine or law

The creation and maintenance of internal harmony in an organisation can only come about if a similar state exists in the country. From a micro-perspective, internal harmony should create a caring environment in the organisation. Everyone should be focused on providing spectacular service to one another, as well as to customers and stakeholders. Creating synergy in an organisation by using the skills of each and every employee, both simultaneously and collectively, in the pursuit of strategic superiority, provides the real impact in any strategy. From a macro-perspective, internal harmony is a measure of how well the government is allocating resources to incubate, nurture and protect human capital. Internal harmony can only be created by a combination of stakeholder participation, the correct legal infrastructure, and educating people on the necessity of harmonious relationships for the purpose of improved productivity and, ultimately, prosperity.

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