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The Borderless World, Power and Strategy in the Interlinked Economy

The Borderless World, Power and Strategy in the Interlinked Economy 1What Borderless World means?

2A borderless world...refers to an open world which can bring influences upon people. It may bring about changes in their culture, beliefs, traditions and others.

Patricia Evangelista3Study of borders...-undergone a renaissance during the past decade.-renaissance partly due to the emergence of a counter narrative to the borderless and deterritorialized world discourse which has accompanied much with globalization theory-has moved beyond the limited confines of the political geography discourse, crossing its own disciplinary boundaries-until now-not successful-in creating a common language or glossary of terms 4Study of borders...-contemporary study of borders are notions such as borders are institutions-border terminologies focus on the binary distinction between us and them , the included and excluded-should be studied not only from a top-down perspective but also from the bottom up -with a focus on the individual border narratives and experiences, reflecting the ways in which borders impact upon the daily life practices of people living in and around the borderland and transboundary transition zones.5Buisness in a Borderless WorldKenichi Ohmae argues...-borders and nation states are becoming irrelevant and explains that fundamental paradigm shift has occured that is changing the way business is being done...and is operating under the old rules.

6Buisness in a Borderless WorldGlobalization...is redefining the way companies do business.

7Managing in a Borderless World-identifies the purpose for the companies to go abroad and trying to invest in foreign countries regardless of the way to enter it, like joint ventures, wholly owned businesses, licensing but effective global operations require a genuine equidistance of perspectives. But even with the best will in the world, managers find that kind of vision hard to develop and harder to maintain.8Managing in a Borderless WorldManaging effectively in this new borderless environment does not mean building pyramids of cash flow by focusing on the discovery of new places to invest, nor does it mean tracking our competitors to their lair and preemptively undercutting them in their own home market.9Managing in a Borderless WorldMost managers in all big companies are trying to increase their sales and market share, but the only way nowadays is to search for new market where there are new opportunities (especially in the far east) in order to expand their businesses.

10Managing in a Borderless WorldThe major purpose to go internationally is due to the intensive and huge competition the companies are facing in their local markets, domestic and foreign competition.

11Managing in a Borderless WorldThe other factors that lead managers to manage in a borderless world are the cost factor that all companies care about because it will identify the marginal profit.12Threats that Management Should Take Into ConsiderationsEconomic situation of the countryThe currency rateInterests rates Inflation rateUnemployment rate 13Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization1. Dispersion even original equipment manufacturers with captive technology are not immune from dispersion.

14Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization2. Partnerships Nothing stays propriety for long and no player can master everything

15Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization3. Reduce fixed costsTo compete the global markets, companies have to incur and show find a way to defray immense fixed costs.

16Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization4. BrandYou must spend enough money on brand promotion to realize benefits.

17Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization5. The Governments RoleGovernments have become the major obstacle for people to have the best and the cheapest from anywhere in the world.

18Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization6. EquidistanceCompanies that are globally successful in white goods focus on close interactions with individual users; where as those that prosper with equipment installation focus on interactions with designer, engineer, and trade unions.

19Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization7. Customer Oriented StrategiesSometimes getting back to strategy means getting back to a deep understanding of what product is about.

20Kenichi Ohmae view on the speed, the benefits and methods of dealing with ILE/Globalization8. DemandMaintaining the customer relationship through good service is the key to success.

21CONCEPT OF INTERLINKED ECONOMY

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The concept of the interlinked economy is obviously now more apparent than it was in the 1990s. At the height of globalization, developed countries in the west were able to export their products thereby increasing their consumer base and business influences.Today, countries are confronted with the borderless nature of business transactions. Instead of fighting this reality, those that embrace the shift are more likely to benefit in global competitiveness.

23Business in a Borderless World

In today's dynamic business battlefield, strategy creates the macro picture; our assets are positioned, we know what the competition is doing and we deliver. Tactics help us to maneuver our way around unexpected roadblocks, without losing sight of our strategic objectives.24On Why Size MatterIn certain industries, size is very important. It gives an advantage in costs, reach and technology. In other businesses, size matters less. In the natural world, ants account for 10 per cent of all biomass. These small creatures have found ways to be incredibly successful, and can take on even the mighty elephant. The question is, does one want to be an incredibly dynamic and flexible but small ant, or an all-powerful elephant?

25On Managing DiversityWhether conglomerates are optimal organisation strategists is a hotly debated question today. Research shows that premium conglomerates can create incredible value. One of the best performing companies in the last 20 years has been GE, which is extremely diverse. And there is also a lot of research to suggest that diverse businesses are particularly appropriate to dynamic, emerging markets.

26On Managing DiversityWe have a way of managing diversity that is centred around a strong belief in decentralisation. The companies run themselves; they are not dependent on the centre.

The key to success is taking quick and good decisions, as well as their managements seizing the initiative and taking responsibility.

27On the challenges of the futureHard work, preparation, research, thinking, getting the value proposition right and serving the customer better, can take care of the economic challenges. We have more high quality people available at a lower cost than most of our competitors in the international market place.But these advantages will erode as the competition replicates them. Besides, the cost base will also increase in the future. What the group would then need to do is to move its competitive advantage over time.

28On looking aheadOne thing that will not change is the values of the group and its desire to serve customers well in the marketplace. So whether the corporate centre looks different, whether it is in one place or distributed, doesn't really matter. What matters is that our soul, embodied in the group's values, will still be the same. And, what is more, we will have successful world-class and larger scale companies.29Tax in a borderless world

Achieving tax compliance is a challenge facing governments the world over. Action can be taken.

Jeffrey OwensOECD Centre for Tax Policy and Administration

30Tax in a borderless world

Globalization brings costs and benefits, even for the tax professional. The move towards a borderless world has opened up new opportunities for taxpayers to minimize their overall tax liabilities. Much of this tax planning is legitimate.

31Tax in a borderless world

Good tax planning is driven by the reality of businesses having to operate with increasingly complex laws, particularly affecting international activities, while at the same time wanting to legally minimise their costs, including tax costs.

32Tax in a borderless worldThis same complexity has opened the way to rule bending with creative accounting. Worse, a significant number of these tax schemes examined by tax administrations have been found to be in breach of the law.These practices include deliberately concealing earnings, misreporting transactions between different parts of the same firm, and so on.33Tax in a borderless worldIn addition, increasing numbers of individuals and businesses have taken advantage of the greater freedom of movement across international boundaries presented by globalisation, political integration and advances in technology to reduce illegally their tax liabilities.This form of non-compliance has been assisted by the policies and practices of certain offshore financial centres that facilitate the concealment of undeclared income and assets.

34Tax in a borderless worldFew people are enthusiastic about paying taxes. However, most people understand that taxes provide the funds required for the delivery of essential community services and the infrastructure that households and firms rely on, in research, healthcare, education, security and more. Non-compliance with tax laws reduces the funds available to government for such services. Also, it is blatantly unfair to the majority of law-abiding taxpayers who must, as a result, bear more than their fair share of the tax bill.35Tax in a borderless worldNon-compliance cuts across all taxpayer segments and takes many different forms. Individuals can conceal taxable assets or income through the use of offshore accounts, trusts or by creating so-called shell companies and locating them in tax havens or other countries that do not provide information for tax purposes. Also, small or closely-held businesses may use these shell companies to shift profits abroad, often using fictitious invoices or over (or under) charging for intra-firm transactions. Another all-too-common practice is for some large corporations to manipulate transfer prices between subsidiaries to artificially shift income into low tax jurisdictions and expenses into high tax jurisdictions.

36Managing Across Borders: New Strategic Requirements

INTERNATIONAL BUSINESSES FACED NEW STRATEGIC challenges in the 1980s. Corporations that had once succeeded with relatively one-dimensional strategiesefficiency, responsiveness, or ability to exploit learningwere forced to broaden their outlook. Successful transnational corporations integrated all three of those characteristics. They did so by building on the strengths but accepting the limitationsof their administrative heritages. 37All of the citizens of this world has some obligations to make this world a better place to live, but not only is the ultimate obligation. The ultimate obligation is to know more. If we can only work for the ultimate obligations then miracles will happen. Lets do our part of the obligation. In that way soon our world will be borderless. 38