Our topic is ‘business in the 21^st century’. It is a more complicated and broader subject than will be acknowledged by most. In daily life ‘business’ means the act of making a profit by production, trade or services. In a wider sense it brings to mind corporations, rich managers, agreements, power, money, etc. But things are much more intricate than they seem. This is why this paper will try to study 21^st century business environments by taking into account as many factors as possible, even those that will appear as irrelevant. It should be accepted offhand by any person involved or planning to be involved in business that the business world we see, hear and talk about is only the tip of the iceberg; it is the product of developments starting from the dawn of man. How many people ever suspected that business today wouldn’t be possible without the Agricultural and Industrial Revolutions? Because agriculture as we know it is almost obsolete and industry is ever changing through technological breakthroughs, we will be less concerned with these historical developments. Although it may or may not have been named, we are on the brink of a new revolution, in fact it may already have happened, though not perfected. This revolution is taking place in an age referred to as ‘ Age of Knowledge’. The rise of computers, in the middle of this century was indicated that the future could be totally different. Back then, surely, no one imagined ‘the Internet’; even if they did, the uses they would have in mind for such a system would be very narrow and limited. Business will possibly be the most affected platform.

In the range of our discussion, to make it truly scientific (but comprehensible), diverse areas of life will be tackled. This will be done purposely to explain the implications they have for business. Don’t be surprised when reading about the population growth of Africa or whatever, everything has a meaning.

Besides the ambition to predict the future of business, the paper aims to be entertaining as well. It’s been proven that education by entertainment is the most effective way. Above all, this paper should also interest anyone outside the business world. Though our main concern is business environment, anyone who has read the paper will have found a good description of future society in general.

Before beginning to look into the future, it is necessary to look at today and perhaps the past as well. We can see many things about the world today. There are 180 or so nations, with maybe ten times as many cultural groups. We see that almost everyone has to work in order to survive. Each person gets up early in the morning and goes to his or her workplace to complete the tasks assigned to them and comes back home in the evening. There is a wide range of jobs available according to the skills and competencies of the individual. Just like people, countries have to work in order to survive. They produce, buy, sell, trade, make peace, make war, evolve and revolve. Despite all this continuous work billions are unhappy, either from poverty or physical and psychological oppression. On average, the income of the richest one-fifth is 60(sixty) times that of the poorest one-fifth. This is not a good sign; what is more, the future could be much bleaker. Problems such as this may lead to the eventual destruction (physical) of our planet. This is why business entities must get their priorities straight; they must begin to serve mankind, rather than enslave it.

Recent developments already point to a different future, and if these developments can be harnessed, they can improve the state of the world. One of the first things that come to mind is integration. This has existed for some time in the primitive form of economic integration through trade blocks, etc. Now certain parts of the world are heading toward political integration as well. The European Union is the pioneer in this area. Will the future witness the end of the nation-state?

Another development of today is globalization. Already many big corporations operate in many parts of the world. It has many advantages, but serious dangers as well. Will globalization turn into ‘culture-cide’? Or will everyone benefit from the interlacing of economic activities?

The most spectacular process taking place is in the field of communication. As communication techniques advance, the need to travel diminishes. Many actions can be performed through virtual mechanisms. This will take a great load of business. The workplace, nature of work and expenditures will change immensely. This development coupled with automation and cybernetics will no doubt revolutionize society. We won’t have to work as much as we do now. Or is this a myth?

Business has always been in close ties with economics and politics. Many events taking place in the political arena are keenly observed by businessmen. Political crises usually mean economic and hence business crises. This is why it is necessary to take a look at the political future of the world in order to understand the changes that will take place in the business environment of the 21^st century.

Like business, politics have begun to be internationalized. Most countries, especially second and third-world ones, cannot act on their own. This is due to two reasons. First, there is a world dominance race (if it can be called a race, since one contestant is not enough for a race). World politics are balanced very delicately. The United States is notorious for shaping the world according to its desires. This is why many developing countries have become satellites of, and in the economic sense, markets for industrialized nations. The second reason is that this international market mechanism strongly limits the actions of developing countries. These countries depend on the developed nations to provide them with the infrastructure necessary for industrialization. This can come in the form of foreign borrowing, import of skilled managers, education and political advice and planning. Similarly, developing or newly industrialized countries are crucial sources of wealth for the first-world nations. Since raw materials and especially human labor is very cheap in such countries, these countries make excellent markets. Almost all electronics manufacturing industries operate in South East Asia, where labor is relatively skilled and ultra-cheap. In view of these facts, one can see why the West has to have these developing countries on its side and why the only way is political support.

The main trends of change are briefly listed below:

• Globalization: The flows of trade and capital and developments in science and technology have begun to take place across the boundaries of nation states and have become a transnational process. This process has completely altered the co-operation and relations between countries.

• Regionalization: As globalization is removing the economic boundaries between states, regional integration of such states is polarizing the economic world. We no longer hear news about just Germany or South Korea but Hear a lot about Europe (EU) and South East Asia (ASEAN).

• Liberalization: An obvious development is the liberalization of economies. Economic units are growing more and more independent in terms of determination and decision-making. The role of the state is being minimized.

• Privatization: Since the 1980s, the economic control the state enjoyed has been transferred to the private sector. It was seen that privatization is a more efficient method of production than is nationalization. This trend is absolutely parallel to liberalization.

• Localization: This is can also be referred to as communitarianizm. The centralized state is starting to dispense its power and duties to local communities. Smaller units are more efficient and bring a truer sense of democracy with participatory democracy.

• Voluntarism: Along with the public and private sectors, society is witnessing a third sector’s birth. Non-profit-seeking organizations have started to take on certain duties that the other two sectors may have neglected.

• Democratization: The most significant trend in the political world today is democratization. Although democracy has existed for a long time, most countries could not make use of it. Human rights, civil and political freedom have been increasing in importance. Countries that do not take heed of these changes are being isolated both politically and economically.

There are other more subtle changes. There is a widening disillusionment with politicians. People are not trusting or expecting anything from them. In Britain a 1994 poll showed that no more than 20 percent of voters believed that politicians could make a change. This figure was over 70 percent in 1950. Because of the international forces of trade and global market mechanisms politicians think they are losing their authority and power. Along with this the number of voters have gone down sharply and people are less enthusiastic about political activism. Just as politicians have lost their ability to make policies, supranational bodies such as the United Nations has lost its ability to resolve growing conflict between nations. It’s quite normal to concede that the United States has taken the UN’s place and that it has been involved in every international event, but this seriously contradicts the idea of united nations, which means literally, nations’ alliance and co-operation, and strongly implies mutuality. Most non-Americans do not like or trust Americans. Why? Because, the U.S. tends to solely act in its own interest. Experts believe that too much power on the U.S. and its Northern Allies’ side is worsening the ‘unbalanced balance’ of the rich-poor dichotomy of the world.

This subdivision of the world into rich and poor has more implications for business than one will predict. Social trends are very important to all consumer product companies, retailers and service organizations. As society separates itself into rich and poor, consumer values and preferences will be in greater disarray. To provide buyable goods to the poor majority quality must be cut.

The British economist Robin Marris says, "Society has been divided into the ‘all rights’, those with education and comfortable incomes, and the ‘low-eds’, the undereducated underclass who live on income supplement or are unemployed. Without growth in the developed world, the underclass will continue to be subsidized by the privileged people who have jobs. Globalization will merely exacerbate the problem by exporting ‘low-ed’ jobs to low-wage countries.

The European Union is also taking its share of the two-tier problem. There is increasing separation between the richer countries like France, Germany and the Benelux, and the poorer Britain, Spain, Greece and Ireland. On the global scale things are ridiculous, not just serious. The poorer countries of Central Africa have GNPs smaller than the net annual profits of corporations. The 1993/94 $2.6 billion earnings of Goldman Sachs equaled the GNP of Zambia in the same year. Southeast Asian countries, although very wealthy, also have income distribution problems. Malaysia’s inequality is twice that of Japan’s. Thailand and Singapore also have a high concentration of earners in the top 10 percent.

Calculations show that the current world population of six billion will approach eight billion by 2020. Ninety percent of this growth will take place in Asia, Latin America and Africa. Africa alone will double its population from 750 million to 1.5 billion. Where population increases are unmanageable, tribal conflict, war, genocide and poverty will hinder economic development and keep away corporations. Africa is the worst case since neither natural resources, health provisions nor water supply are enough to support the current population, let alone its double.

The best determinant of a country’s success is its growth. The predicted positions of countries are quite different from what they are today. China will be the biggest economy in the future. The United States will take second place, and India will be fourth, after Japan. We stern companies will be heavily drawn toward China to take its orders for goods and services needed by the vast population. For example China has told the aerospace firms Airbus and Boeing that it will need 800 more aircraft over the next 15 years. China’s need for air travel will grow 10 percent a year, which is more than its growth rate. By 2030 it has been estimated that China will need to import 200 million tons of grain. This figure is the total annual grain production for the whole world. If China consumed fish at the same rate as Japan, then it alone will consume the entire fish harvest of the world.

Southeast Asian countries have already begun to rival Western countries. Malaysia produces its own Proton cars and has an excellent production capability in electronic components for Motorola, Intel, Texas Instruments and other big corporations. Its per capita income is nearly $8000, which is a very high figure for a developing country.

Western businesses will have at their hands vivid markets in Asia. From food to banking, many needs will have to be met by developed nations’ companies. Take for example credit cards. Already there are 150 million credit card holders. There are over 800 million children under the age of 16. This young population will cause a boom in the credit card industry. Asia’s middle class alone is as large as Western Europe itself. This will be an excellent market opportunity for corporations. The population growth will bring labor costs even lower for foreign companies. Corporations will not hesitate in hiring a highly skilled Korean worker over a badly skilled American worker at half the price. This is one reason why the West has to reform its education system and train its workforce. The competition between Western and Asian workers will be fierce, but even today it seems that the Asian economies have the edge due to lower living standards and wages. Corporations will move east. Many aspects of business will have to change as a result of this.

Because of the immense growth in population natural resources will be depleted at a faster rate. Fossil fuels are expected to run out in fifty years or so. Water will doubtlessly become the most important resource. Only 1 percent of the world’s water is enough to meet needs. However, water is so badly distributed in certain parts of the world that even today there is a great shortage of clean drinking water. Many wars are likely to occur due to disputes over water supplies. The Middle East is the most prone to this problem. Water distillation and distribution might become one of the biggest industries of the future.

To conclude this section, it has to be agreed that the political and economic changes will deeply affect the business environment in the future. Corporations will have to study the state of the world closely and change themselves accordingly in order to survive. Despite many problems that will prevail, the future will bring many opportunities to corporations. Where there is a demand there will be a supply. As long as companies can go on supplying, they will survive.

Up to this section we have analyzed the most probable future of politics and economics. These two areas are of tremendous importance to business corporations around the globe. Now that politics and economics have been dealt with it is appropriate to evaluate the future of business. It is not necessary to look at the ‘macro’ part of business because it already has been explained more or less in the previous sections; so much of our concern will be the ‘micro’ level of business, that is, the structure of the firm, the management, job content, etc. It must be said right away that technology, especially in the field of communications, will play the most important role in the business society. Other developments will be those that are related to total quality management.

Nietzche once said, "a snake that doesn’t know how to shed its skin will die." The developments of our time are forcing businesses to change. Like the snake, companies that don’t make any effort to rebuild themselves will fall back in the race. Below, we have outlined the factors that are pushing companies into changing themselves:

• Globalization and Competition: In international trade barriers have gone down and competition is at a much higher level. Both of these are forcing organizations into improving themselves. In our day, local competition has been replaced with global competition. Some people even speak of ‘mega’ and ‘hyper’ competition. The most important factor that makes change necessary for companies is competition.

• International and Regional Integration: On the one hand there is increasing involvement with the World Trade Organization for the purpose of international economic integration. On the other, integration organizations such as the EU, NAFTA, LAFTA, APEC and similar ones are making countries and companies change.

• Information Technology: Use of computers has spread; automation and robotics are used widely in production; telecommunication techniques have advanced significantly. All of these developments are making themselves available to companies; those who choose not to make use of them will lose.

• Material Technology: Production costs are falling due to the availability of cheaper, lighter but stronger materials. To utilize this technology companies have to get rid of old machinery and invest in newer ones. If not, companies will loser their market shares.

• New Technologies: Developments are forcing changes particularly in the research and development policies of companies.

• Competition for New Markets: Since the end of the Soviet Empire, newly independent states have abandoned socialism and shifted to capitalism. New markets such as the Former Soviet Union and the ex-East-Bloc countries are attracting many foreign corporations. Also, China has been tending toward capitalism despite its current regime. China will be the biggest economy in the next century and perhaps a superpower. There is big competition for control of these new markets and corporations must adapt accordingly.

• Human Resources: This has been an increasingly important concept in the business world. Companies are realizing that human resources are the powerhouse of economic development and have started to invest in it. Not only the private sector, but also state organizations have been giving more consideration to human resources.

• Consumers: Both trends and expectations have changed. Consumers are wiser and stricter. Their demands for quality, fast service, cheapness, aesthetics, security and health must be met by companies, otherwise they will be washed away due to competition.

• Standardization: Exporting and importing are not as easy as they were before. For international trade certain quality requirements must be met. The International Standards Organization’s ISO-9000 quality guarantee system is spreading quickly. Companies that do not meet this standard are having difficulty in marketing their goods abroad. Also, in the domestic market, companies that have ISO-9000 standards are increasing their market shares. For example, in the European Union, goods that do not meet certain standards are not allowed into the member states. This is why the ‘CE’ (Confomite Europeenne) symbol must be on all goods.

Change in management is another aspect of business that must be mentioned. In the field of management and organization theory, Henri Fayol and Max Weber’s studies have advanced the discipline of Public Administration. Similarly, Frederick Taylor’s studies have given rise to Business Management.

Since the 1930s there have been changes in organization and management theory. In the United States, Walter Shewhart, who worked as a statistician for Bell Telephone Co., did important work in the area of statistical quality control. He was one of the first people to have incorporated statistical methods into production. Shewhart’s work was followed by W. Edwards Deming and Joseph Juran. The latter two scientists were invited to Japan to give seminars about quality development, quality planning and quality control to Japanese engineers. Toward the end of the 1950s Armond Fiegenbaum forwarded the concept of Total Quality Control. In the 1960s Japan came in the scene with Kaoru Ishikawa’s Quality Circles and Cause-Effect analyses. Genichi Taguchi’s statistical experiment design and Quality Loss Function proved clearly that quality was one of the principal elements of this new management philosophy. Taguchi is renown as a pioneer of quality engineering. Similar investigations of quality in the 1980s and especially the 1990s gave birth to what is now popularly known as Total Quality Management. During this decade other developments took place in this area. The importance of teamwork was acknowledged and Taylorism was criticized heavily. Also, the importance of human resources and education was seen. Other concepts such as continuous development, benchmarking, reengineering and competitive strategy were born in this period (1980s-).

It was mentioned above that the new management philosophy was Total Quality Management. The purpose of this is to make production and management better and more efficient. The core principle is quality, obviously. To understand total quality management, its key elements must be studied briefly:

• Quality Management: The quality development, planning and control; standardization of quality; top-level managers’ recognition of the importance of quality. Participation of all employees in improving quality.

• Customer-focused Management: The determination of customers’ needs and wants; to provide them good quality goods and services.

• Decentralization: Distribution of tasks and authority; putting an end to hierarchy; delegation of middle managers and workers; strengthening of communication, trust and co-operation among employees.

• Strategy and Strategic Competitive Planning: SWOT analysis; evaluation of strengths and weaknesses with respect to rival companies; declaration of vision and mission in organizations; application of strategic planning.

• Benchmarking: The measuring of an organizations success by comparing its strategies, practice, tempo, quality of goods and services with the organizations best in its class and best practices. Through such measurements it is easier to improve performance.

• Total Participation and Synergic Management: Forming of multifunction work teams and spreading of teamwork; enabling workers to make decisions and participate in the management process.

• Human Resources: Accepting that humans are the most important resource of an organization; valuing all workers; rewards and incentives.

• Performance Evaluation: Performance of organization, of workers and managers; Evaluation of customer and employee satisfaction; quality, efficiency, long-term profit, etc.

• Information Technology Oriented Management: Making maximum use of new information techniques; more research-and-development; computer-supported production.

• Social Responsibility and Ethics: Understanding of work and management ethics. Responsibility toward community.

• Continuous Development: Grasping the principles of continuous development, training, education, information, research.

• Prediction of Problems and Zero Mistakes: Doing the right things the first time; minimizing mistakes; solving problems before they occur.

• Optimal Production: Rather than keeping excessive stock and mass production, determining optimal production by analyzing technological developments and possible future changes in customer expectations; producing the right amount, at the right time and at the right quality.

• Statistical Process Control: To enable continuous improvement and higher quality, companies should make use of techniques such as the Pareto diagram, process flow diagram, decision and information flow diagrams and cause and effect diagram.

• Strategic Management: Far-sighted planning; vision and mission; SWOT analysis.

• Downsizing: Dividing the organization into smaller units to increase efficiency; decreasing the number of layers.

• Rightsizing: Production at the optimal size; employee according to job rather than job according to employee; positioning employees based on their skills and expertise.

• Outsourcing: Instead of managing every task itself, companies can hire expert firms to handle them; taking advantage of advisors from outside the organization.

• Flexible Production: Rather than mass producing, companies should produce necessary amounts at the necessary time.

• Simple Structure: Horizontal organizational structure instead of vertical; getting rid of idle units and processes.

• Delayering: Decreasing management layers; removing layers between decision-makers and doers.

• Empowerment: Giving workers more access to responsibility and authority; allowing workers to participate in the decision-making process; more teamwork; rewards; workers owning shares of firm (ESOP).

• Automation: Routine jobs should be done by robots or computerized machines.

• Continuous Education: Not merely hiring educated and informed employees but training them all the time.

• Auto-control: Multi-functioned teams and members checking on each other.

• Total Effective Maintenance: In order to prevent losses in energy, material, machinery and personnel, companies must routinely have maintenance operations; Japanese 5-S method (seiri-classification, seiton-order, seiso-cleanness, seitketsu-standardization, shitsuke-discipline).

Aside from technical and management changes there will be other important differences between today and the next century. Certain subjects are manufacturing, jobs, unemployment and communications. Of these, the bit about jobs is the most interesting. As a result of technological developments the shape of jobs will change significantly. Many people might be working from their homes in the near future. Although this immedia tely brings with it the question of what will happen to manual workers. Yes, working at home will probably be a privilege only to managers or information related employees. However, there is a good chance that manufacturing and manual labor may disappear in the near future. Already, intelligent machines are being able to handle a wide range of tasks. After a little more technological progress manufacturing by man may come to an end. Perhaps even management will be computerized in the distant future, but it is certain that manufacturing’s share in the economy will eventually vanish. In all industrialized countries today, the services and information sectors are by far the biggest. Just as agriculture draws an average 4-8 percent today, manufacturing will be diminished to a similar share. So, in the near future, enhanced communication systems will allow certain employees to work individually and at home. Via Internet and local area networks, banking, trade, designing, education, management, and similar jobs can be conducted at home. Because this will lower the amount of time wasted at the office, workers will have opportunities to be employed by more than one company. Permanent jobs will be replaced by temporary flexible wage jobs; that is, your earnings depend on how much you work and how much you’re needed. There will be a lot of competition between both workers and firms, in that, firms will compete with each other to grab the best workers (there will be employee transfers among companies, just like athletes being transferred by clubs today); workers will race with each other to attract the attention of large well-paying firms; this will bring up standards such as skill and education. It is predictable that most of the competition will take place in the third world. Corporations will compete for markets as well as low-waged local workers. This will give rise to a new concept: the multicultural corporation. Management teams will be made up of people from different background. This will be especially evident in cosmopolitan trade centers such as London, New York, Tokyo, Paris, Frankfurt and Istanbul.

The future will have great problems as well. Unemployment might very well be the most important one. Population in the East is increasing at gigantic rates. Because, longevity is short, youth’s share of the population is the greatest. Considering that at least half of the current manufacturing jobs will be done by automation, many young workers will find themselves unemployed. This will lead to other problems such as crime, drugs and civil conflict. Steps must be taken by powerful organizations to prevent or at least alleviate the severity of such problems. Maybe it is more appropriate that automation does not come into our lives, at least until the population problem has been solved.

Naturally, prophecies of any kind are a difficult and complex job. Because such diverse areas such as technology, sociology, economics, politics and even geography affect business, all of these sciences can provide hints toward its future. This is why we chose to make use of them and show the whole picture rather than a small part of it. In general though, business will be affected the most by technology and global economics. Contemporary politics is determined by business activities; it has the lost strength and importance it enjoyed in the 1960s and 70s.

On the technical side, business management will be much more complex. New techniques and processes will come around. Companies won’t have a choice of not considering changes and reshaping themselves. Competition will be so high that all companies, even small ones will have to be very careful about what they do and how they do it.

The end of the job may be approaching. New occupations will be born. Some will die. Workers will be specialized in a certain a certain area so that, jobs are done by the best worker. To be the best in one’s field workers will have to continuously educate themselves. Knowledge and skills that are extremely valuable one day may be obsolete the next. The speed of all processes will be ever increasing. To be prepared for the next century all firms and all workers must first catch up with today and then begin rebuilding themselves.

REFERENCES

-Degisim 97 (Changing Process 1997) Mess yayinlari 1997

-Beyond the Next Wave/glen peters /Pitman Publishing 1996

-Kariyer Dunyasi Nisan 98 (Career World, April`98) Hurriyet Grubu

-Megatrends 2000, Form Yayinlari 1990 John Naisbitt, Patricia Aburdene