Globalization: The Evolution of Enterprises in the Global Network Competition

Abstract

The globalization of a company is embedded in the globalization of its task environment. This process can be described as a co-evolutionary process of a social system in its environment. A historical view of the globalization of competition seems to prove that it can be interpreted as an evolutionary process of differentiation and integration that is reinforced by the decreasing rigidity of boundaries. A "liquefaction of competition" can be observed, in which an increasing number of autonomous economic actors like decentralized units of Multinational Corporations (MNCs) and Small and Medium-Sized Enterprises (SMEs) are competing and cooperating in the global context. As a result, a "network competition" is emerging, which can be traced to an increasing expansion and density of economic and other social interactions. The competence of networking on a global scale thus becomes a central demand in the process of globalization. The globalization of competition can be defined as a feedback-loop, in which companies strive for competitive advantages by global differentiation and integration of their activities and products and thereby reinforcing the increasing demand for competences in global competition. This feedback-loop is marked by increasing dynamics, so that the competence to cope with the evolutionary dynamics of globalization becomes the second central demand for management. A management of globalization thus should be based on three elements: the classical competence of internationalization in the sense of building up international business activities, the competence of global networking and the competence of evolutionary dynamics.