Knowledge and the Emergent Global Business System

Abstract

Increasingly value creation through enterprise is based on ‘lean thinking’.¹ Each enterprise keeps ‘lean’ by situating itself in a value-generating network with others. Each enterprise concentrates on adding value for the ultimate customer. Each does this by focusing on its own area of core competencies and the role that it can play in delivering value to the network as a whole. Non-core activity is outsourced to others in the network. These all deliver JIT from the network’s range of internationally situated global suppliers. The resulting value adding network of connectivity is organized much like the Japanese Keiretsu.² In this case, each is part of the web of cross-cultural connectivity spanning the globe. To survive, each sub-network within this whole has to operate co-operatively through market-like transactions to generate and pass on value for the system. In so doing, for incentive reasons, each should be receiving an amount of value proportionate to its perceived worth to the network seen as a whole. Each such sub-network competes with others for its share of the value they mutually generate for the global system. The more effective they are at attracting such value, the more net value they can generate. This is a self-reinforcing positive feedback system in which success breeds success.