Companies and the Flat World
Summary of Chapter Eleven: How Companies Cope
Companies, small and large, are noticing the changes. Suddenly, their competition is not other businesses but hordes of freelancers or independent contractors. These freelancers can use the same technology but work at home with little overhead, and duplicate or add unique value. Companies are shifting their products or services to create other niches. In addition, customers demand extra services from businesses that were once done by someone else. Small companies and individuals thrive now by acting big, using all the worldwide collaboration tools. Large companies, on the other hand, have to act small, such as Starbucks, offering customers specialized drinks. Companies once controlled the tastes of consumers, and now this has been turned around, so that consumers are demanding the changes from companies.
Commentary on Chapter Eleven: How Companies Cope
Friedman concludes that the best companies are going to be the best collaborators. No single business or group can do it alone because products and services are complex and part of a worldwide network and supply-chain. Many products like video games are not produced sequentially but simultaneously by a whole workforce. Friedman advises that a corporation or company get a regular x-ray of its skeletal structure so it can let go of the things it can outsource. HP, for instance, once had 87 supply chains and then compressed them into 5 efficient supply chains. Outsourcing is now standard business practice; it can be done in a socially responsible way that creates more business for everyone.