Cybercentrismand the New Cybergens, 2nd Editionby Dr. Lansing A Gordon

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CYBERCENTRISMAND THE NEW CYBERGENS

2nd edition

Dr. Lansing A. Gordon Woodbury University

San Diego

Dr. Lansing A. Gordon, currently Assistant Professor of Marketing in the School of Business at Woodbury University, bases many of his insights on careerexperience prior to his academic appointment: senior research analyst, advertising agency creative director, advertising new accounts manager, marketing & development specialist, marketing communications manager, fundraising manager, and television producer for NBC. His doctoral dissertation—Cybercentrism, A Reinvention of Strategic Nomenclature for e-Commerce: An Issues and Strategies Thesis Focused on Industrial Automation Segment Analysis—was researched with the University of Western Sydney, Sydney Graduate School of Management, Australia.

Cover and interior art: Lansing A. Gordon Back cover photo: Kenny Wong

Copyright © 2007 by Lansing A. Gordon

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or using any other information storage and retrieval system, without permission in writing from the publisher.

First published in the United States of America in 2007 by University Readers

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TABLE OF CONTENTS

Preface From Techspeak to Tactical: A New Centrism for a New Century v

Foreword vii

Chapter One Cybercentrism: The New Marketing Management Model for A Post-Global Era 1

Chapter Two Cyber Leadership: The New Challenges of An Open Enterprise System 41

Chapter Three Factory-To-Business: Discovering The Missing Link in Fulfillment Strategies 75

Chapter Four The CyberGens: Rise of A Cyber Media Consumer 103

Chapter Five Global e-Markets: Cybercentric Lessons in Accelerated Realities 137

Chapter Six Cybercentric e-HQ in Crisis: Advertising and Public Relations Media Strategies 177

Chapter Seven Cybercentrism’s New Value Proposition: 3G and Customer Empowerment 201

Chapter Eight Cybercentrist Insights: The Way Forward 221

Appendix 1. A Cybercentric Teleology 247

Appendix 2. Learning to Speak The Language 259

iii

iv

PREFACEFROM TECHSPEAK TO TACTICAL: A NEW CENTRISM MODEL FOR A NEW CENTURY ______________________________One day in 2001 the e-commerce bubble burst. A world of overpriced, steeply speculated software companies, with Silicon Valley at its epicenter, collapsed. An entire e-business market based upon the proven, tried and tested tenants of globalism or Geocentric modeling had crashed. Out of the devastated ruins of the global village came only silence…the e-business tree had fallen in the forest but nobody knew why, so it didn’t make a sound. B2B was renamed ‘Back-to-Basics’ in defeat.

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While the pundits and old school strategists frantically searched for answers in their derailed Geocentric modeling, new systems visionaries, industrialists, researchers and hardware / software imaginers were busy creating a cyber business platform for the new millennium. For nearly a decade a phantom market has slowly emerged identified only by techspeak whispered within the towers of IT. It is the missing link with many in management only sensing its reality. It is the ‘centrism’ of a new century but represents a dangerous blind spot for strategists who can’t explain it because they can’t see it. And they can’t see it because they don’t know what to call it…………………………..until now.

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SPECIAL THANKS Sincere appreciation is extended to Frost & Sullivan for their continued interest in this book.

Frost & Sullivan, founded in 1961, has 26 global offices with more than 1500 industry consultants, market research analysts, technology analysts and economists. Their mission is to research and analyze new market opportunities for corporate growth. They are the world leader in growth consulting and the integrated areas of technology research, market research, economic research, corporate best practices, training, customer research, competitive intelligence and corporate strategy. www.frost.com/

CSC Center for

CybercentrismStudies

In Association with the Woodbury University

School of Business

vii

Napoleonic Globalism

A Cybercentric mindset has struck fear in the hearts of Napoleonic-styled competitors laying siege to ‘global village’ markets. Geocentric, bricks-and-mortar modelers suffer from no longer being relevant. Frontiers, boundaries and borders once securing nations, companies and their markets are vanquished. The new marketing field generals must abandon their grip on the bricks and mortar ideas of ‘country of origin’ branding and ‘founding fathers’ mission statements and enter into a more unpredictable, precarious, cyber-centrically challenged world. Collaborating virtually across geographies and industries is replacing vertically integrated businesses…speed and flexibility are winning the market share wars against immobility and size. Cybercentric strategic battle plans enable marketers to control the standardization of transnational, one-on-one marketing messages with devastating accuracy and plan cyber incursions that bypass traditional print and TV media for computer broadcast television, video streaming, podcasts and webinars within the blogisphere, cybersphere banners, pop-overs, flashers and hovers, as well as short films to mobile handhelds and other cellphone marketing techniques.

Managing the changes in e-

marketing is sort of like Napoleon

arriving at the siege with ground troops and ladders to scale the castle walls and

realizing that there is no castle or wall. He receives word that his coveted, major markets have been invaded from cyber

space by aggressive virtual knowledge marketers, he is

loosing market share and his customer base is bleeding

away. Josephine will not be happy with

this news.

CHAPTER ONE CYBERCENTRISM: THE NEW MARKETING MANAGEMENT MODEL FOR A POST- GLOBAL ERA

THEORY

A THEORETICAL REVIEW OF THE EPRG SCHEMA AND THE NEW CYBERCENTRIC MODEL PREMISE

To study the theory of marketing we could begin with the idea of a ‘storefront’. As manager you stand inside your establishment and look out the window of your storefront. Outside you see people, traffic, customers, prospects and competition. The view has changed dramatically from the last century to the new one. We used to see competitors move in across the street. This would increase competition for a limited number of prospects. Indeed, competitors could steal your customers. Today you can’t conceptualize marketing without putting the ‘international’ prefix before it.

As an example let’s say you own a convenience store with a few tables and chairs where someone could dash in to buy milk and bread or stay longer and order a sandwich and a cup of coffee. Your competition would range anywhere from the local donut shop, 7-Elevin or Circle-K, to Starbucks or even a gas station with mini-mart. Now a new store called Famima opens across the street. Famima is a Japanese mini supermarket and sit down deli convenience chain with plans to open another 240 stores in the US by the end of 2009 (psfk, 2006). Famima is a Japanese-style local convenience store offering popular delicacies such as sushi, noodles and Asian groceries plus banking services and a stationary/newsstand. Famima is focusing on the ‘upscale convenience store niche’ and may draw away your better customers in cosmopolitan, urban environments. Your microwaveable burritos may be no match for sushi and steamed dumplings.

There is not such thing as domestic competition where your customers and market share are defended by territorial dominion. Yet your market plan may have been blindsided because of the limitations of your Ethnocentric marketing view. This protective, isolationistic veneer has been torn apart by foreign competitors and an ever increasing virtual shelf space in a fast growing virtual marketplace.

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As luck would have it you inherit a large printing plant from a long lost great uncle. The same premise applies when doing e-business on a cyber business playing field. You cannot expect to operate a company website for volume printing services and expect to garner most of your customers within fifty miles of your printing plant. Not only might you engage customers from other parts of your region (Regiocentrism) you might get customers from both domestic and overseas locations (Polycentrism). Indeed, your could expect to compete with large domestic, Asian, and European competitors (Geocentrism) for the same clients. Now the concept of the ‘storefront’ changes. Instead of seeing pedestrians and traffic and competitors across the street you are viewing an entirely virtual vista.

Antique Geocentric mindsets would see regional differerences in consumer purchase behaviour, local languages and currencies as obstacles to doing business. Your e-commerce, virtual storefront on the Web sees these differences as opportunities, with the utilization of translation and currency software engines providing conveniences for your cyber customers. Unfortunately there are few sources offering the strategic models and terminology that will help you think in Cybercentric terms and strategies. Companies are still struggling with increasing pressure to establish platforms of business operations both on the bricks-and-mortar level as well as virtually. Doing business and collaborating with business partners in home markets, foreign markets and concurrently in a cyber realm can be strategically daunting. This is where the new Cybercentric nomenclature found in this book can provide meaningful insights.

What becomes problematic is that consultants, strategists, researchers and educators still use many of the concepts and terminologies common to a past era. The realities of e-commerce are frequently seen through the eyes of globalism, with strategies often devised using outmoded terminologies and antiquated methodologies.

In offering solutions, this book provides a model that would advance the EPRG theory of international marketing commonly used by global institutions such as the United Nations. I refer to many United Nations publication templates (Carter, 1997), with a view to the basic tenets of the Perlmutter (1969) EPRG architectural concept of global business. Such EPRG premise discussions are commonly available on-line (Example: www.tt100.biz ).

From the Ruins of the Global Village: Beyond EPRG The term global village is used to describe organizational structures that still dominate the business activities of many major corporations. Global village management attitudes (Toyne and Walters, 1993) represented a mix of dated, ethnocentric and polycentric management formulations regarding business management and global marketing strategy.

Ethnocentric managers tend to view all foreign markets as similar to the extensions of domestic markets. At the other extreme, polycentric management concepts view all foreign markets as highly individualistic. A middle-of-the-road approach identifies geocentric management practices where there is an awareness of the similarities and differences across markets.

The global village concepts that embrace geocentrism may be short on strategy in some situations and long on strategy in others. What is missing is the virtual view of a standardization of some if

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not all of the strategic mix (Gillespie, Jeannet, Hennessey, 2004). Geocentrism today reflects current thinking in globalism as it represents dated 'bricks and mortar' communications and sales methods and management thinking. A change from a Geocentric model to a new Cybercentric model approach is advocated in this book. Global business strategies evolving over time may suggest the emergence of a 'post-global reality' (Saffo, 2002) that, it is argued, urgently needs a newly designed 'centrism'.

A post-global era is described as a 'shift' or 'erosion' (Saffo, 2002) of the nation-state's monopoly on power in the international business arena. Cybercentrism modeling terminology suggests the emergence of a virtually dominant business world that could eventually cause national boundaries to dissipate in the minds of consumers and businesses with country-of-origin becoming less important and company-of-origin becoming more important.

Cybercentrism applied to marketing strategy weighs in heavily for brand name development and strengthening as opposed to a ‘tribal’ (Ethnocentric) approach where brands are altered to fit schizophrenically among major markets around the world. To this is added a 'new and growing territory of cyberspace' (Saffo, 2002). A post-global era may reflect shortened product lifecycles and markets that may have become more similar than different, as well as more competitive and unstable.

The terminology proposed in this book represents Cybercentrism within a virtual business culture where universal values on a massive scale represent an aggregate of commonly held consumer profiles with products and branding standardized for uniformity. Brand continuity or universality is critical where a company’s identity is centered within their home page on the Web. Corporate identity must exist virtually and be accessible to every major market globally and overcome the common barriers of various currency denominations, trade restrictions and language differences. Whereas a Cybercentric post-global business culture may now exist in parallel with many, persistent global village realities, without cyber orientations in new e-markets management can get rapidly lost.

Key nomenclatures that are required for identifying new market segmentation and management methodologies might not yet exist. The migration of e-commerce technologies from consumer markets into the manufacturing sector, driven by the profusion of Internet-linked networks made applicable to productivity-enhancing machinery and equipment, may also have eclipsed the current knowledge base. The cornerstones of global management philosophy, as represented by the EPRG model (Chakravarthy and Perlmutter, 1985), may have shifted.

The Hunt for Unarticulated Nomenclatures

The vastness of the new ‘cyber store front’ looks far beyond local pedestrian traffic. The corporate website becomes an engine of commerce and leaps time zones, language and social customer differences and competes with companies half your size and twice your size. These concepts are vital to strategic success. The effects of Cybercentrism on pragmatic, competitive and ideological elements within e-commerce systems environments portrays the strategic roles of the newly identified nomenclatures in advancing company failure prevention amid outmoded management models, emerging market segments and technological change.

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Figure 1.1 shows a listing of nine key factors (first column on left) and explores these factors through the EPRG declensions. The question is then posed…what comes next?

Figure 1.1. Orientation of a Global Firm: The EPRG Model

Factors Ethnocentric Polycentric Regiocentric Geocentric ?Mission Profitability

(viability) Public acceptance (legitimacy)

Bothprofitability & publicacceptance

Same as Regiocentric

?

Governance Top-down Bottom-up (each subsidiarydecides on local objectives)

Mutually negotiatedbetween region and it subsidiaries

Globalintegration and nationalresponsiveness

?

Strategy Globalintegration

Nationalresponsiveness

Regionalintegration and nationalresponsiveness

Globalintegration and nationalresponsiveness

?

Structure Hierarchicalproductdivisions

Hierarchicalarea divisions, with autonomous national units

Product and regionalorganization tied through a matrix

A network of organizations(including some stakeholders and competitor organizations)

?

Culture Home country Host country Regional Global ?

Technology Mass production Batch production

Flexible manufacturing

Flexible manufacturing

?

Marketing Productdevelopment determined primarily by the needs of home-countrycustomers

Local product development based on local needs

Standardizewithin region, but not across regions

Global product, with local variations

?

Finance Repatriation of profits to home country

Retention of profits in host country

Redistributionwithin region

Redistributionglobally

?

Personnelpractices

People of home countrydeveloped for key positions everywhere in the world

People of local nationalitydeveloped for key positions in their own country

Regional people developed for key positions anywhere in the region

Best people everywhere in the world developed for key positions everywhere in the world

?

Source: Adapted from Balaji S. Chakravarthy and Howard Perlmutter, "Strategic Planning for a Global Business, Columbia Journal of World Business, Summer 1985, pp. 5-6, Columbia Journal of World Business. Adaptation by John A. Pearce II and Richard B. Robinson, Jr., Strategic Management: Formulation, Implementation, and Control (7th

ed.), Boston: Irwin McGraw-Hill, p. 125.

The constant reformulation process involved in balancing and restraining forces of control of the workplace and in brokering broader constraints of international marketing are complicated by the arrival of e-commerce, e-manufacturing and the Internet. The knowledge gap represented by the empty column to the right of Figure 1.1 argues for the appearance of universal digital terminology and concepts eclipsing the global paradigm. Evolving marketing strategies are compared to management models and a case for Cybercentrismis presented. The writer suggests adding the Cybercentric ‘C’ to EPRG. These arguments are

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placed into the context of the e-business organization experiencing an emerging era of swift technological change.

An EPRGC Vision of Centrisms Achieving an ‘EPRGC vision of Centrisms’ is all about understanding the conceptual split between old and new marketing management models…from the old industrial economy to a new electronic-based one. This begins to become evident in the comparative elements of management, corporate structure, company goals, planning, market positioning, outsourcing, employment and strategic vision, between Geocentric and Cybercentric models. Graphic 1.1. shows the fifth element of the EPRG extension identifying Cybercentrism as the next ‘centrism’.

Business strategists approaching this virtually-extended enterprise concept are dealing with a heterogeneous computing environment connecting different hardware platforms, operating system environments and user interfaces in order to seamlessly communicate, collaborate and evolve company systems, and innovate product development and sales strategies. Cybercentrism is identified in Graphic 1.2 as the next management protocol in the virtually-extended enterprise. It is also offered as the dominant precept of the acculturation of new consumer CyberGens. The CyberGen must be seen as a knowledge worker, consumer and manager. Concerns encompassing the issues of institutional change in value creation (Popper, Wagner, and Larson, 1998) as well as outsourcing i.e. the ‘erosion of the externalized workforce’ (Kouzman, 1999) appear as unchartered territory to marketing strategists. Graphic 1.2. shows a virtual networking e-business platform consisting of B2C, B2B, F2B and C2C.

Ethnocentrism

Polycentrism

Regiocentrism

GeocentrismCybercentrism

Regio: Commercenow extends to someregional markets asin Asia or Europe.

Geo: Commerce isnow geographical with a full globalview of business.

Poly: From one tomany local markets incountry of origin.

Graphic 1.1. Cybercentrism: The Fifth ‘Centrism’ Model

ManagementModel MaturationAmid Emerging

Markets andTechnologies

Ethno: Ethnic focusof commerce limitedto single major marketor country of origin.1.

2.

3.

4.

5.

Source: Perlmutter (1969) EPRG; Gordon (2005) CyberGens and the New Cybercentrism

Cyber: Virtual networking technologywith standardized e-business platforms: B2C, B2B and F2B, eclipsing ground-basedideologies to a world of I2 broadband.

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CyberGens: The Quest for a True e-Commerce-linked Consumer Segmentation There is an undeniable link between the virtual connectivity of a pure CyberGen consumerist ideal and the new e-business evolution from the commercial choiceboard environments of virtual retail to manufacturing-on-demand changes to the factory floor. Without a clear understanding of both e-commerce and e-manufacturing and an on-demand world, today’s companies cannot fully grasp the true nature of competition from product creation to marketing management. Graphic 1.2 shows elements to be Business-to-Consumer (B2C), Business-to-Business (B2B), Consumer-to-Consumer and the linchpin concept of Factory-to-Business (F2B) introduced in this book.

To compete in the post-global era companies must virtually expand, leveraging not only the power of the Internet and internal communication and control systems but doing so with the full realization that the new electronic economy is only in its infancy and that the changes ahead will redefine intelligent networks and virtual business relationships. B2B, B2C, F2B transparent multidimensional cyber networks will blend buyers, suppliers, e-manufacturing and users seamlessly. The ability of companies to understand and compete in a world of electronic markets and collaborative relationships will depend upon the efficiencies of their employees, the people who manage them and a full understanding of the new marketing challenges determining the retention of their customer base and a standardized approach to prospects.

Every practitioner in the business of managing the marketing, advertising, public relations, operations and fulfillment of their business is concerned with one or more of the nine factors shown in Figure 1.1. Each will be examined in detail in terms of CyberGens and the new Cybercentrism Model. The author’s effort is, first, to clarify and explain where present centrism

Geocentrism

Cybercentrism

Geo: Commerce wasnow geographical with a global villageview of business.

Graphic 1.2. Cybercentrism: The Fifth ‘Centrism’ Model

4.

Source: Perlmutter (1969) EPRG; Gordon (2005) CyberGens and New Cybercentrism

Cyber:Virtual networking e-business platformwith standardized e-business platforms: B2C, B2B and F2B, eclipsing ground-basedideologies to a new world of e-commerce andInternet 2 (I2) broadband technologies.

B2B

B2C

F2B

CyberGensWith the advent of Cybercentrismcomes a new profile of virtual manager, knowledge workerand on-line customer/prospect,transforming the old industrial economy to a cyber one.

C2C

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concepts have failed management and, second, to provide solutions offering logical, practical alternatives within the proposed model of Cybercentrism.

Fascinating concepts of the evolution of consumerism outline a new breed of consumers, from the media beginnings of print and radio, migrating from DepressionGens to present day CyberGens, readers will obtain a grasp of the nature and potential of Cybercentrism…the new centrism for a new century.

Flawed Ethnocentric Revisionism and the Need to Move On

In 2004 AC Neilson took what seemed to be a giant step backward in declaring that ‘consumer tastes have been growing more and more tribal’ (Taylor, 2004). In ‘Tribes, Brands and the Fate of Consumer Marketing’ published by Lyle Anderson Company, ‘…the American social landscape, and indeed the marketing landscape, is growing increasingly Ethnocentric’ (Taylor, 2004). Nothing could be further from the realities of today’s cyber-business playing field where twenty-somethings and younger have consumer tastes that are more similiar than different….where fashion, music and electronic entertainment show little resistance to language differences and suggest a vast unification of purchase patterns, cultures and tastes.

In light of recent news linking information and communications technology (ICT) adoption to national competitiveness and productivity (Deign, News@Cisco,2005) and the emergence of a broadband boom with worldwide revenues of modems, routers, and gateways totaling $4.6 billion in 2004 (Howard, Infonetics Research, 2005) either one of two things is true. Either AC Neilson has run out of room within their Geocentric strategic premise and is literally going backward to Ethnocentrism or they are simply not paying attention.

As we know, Ethnocentrism is centered at the very early stage of global strategic marketing maturation and, in ideas examined here, AC Neilson appears to be addressing the realities of marketing advancements in the only context they can understand using antiquated EPRG precepts. How can one be blind to the dramatic accomplishments achieved by such companies as Cisco, Siemens, Thomson, Ambit, US Robotics, D-Link, Motorola, SMC Networks, Sumitomo and so many others? Today’s cyber culture does not exist in a deepening, primitive cultural purchase preference quagmire that has its basis for marketing rationale in the Geocentric old school of cultural and sociocultural isolationism.

Examining this conundrum it becomes quickly evident that the research of marketing trends by major research firms and marketers, as well as the teaching of marketing principles in the content of popular marketing and management texts, has to some degree run to the very edge of EPRG’s Geocentric limits beyond which lies a strategic abyss more commonly seen as a calamitous knowledge gap.

The conceptual determination of Cybercentrism as presented here runs against the social landscape directions set by AC Neilson (Taylor, 2004). A Cybercentristic view of the future steps, beyond business culture as isolative, global tribalism within a global-village view, and

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embraces the virtual world of e-business. Included in this approach is content suggesting ‘reasons why’ to include Factory-to-Business (F2B) and media waves arguments.

The ‘Universal/Cybercentric’ Theoretical Premise

Examining the distinctive orientations of management of international companies during the global-village era (Yip, 1989; Baker, 1990) one encounters the well-known EPRG blueprint identifying four types of management perspectives toward going global. They are identified as Ethnocentrism, Polycentrism, Regiocentrism and Geocentrism or EPRG (Perlmutter, 1969; Heenan and Perlmutter, 1979; Perlmutter and Chakravarthy, 1985: Chakravarthy and Perlmutter, 1985). In 1965 Perlmutter devised the EPG segments of the EPRG model and published his findings in the Columbia Journal of World Business (Perlmutter, 1969) while Heenan and Perlmutter (1979) together devised the Regiocentric model for the EPRG segment. Since then there has been no advancement to the EPRG rationale.

In Figure 1.2, the Universal entry under Marketing Strategies, across from Cybercentrism, reflects the changes in the marketing premise where standardized products, replacement parts and services eclipse tastes and preferences for the benefits of price and performance, and take on a universal similitude. Important in marketing theory is the premise of ‘the utility of standardization’ and the importance of providing a universal virtual brand presence to diverse sociocultural buying groups.

Figure 1.2. Cybercentrism: Evolution Model of Marketing Strategies and Concurrent Management Models

Marketing Strategies Management Models

1 Domestic/Regional Ethnocentrism

2 International Polycentrism

3 Multinational Regiocentrism

4 Global Geocentrism

5 Universal CybercentrismSource: Perlmutter, 1969; as modified by Gordon, 2006.

This Universal/Cybercentric premise effects the removal of many of the restrictions that have kept companies in global bureaucratic organizational limbo, and suggests new business and leadership dimensions for a digital economy. There will be, increasingly, an impact on the 'valuechains' (Wigand, Picot, and Reichwald, 1997, p.293) that, with Internet-based business platforms, will bypass the wholesaler and some distributors in the traditional purchase pattern PLC, and eliminate transaction costs associated with manufacturing middlemen and other intermediaries. This disintermediation is part of an ‘e-Skip-Gen-Effect examined later in the book.

The Universal/Cybercentric premise also approaches the idea of information value differently from Geocentrism. Instead of centralized command of information where control of information is power, this virtual extension of the enterprise gives away information. The vast distribution of information to management, suppliers and consumers represents a paradigm shift in the concept of information value as articulated in Cybercentrism. Linked strategic marketing orientations with management models consistent with ethnocentrism,polycentrism, regiocentrism and geocentrism or the EPRG model (Perlmutter, 1969) with our addition of Cybercentrism changes the EPRG acronym to EPRGC.

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Enterprise Horizon

Sales IslandsAssociatedPartners &Venture Groupsin isolation.

Production Islands

GEOCENTRIC CENTRALIZED MODELGlobal Era shows value chains linked by ground-basedsystems furthering the institutionalization of most business processes and their traditional organizational structures. Geocentric systems isolation is depicted by ‘sales islands’and ‘islands of production’.

SBU Individualized Profit Centers

GeocentricOrganization

Visual 1.1. Geo-Centralized Model

Open e-Manufacturing Links Production to Manufacturing-On-Demand

Enterprise Horizon

Enterprise AchievesVirtual Lift-off

CYBERCENTRIC DECENTRALIZED MODELThe Cybercentric Model restructures the organization to a virtual process orientation with organizational structuresthat are ‘cyberspheric’. Islands of sales and production areeliminated with interconnectivity and transparency leadingto atypical, information-intensive corporate entities.

StrategicBusinessNodes

AssociatedPartners &Groupsconnected.

CybercentricOrganization

Visual 1.2. Cyber-Decentralized Model

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Cybercentrism: The Knowledge-Based, Virtual Step Beyond Global Village Doctrine Visuals 1.1 and 1.2 depict the ground-based, technologically isolated corporate entity in virtual transformation. The advent of e-manufacturing and the ‘open systems’ software applications have made the factory floor virtually connected and lifted the centralized organization into the Cybersphere. Sales islands become interconnected nodes. Partners and groups enjoy seamless R&D and product development. Perceived as a global information economy structure organized from its headquarters and affiliates around the globe, the financial, legal, marketing and management functions of Geocentrism were performed horizontally across the management spectrum. This platform structure is now seen as vertical in view of changing technological and market realities. The traditional storefront has been transformed into a vast cyber array of 24/7 market access where customers not only walk in…they virtually drop in.

The most dramatic manifestation of the collapse of global-village doctrine, identified as being within the Geocentric precept and the latest management construct of the Perlmutter (1969, et al.) EPRG model sequence is the essential multinational-to-virtual reconfiguration, and the effects this has had on management and the knowledge worker.

As the organization considers transforming itself into a "nodal company" (Hamel and Prahalad, 1996, p. 205), the concept of service becomes ‘cyber’ as interactive media, remote machine diagnostics, satellite-based communications, collaboration and guidance systems become increasingly operational. Rugman (2001) writes about the eventual end of globalization and contends that there is a diminishing global economy and fading homogeneous marketplace.

Rugman (2001) argues that the vast majority of executives and managers, in all business activity that is now taking place, occurs in a triad of regional blocks: North America, the European Union, and Japan. We may add China and India to this list of cyber business nodes. This universal knowledge-based business culture is being formed in what Hinrichs (1997) suggests is an environment where a digital economy requires digitally literate management.

The Multinational Corporation is Dying Our purpose in this chapter is to devise a fifth EPRG segment. Referring to Figure 1.1. the space next to Geocentric was empty. We have added Cybercentric in that space.

Figure 1.3. Cybercentric: A Fifth Model for EPRG

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric

Cybercentrism now appears as the next ‘centrism’. We have established that a fundamentally new business model is emerging that has, metaphorically, moved the earth and dispelled the very bricks and mortar upon which the global village was built. This Cybercentric/Universal model is evolving within the advance of Internet technologies and is transforming terrestrial industry structures and business environments into what we have identified as the virtually-extended

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enterprise. The virtual community to which the following Keegan quote identifies is what we call Consumer-to-Consumer or C2C.

“The ‘product value proposition’ is changing. On-line, multimedia-enabled networks create powerful virtual customer relationships and shift the basic economic business model values from vendor to customer…mass marketing to mass customization…from reactive marketing communication to user-interactive…from the goals of opening a new corporate site, to, instead, establishing and managing a virtual community as a commercial enterprise” (Keegan, 1989, p. 30).

The global (Geocenric) corporation is dying. It is being overtaken by a universal or virtually linked (Cybercentric) corporation, different not just in terminology but in focus. Internet technologies have brought dramatic trends in the interactive media arena of e-commercialism, shaking such foundational marketing concepts as typological and hierarchical management precepts that dominated the bricks and mortar global arena. The distinctly separate foreign-versus-domestic concepts of the multinational strategist are evolving into a trans-global, virtual business culture, where the word ‘foreign’ is becoming obsolete. In the era of e-commercialism now upon us, concepts of traditional corporate structure are gradually disintegrating (Harbison and Pekar, 1998):

“The wave of delayering, restructuring, and reengineering has left many companies in a twilight world between the old and the new. Traditional management processes have been discarded and dismantled; new ones are not always comfortably in place” (Harbison and Pekar, 1998, xiii).

The premise of company growth, where continuous efforts to provide value to the marketplace over a prolonged period of time would ultimately result in achieving global status, is collapsing. High losses among proprietary firms might be associated with an emergent, radical stage of an industry cycle. The pioneers of technologies that are competing for market share may incur losses (Hooley and Saunders, 1993). Collaboration by industry leaders to duplicate new technology movements may attempt to head off new market entrants and retain customers as a form of defense against unprecedented and threatening change. But there can be no credible reliance on old and outmoded Geocentric theory.

E-commercialism has disenfranchised the feasibility of the traditional management premise. The global market environment is in free-fall. In the new Cybercentric world, new market entrants can appear in the virtual marketplace beside long-time market leaders as equal-access competitors.

Threats to the Current Business Model Since the advent of the migration of e-commerce technologies from eBay down to the factory floor, beginning in 1996, management has been asking the kinds of questions that may have alerted them to the dangers of unconventional and unpredictable changes in the market. Tracking the evolution of business strategy, one could argue that organizations can no longer maintain that the Geocentric management model and its strategies of extension and product 'adaptation and creation' (Keegan, 1989, p.10) can continue to represent market reality. The common rationale

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for the Geocentric-based firm developing marketing communications globally, for example, is most often extend, adapt, or create. The rationale for extending present messages, adapting these messages or creating new ones is predicated upon the economic, social, and cultural dimensions in markets around the world.

"Are the potential threats to the current business model widely understood? Do senior executives possess a keen sense of urgency about the need to reinvent the current business model? Is the task of regenerating core strategies receiving as much top management attention as the task of reengineering core processes?" (Hamel and Prahalad, 1996, pp. 1-2).

Companies that continue to operate using this rationale may fall out of competition with markets that have become based on a new virtual platform that operates on Internet connectivity.

Digital Commerce: Finance

Perhaps the greatest and most profound change regarding the emergence of global markets has been the revolutionary changes in corporate financial structure and the world economy. Capital movements, not trade, have created a universal economy rendering the macroeconomic concepts of the nation-state increasingly less applicable (Bartlett and Ghoshal, 2000, pp. 94-98).

A Universal Digital Economy

Figure 1.4. Finance

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Finance Repatriation of

profits to home country

Retention of profits in host country

Redistributionwithin region

Redistributionglobally

Highlyinteractive digital economic universe, CAEE

Legend: Cybercentric Actionable Economic Elements (CAEE)

A vast network of supercomputers, linked by broad bandwidth fiberoptic cable to universities, teaching hospitals, scientific research centers interfaces an ‘international aggregation platform’(Martin, 1996, p. 50) or a universal business environment that knows no boundaries. Open book accounting, a natural for e-commerce, incorporates the on-line disclosure of cost information utilized within B2B supply chain environments in price control (Hoffjan & Kurse, 2006).

Where users can access the Web from any global market and access the website of a company offering supplier, business or consumer products and services, they are exposed to a level playing field offering exactly the same prices, company images and service capabilities. A virtual market eliminates the time values of extension and adaptation. Extending into markets is instantaneous and adaptation is in the server, not on the street.

Such a universal, knowledge-based architecture means a company can provide services and sell products in cyberspace to anyone, anywhere, at any time 24 hours a day, 365 days a year, in five major languages without leaving the office and without opening a branch office.

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'No matter how large or small the company or organization, the global barriers that have traditionally limited multinational transactions no longer apply' (Martin, 1996, p. 47).

Less capital-intensive global firms were, in the past, less affected by economies of scale. But with the advent of worldwide communications powered by the PC and the Internet methods for greater opportunities for financial gain have been transformed. As the terms global and universalare used at times to describe separate concepts, it is appropriate to digress for purposes of definition. According to Kasvi, Nieminen, Pulkkis and Vartiainen (1998) in studies analyzing knowledge management in e-business, the word ‘global’ refers to something that pertains to or embraces the whole of a group of items, or that is comprehensive and total, or involves the whole world. This represents a working definition when starting to explore those processes that integrate the world into one comprehensive system:

"Global refers to the end stage of the process of globalization. The meaning of global is identical with an older social scientific notion of universal. The classics of social sciences did not write about global. They used the concept of universal instead. The classics of social sciences wrote, at the time, of increasing international integration where men had open minds in relation to global phenomena. Later, as national state-societies consolidated, much more narrow nationalistic social perspectives started to rule the social sciences. Now, in the 1990's, as globalization seems to be accelerating, globalization has become the catchword of the decade. It is important to grasp the close relationship between concepts of global and universal" (Kasvi, Nieminen, Pulkkis and Vartiainen, 1998, p. 168).

For our purposes we will distinguish between ‘global’ and ‘universal’. Hinrichs (1997, p. 192) uses the term 'Digital Economy' (also see Tapscott, 1996) to describe forces that are changing the traditional economic and financial concepts of globalization. This goes counter to the Kasvi, Nieminen, Pulkkis and Vartiainen (1998) idea that universal was more classical and precedent to global. The move from ground-based systems to virtual systems and electronic media would suggest a movement upward. Systems agility would seem to evolve from ground-based design to digitally-based design, or from global to beyond the globe or universal. The knowledge culture impact of a global-turned-universal paradigm, or an evolution to a Universal Digital Economy may be the best way to describe the forces that are revolutionizing the enterprise, influencing a corporation’s operations, effecting working efficiency, and impacting its users. 'Digital commerce is antithetical to brick and mortar' (Martin, 1996, p. 190).

The traditional, Geocentric, multinational strategic approach was based upon an economic assumption that each national market was unique and independent and assumed that a company's competitive position in all of its markets was linked by financial and strategic interdependence. It was recognized that firms that operated their local companies as independent profit centers found themselves at a disadvantage to competitors playing a 'strategic game of cross-subsidizing markets' (Bartlett and Ghoshal, 2000, p. 97).

The advent of Cybercentric/Universal digital economy may show that there is no good financial reason for managing a firm from any perspective other than universally, with funds generated in one market subsidizing its position in another.

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A Cybercentric modeled company is not without a bricks and mortar location. Pasternack and Visco (1998, p. 218) use the term 'home universe' when describing a financial management style that has a wide network. As we proceed into an explanation of the nomenclature of a Cybercentric concept, note that we have made distinctions between the terms global and universal, with globalization and the global economy being portrayed as the forerunner to Hinrichs’ (1997) Digital Economy. "The Digital Economy requires a new kind of businessperson: one who has the curiosity and confidence to let go of old mental models and old paradigms" (Hinrichs, 1997, p. 192).

Companies that have discovered the competitive advantages of business-to-business (B2B) Internet-based transactions are being transformed out of the Geocentric model. But having established the possibility of the Cybercentric model, it is further argued that B2B, as a supply chain procurement discipline, is woefully inadequate in identifying the emerging segmentation of how e-business really works. “Lifeways based on AIT (Advanced Information Technology) are not only real and distinctly different, they are transformative. The transformative potential of AITs lies in the new way they manipulate information” (Hakken, 1999, pp. 1-2).

Cybercentric Marketing Communications

In our theoretical discussion it is important to make clear the departure point from what has existed to what is proposed to exist. The following quotation exemplifies the mindset of the outmoded Geocentric marketer:

"The requirements of effective communications and persuasion are fixed and do not vary from country to country. The specific advertising message and media strategy must often be changed from region to region and must frequently be adapted from country to country to correspond with the requirements for effective communication and persuasion in the particular region or country" (Keegan, 1989, p.496).

This quotation has the indelible mark of flawed Geocentric strategic thought. It reflects unawareness to the changing directions of business-to-consumer (B2C) or business-to-business (B2B) communication. Instead of marketing messages being sent to find prospects, the Internet now offers a media where the prospect goes looking for prospective companies with which to do business. This reverse of direction in the search aspect of marketing has, to some degree, overturned the Geocentric premise. Companies are struggling both to maintain familiar technologies and management models while experimenting with new platforms upon which to base marketing media decisions. Streaming video advertising has shown significant growth.

Prospects can access a company website, request language translation in their native tongue, review products and services set in a single, generic format and request additional information or make a purchase directly or be referred to a local dealer or distributor. This concept of the universal store begins to unravel the tastes and preferences foundation of Geocentric strategy and undermines ‘tribal branding’ presuppositions advocated by ACNielson (Taylor, 2005) and supports others (Watters, 2004).

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Figure 1.5. Marketing

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Marketing Local product

development based on local needs

Productdevelopment determined primarily by the needs of home-countrycustomers

Standardizewithin region, but not across regions

Global product, with local variations

B2C, C2C features of standardizationof products and marketingmessagestrategies.

Legend: B2C Business-to-Consumer

There are, of course, certain products and services that lend themselves well to 'advertising extension' (Keegan, 1989, p.497) from a consumer standpoint. But, where the business sector is being transformed, standardized products, replacement parts and services eclipse tastes and preferences for the benefits of price and performance and take on a universal similitude even as consumers throughout the virtual commercial world become more similar than different.

With increasing parity in features and benefits among products on the Web, branding, in the Cybercentric model, becomes more important than ever, as there may be less to distinguish products one from the other. In the marketing context every firm faces a broad range of strategy alternatives. The firm with domestic roots considers international, multinational and global markets. It is argued that those firms not considering a Cybercentric or virtual marketing strategy may be at a great disadvantage in concurrent areas of focus including new management models, manufacturing capabilities and other performance and policy considerations.

An understanding of global marketing as incremental is, at its foundation, flawed in today’s virtually empowered business environment. All marketing is global. The Keegan premise is locked in dated Geocentric strategic philosophy. If all major markets in the world have access to your company website, products and services, this access has no time limitations. Markets cannot be entered sequentially. They must be entered simultaneously. Product launches must appear in all serviceable markets in tandem and marketing campaigns must not only impact major market consumers simultaneously, the message must, by nature of access to the company home page, be as standardized as possible. Marketing messages that favor ethnicity, cultural leanings or contain nationality overtones can be highly damaging if not managed beneath a well managed universal brand identity.

Figure 1.6. is an expanded concept from a United Nations publication template (Carter, 1997), with a view of the basic tenets of the Perlmutter (1969) EPRG architectural concept of global business. Stage Five, Universal/Cybercentric, is the added element.

New market entry and expansion must consider new value chain advantages brought about by technologies in the virtual realm. These are distinctive incremental orientations or stages ofmanagement of international organizations that may have changed with the advent of e-commerce. The virtually-extended enterprise and Cybercentric virtual realities may eliminate some sequential planning strategies heretofore an integral part of global strategy. To clarify the argument Keegan (1989) notes:

"Global strategy must begin with marketing. Which markets would we target in which sequence? What objectives should we establish for volume, share of market, sales, and earnings?" (Keegan, 1989, p. 291).

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Figure 1.6. Cybercentrism: Adding a Fifth Universal Stage to Global Evolution Doctrine

Management

emphasis

Stage One:

Domestic

Stage Two:

International

Stage Three:

Multinational

Stage Four:

Global

Stage Five:

Universal

Focus Domestic Ethnocentric Polycentric Geocentric Cybercentric* Marketing Strategy

Domestic Extension Adaptation Extension Virtual

Structure Domestic International Worldwide area Adaptationcreation

matrix/mixed

Virtually-extended enterprise

ManagementStyle

Domestic Centralized, top down

Decentralized, bottom-up

Integrated Cybercentrism model

Manufacturing Stance

Mainly domestic

Domestic Host Country Lowest cost worldwide

Manufacturing on-demand

InvestmentPolicy

Domestic Domestic, used worldwide

Mainly in each host country

Crosssubsidization

Crosssubsidization

PerformanceEvaluation

Domestic market share

Home country market share

Each host country's market

share

Worldwide SBU (Strategic

Business Unit)

SPMS and SBN (Strategic

Business Node) Source: Adaptation from 'Global Agricultural Marketing Management' (Carter, 1997) *Cybercentric or Cybercentrism, as a new nomenclature, has its semantic origins in the disciplines of machine intelligence, computer science, digital information feedback and control (Pangaro, 2001), as well as systems theory (Heylighen and Joslym, 1992). Legend: Strategic Performance Measurement Systems (SPMS): Strategic Business Node (SBN), a new nomenclature for this book, is defined as a Cybercentric progenitor of the Geocentric Strategic Business Unit (SBU).

What Figure 1.6 suggests is the emergence of a fifth stage of market evolution. Each stage is not limited by time, as the evolutionary process may come from emerging economies or developed economies. Stage Five adds a new managerial state beyond Geocentrism.

1) Stage One: This stage is domestically focused, with business activity concentrated in the home market.

2) Stage Two: This stage focuses on home markets but with exports (Ethnocentric). The firm practices home values, but it intentionally creates an export division.

3) Stage Three: The focus is expanded to multinational (Polycentric) with a high focus on adaptation to other markets.

4) Stage Four: Viewing the world market (Geocentric) as homogeneous is used to obtain economies of scale. Also, the firm responds to cost effective differences in various markets.

5) Stage Five: Differences in developed markets diminishes further as instant price parity is achieved through Internet interconnectivity and immediate access to product information. Cybercentrism, and the extensive proliferation of the virtual marketplace, with instant access to markets and corporate growth through acquisitions and alliances, may diminish and finally eliminate the stages concept of domestic-to-global evolution of firms and their markets.

Stage Five Performance Evaluation in Figure 1.6. identifies Strategic Performance Measurement Systems (SPMS). This is a real-time system technology, where operators can achieve second-by-second monitoring of front office sales, back office operations and plant floor activities, and allow users to get immediate feedback as to how efficiently the system is operating. SPNS emerges as a profound change in how management can view the entire performance of an enterprise in real-time.

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New accounting procedures within the SPNS require operational efficiency data as part of an activity-based management system (ABMS) utilized for accounting procedures. This represents a significant change as it reflects not only the new way cost accounting assessment is done in the plant but suggests the prospect of the utilization of data from the factory-floor-to-management’s-door in strategic assessment.

Cybercentric Organizational Management Structures: Facing the Risks

Changing the strategic direction of the firm has a high-risk assessment because it may entail establishing alliances with other companies to stay competitive with the latest technologies. This change entails dramatic alterations in the highly complex processes of assimilation and redirection. Other companies are changing strategic direction by shedding their businesses and laying off large numbers of workers in a concerted effort to simplify company structure before 'engaging in corporate fusion to try to keep in step, twisting themselves into all manner of new shapes and sizes' (Pasternack and Visco,1998, p. 31).

Figure 1.7. the factor of structure indicating that Cybercentric structure is different in that companies can be wholly virtual. New market entrants in old or emerging markets may be virtual with headquarters and brand identity existing on the Web. With larger, established corporations the structure may be virtually-extended.

Figure 1.7. Structure

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Structure Hierarchical

product divisions Hierarchicalarea divisions, with autonomous national units

Product and regionalorganization tied through a hierarchical matrix

A network of organizations(including some stakeholders and joint venture organizations)

Wholly virtual or a traditionally structured virtually-extended enterprise, SBN

Legend: Strategic Business Node (SBN)

Venkatraman (2000), writing in the Sloan Management Review about the evolution in structure of new business models, noted and identified a point of friction between traditional roles and rules of business and the new value propositions:

“New business models are those that offer, on a sustained basis, an order-of-magnitude increase in value propositions to the customers compared to companies with traditional business models. In doing so, these new models disturb the status quo and create new rules of business. Traditional companies cannot easily match the value propositions offered by these new business models without substantially altering their margin structures” (Venkatraman, 2000, p. 16).

A manager must now contend with a new model of nuclear value-sharing strategies that may place him or her at odds with the corporation’s traditional culture of control. The manager who can comprehend this seemingly attritional future of corporate change must cope with the following aspects:

replacing the premise of physical selling space with virtual selling space i.e. from a ground-based Strategic Business Unit (SBU) to the network concept of a Strategic Business Node (SBN) changing the concepts of acquiring customer brand loyalty to the 'ownership of customer relationships' (Hagel and Armstrong, 1997, p. 109). Relationship branding is

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simply getting the consumer to feel that the image of a brand embodies his or her personal and peer group values. evolving the core value of interactivity and user-control among management in a new e-media era.anticipating trends toward dramatically expanded markets and services to include virtual provision of maintenance optimization, industrial supply chain planning, and supplier enablement.recognizing the importance in the shift of power away from the corporate vendor to the consumer, and away from traditional authoritarian management to participative governance (McLagan and Nel, 1997).

Organizational change often takes place at several levels simultaneously. Improving automation, reengineering its systems architecture, and completely changing its strategic outlook can accomplish accelerating a firm’s position in the marketplace. As Figure 1.8 below shows, each category of change comes with its own level of risk. Figure 1.8 shows that the higher the risk, the higher may be the return.

What may give the nomenclatures being advocated in this book some significance is that they exist within the first risk segment of Figure 1.8. And what gives changes in organizational strategy such high levels of risk is not only the departure from the tried and true, but the increasing of the levels of resistance to change by opposing forces within and beyond the organization.

Source: Adaptation from Malhotra (2000) 'Risk and Return in the Old World of Business', Figure 2.

HIGH

MODERATE

LOW

Figure 1.8. Assessment of Risk at ThreeLevels of Organizational Change

LOW MODERATE HIGH

RISK

RETURN

OperationsAutomation

Reengineeringof workflow andprocesses-radical redesign

Reassessmentof major strategiesin management modelsand market segmentation

1

2

3

1. Change strategy

2. Change design

3. Change operations

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Strategic Preparedness: Management's New Digital Literacy

Strategists in the Cybercentric virtual enterprise, it is argued, must contend not only with assimilating the new concurrent development concepts of new product development (NPD), but also with shedding old Geocentric-based principles. No longer is new product development handled like an assembly line, where pieces of the product puzzle were dealt with separately in independent manufacturing facilities. Today's Cybercentric knowledge manager must think strategically in terms of systems and cross-functional teams.

Figure 1.9. Strategy

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Strategy Global

integrationNationalresponsiveness

Regionalintegration and nationalresponsiveness

Globalintegration and nationalresponsiveness

Virtualintegration via internetworkability and SES

Legend: Strategic Ecosystems (SES)

New Product Development (NPD): Utilizing Concurrent Systems StrategiesFigure 1.9. raises the stakes of the global-to-virtual strategic mix by taking the concepts of management systems integration into the virtual realm. New products are developing using simultaneous or concurrent development processes. Knowledge managers must conceive, plan, and execute the creation of new product development (NPD) strategy thinking in concurrent systems strategies. The objectivist strategic model common to Geocentric SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis (Hamel, Prahalad, Thomas, and O'Neal, 1998, p.306) may have evolved into a nonstandard assessment of unpredictable change or what this author calls the Strategic Ecosystem (SES) approach fostering new product development from a ‘full ecological impact’ perspective where all elements present in the product life cycle (PLC) of a product or service have influence and sway in its creation.

Business strategists approaching a virtually-extended enterprise concept, relative to knowledge management, are dealing with the concept of internetworkability; a heterogeneous computing environment connecting different hardware platforms, operating system environments and user interfaces in order to seamlessly communicate, collaborate, and evolve company systems, and innovate product development and sales strategies.

When Intel develops a new chip, for example, the design of the new product must have concurrent development (Gossieaux, 1999). Product, process, and supply chain must all develop concurrently. At the product stage, market requirements, functional specifications, product development and testing must evolve before the product is launched. At the process stage, systems architecture, implementation, and testing must proceed before implementation. Supply chain planning should include architecture, development, testing, and requirements of the system before the supply chain management plan is complete. Most NPD steps are highly collaborative

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in nature as well as distributed across the virtual enterprise. This process would dramatically benefit from customer and supplier involvement. Recent research by major accounting firms such as Ernst and Young, according to Gossieaux (1999), demonstrate that having customers and suppliers on virtual design teams can effectively cut time to market cycles:

"National markets, currency controls, and cumbersome communications processes made national (Ethnocentrism) or regional (Regiocentrism) selling organizations an appropriate structure 15 years ago. The globalization (Geocentric) of capital flows, communications networks, and the operations of corporate customers have rendered that model obsolete" (Slywotzky, 2000).

The strategic nature of digital literacy, 'the ability to access networked computer resources and use them' (Gilster, 1997, p. 31), is that it has mutability, with the ability of taking on any structural form of technology communication. Generations of management models have evolved to bring us to the era of e-commercialism. In the most recent past, the premise of company knowledge creation and growth, where continuous efforts to provide value to the marketplace over a prolonged period of time would ultimately result in achieving global status, was diluted. Currently, that same result can be created, using a virtual Cybercentric platform, in a fraction of the time. E-commercialism has destroyed that portion of the Geocentristic premise. The global market environment is in free-fall in that companies and their manufacturing segments, with the aid of Internet technologies, can transform themselves from local or regional to virtual, as it were, overnight. This accelerated change may reveal, in the not too distant future, requirements for a new Cybercentric platform upon which to base the management of an accelerated, virtual knowledge creation platform for the organization, stretching from the factory-floor upward.

“I call it a ‘Web incarnation’ because what we are doing is not creating a new business, but rather taking the 18 years we’ve been in business and leveraging our experience context via the power of the Web. We will provide the kinds of services we provide now, but taking the knowledge base, which is rather expensive when you sit one-on-one with a client/prospect and use the Web to create expert systems. If I had to say there was one basic fundamental philosophy of what we’re doing it is filling a gap” (Clarke, 2000).

Knowledge-Critical Systems Knowledge-critical areas of a Cybercentric model include strategic applications such as sales force automation and customer support. These front-office knowledge systems have made their way to back-office control and manufacturing areas of the organization. These transaction-oriented knowledge management systems are being used to support and help organize the back-office knowledge systems of financial management, manufacturing, and distribution, (Hill, 1999). Manufactures at the sales and distribution levels, increasingly, covet this type of knowledge systems integration because it enhances their ability to continuously improve customer service.

The software that the knowledge worker needs to interface between work and machine is critical. This is called the human-machine-interface (HMI) or man-machine interface (MMI) and is instrumental to his or her performance at the PC/machine interface level.

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The prevalent e-commercial marketing environment exerts downward pressure on knowledge managers and strategists in manufacturing considering a product's time to market, inherent benefits, quality, the outcome of knowledge creation on product ingenuity (invention, reinvention and R&D) in the face of competition, and even profit margins (Smith, 1996). Human machine interface and Supervisory Control And Data Acquisition (SCADA) software (Fraser, 1997) leverage the power and connectivity of today's knowledge worker in front-to-back office networking.

PC Technology: Cybercentric Knowledge Management Strategy

Cybercentrism’s PC-based technologies enable the replacement of Geocentric’s traditional, hierarchical approach to doing business with an open, horizontal, peer-to-peer solution. Utilizing a unique, deterministic control engine, open control software liberates a sales and service operation or a factory’s shop floor by seamlessly linking its critical production information directly into the enterprise management system. The technology is user-configurable, making it applicable to both manufacturing and IT management. This networking feature of the PC lends itself well to the enterprise that is reengineering its management structure from the traditional hierarchical configuration to horizontal management architecture, reflecting the peer-to-peer nature of this technology. A knowledge manager needs only a desktop PC to access the corporate intranet, extranet and Internet to obtain linkages to the corporate information environment and the corporate production system.

Barriers exist in the form of 14 different languages, a score of time zones, diverse business structures and dozens of currencies, all demanding access to the corporate virtual information and marketing management systems. Active server technology breaks down these barriers by initiating and managing active flows of data. The firm, in many cases, comes to be defined by its knowledge management tools.

Figure 1.10. shows the phrase manufacturing on demand, an industrial phenomenon emerging from virtual Internet interconnectivity. This new technology has produced what this book establishes as a new e-segmentation called Factory-to-Business (F2B), which has materialized in the marketplace due to Cybercentristic effects. Figure 1.10 shows F2B and manufacturing-on-demand as features of the technology factor under Cybercentrism.

Figure 1.10. Technology

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Technology Mass production Batch production Flexible

manufacturingFlexible manufacturing

Manufacturing on demand, F2B

Technology Management: A Knowledge ‘Systems’ Mentality There are critical new orientations for aspiring to Cybercentric management. They evolve around the premise of technology mastery as management leaves the era of global enterprise ideology and enters a new virtual storefront vision of the market. The new role of the customer or supplier as proactive user has thrown into question the viability of such weathered concepts as ‘Trickle

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Down or Waterfall’ product life-cycle models for product strategy deployment as well as aspects of the ‘Shower Approach’ (Keegan, 1989, pp. 30-31). Figure 1.11. shows the putative* level of impact (low, moderate, high) of PC technologies on strategic action in the areas of Management, Operations, Training, and Financial departments within the organization.

Figure 1.11 shows three levels of impact on strategic factors common to the application of PC-based systems in the enterprise. A prudent means of improving the financial bottom line, for the virtually-extending enterprise, may lie in the implementation of a PC-based control platform including simplification and standardization, while extending the useful life of existing capital equipment and available controls.

The selection of the technology and thus its procurement is often left to operations. The operations branch of the organization is mainly concerned with making the system work. This means making sure that the systems purchased comply with standards and protocol already installed in-house. While the main concern for operations is compatibility and functionality, management and finance have major concerns for cost.

Figure 1.11. The Impact of PC Technology on Strategy

Strategic Action Management Operations Training Financial

Support a trans-enterprise communications system plan (knowledge & information)

High High High High

Assess the costs of new technology adoption

High High Low High

Plan the timing of new technology implementation

High High High High

Automate data capture and distribution systems (HMI) (SCADA)

Moderate High Low Moderate

Utilize the processing capabilities of OS such as Microsoft Windows NT

Moderate High High Moderate

Adopt open systems architecture: methods & tools for managing technology migration risks

Moderate High High Moderate

Define standards and implement technology migration

Low High Low Low

Redeployment and retention of existing systems (retrofit) as competitive advantage and cost saving measures

Moderate High Moderate High

Source: PC-Based Controls, Frost & Sullivan Research, Syndicated Report #A001-10, (Gordon, 2001d)

Every sector of company operations is affected with a measured 'high' impact, at some juncture, of strategic development. Assumptions about markets have changed. Where the impact on management is high, in support of a company-wide PC-based system with open systems

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architecture as shown in Figure 1.11, the role of implementation is often left to operations. This may point to a flaw in strategic implementation where management does not have, and is not required to possess, current expertise in newly adopted technologies. What Figure 1.11 also shows is that the financial arm of the enterprise does not possess, and may not be required to possess, expertise at the define-and-implement levels of overall strategy.

The supply chain management (SCM) function of industry is also being reengineered by the technology migration of advanced information data systems.

Seeking cost reduction out of product purchase may be only part of a viable strategy, and the traditional lines of resistance are imposed between operations and financial management. A baseline of the possible risks concerning technology adoption would have to include the outcomes of any final agreement among management, finance and operations. Solutions would require the joint management of inter-organizational aspects of technology transfer and the empowerment of training to facilitate the assimilation of these new technologies with minimum trauma to workers.

The EPRG model was designed before these aspects of e-commerce existed. Creating a product has been transformed from mass production to batch and flexible manufacturing systems. Manufacturing-on-demand brings an entirely new element of instantaneous Cybercentric order response to the e-business and its factory floor.

Figure 1.11 points out possible areas of weakness in the strategic implementation of technology migration that feature, first and foremost, the degree of technological expertise or ignorance on the part of managerial decision-makers. Not to recognize, it is argued, the presence and new requirements of a Cybercentric model change in vital areas of operations and management may have detrimental consequences.

"The conservatives who follow the adoption cycle are looking to get by with the safest, cheapest technology they can find. Fundamentally, they are afraid of technology purchases - afraid they will choose the wrong thing, afraid they won't be able to make it work right, afraid they will break it or just make themselves look stupid trying to use it; so they will choose only a fully proven, absolutely bulletproof solution - and even then will worry about it" (Kiamy, 1993, p.23).

A Technology Evolution to Cybercentrism Figure 1.12 shows the evolution of industrial control technologies linked to management models within EPRG, with the recent addition of the Cybercentric link. The figure shows a progression of industrial controls technologies with the far right column showing possible management models. The key feature here is where we see the gradual change from Ethnocentric to Regiocentric in the 1970s and Regiocentric to Geocentric leading into the 1990s. Cybercentric management orientation, first recognizably occurring in 1997, is seen as being concurrent with Geocentrism in the new millennium.

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Figure 1.12 shows that Regiocentric effects are mainly tied to hardware-based technology solutions. This changed dramatically in the 1980s with the introduction of proprietary software products tied to computers and the PC, whose solutions could be more easily shared among corporate subsidiaries. Figure 1.12 also shows the Regiocentric model reflecting hardware-focused solutions in the 1970s and 1980s, the Geocentric model supporting proprietary software islands of automation in the 1980s and 1990s, and the Cybercentric model emerging from approximately 1997 into the 2000s, supporting an era of off-the-shelf software solutions.

The proprietary nature of these solutions, however, kept software solutions confined within the special interests of in-house legacy systems that shared suppliers and clients. It was not until 1997 when the market changed significantly again, with the introduction of inexpensive, off-the-shelf software solutions beyond the reach of proprietary domination, that Cybercentric influences began to impact the market.

Figure 1.12. The Emergence of a Cybercentric Management Model Linked to Industrial Controls Technologies ,1950-2000

Year Technology DominantManagementModels

1950s Standard 1" punched paper tape – NCs, hard wired electrical circuits, relays/contacts

EthnocentricPolycentric

1960s Microprocessors in early CNCs – ending NC technology dominance.

EthnocentricPolycentric

1970s Microprocessors, proprietary hardware and electrical circuit programs

EthnocentricPolycentric Regiocentric

1980s First controls designed with specialized hardware and software - there is no standardized products or off the-shelf computers for machine control

RegiocentricGeocentric

1990s PLCs and CNCs begin to lose market share to "soft" controls technology and 'open systems' emerge.

RegiocentricGeocentric

2000s 'the network is the computer' – networkcentric and server-based platforms - PCs are in the server room

Geocentric Cybercentric

Source: World PC-Based Controls Markets, Frost & Sullivan Research (Gordon, 1999b)Legend: Regiocentric: Hardware-focused solutions

Geocentric: Proprietary Software with Islands of Automation Cybercentric: Open Systems: Off-the-shelf software solutions

While Ethnocentric and Polycentric designs existed in diminished presence throughout the time period covered in Figure 1.12, in both developed and underdeveloped markets, industrially-linked technology change in highly developed markets in the US, Europe, Australia and Asia, impacted the evolutions of these systems into modern times. Figure 1.12 suggests the dominance of overall management models beginning in 1950s through to the early 2000s.

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What has taken place is that, as the Internet-based supply chain emerged, the ability of manufacturing technology to break from its isolation has linked technologies to business design as never before:

"Technology can make you lose, but it can't make you a winner. To create and capture persistent value, technologies and products must be linked to successful business designs" (Slywotzky, 2000, p. 271).

It is vital that new management model development begin at the core of the company structure envisioned as the factory floor. This reasoning is based on the fact that the ‘open’ factory with its systems software linkages to management actually ‘talks’ to decision-makers in the Cybercentric model. Therefore our analysis includes terminology such as CNC and PLC, which are new terminology that must be recognized as basic terminology within the new, cyber-business stratagem.

Confronting Dysfunctional Front-Office Isolationism PC technology adoption and operating systems (OS) implementation into the manufacturing sector has faced some dysfunctional barriers. The fragmentation of communications capabilities from front-office to the factory floor may be a strategic handicap instituted by single-minded management:

"In the 'old world' ways of doing business, products were vertically integrated and managed in a fairly autonomous fashion. This created two undesirable outcomes. First, it contributed to the development of a 'silo' mentality that created barriers to sharing resources across businesses. This was particularly dysfunctional in an industry where technology benefits in one area have to be passed quickly into other areas and common manufacturing platforms and uniform design represent enormous sources of competitive advantage" (Hax and Wilde, 2001, p. 107).

Ironically it is the ‘communications silo’ concept that personifies the new structural management requirements for Cybercentric corporate management. There are many examples of the prevailing disconnect between potential information technology investments and organizational performance. Two of these can be identified in the manufacturing space as the PC-based control technologies seen as taking over the PLC (Programmable Logic Controllers) market in the late 1990s, as well as operating systems (OS). A view of the historical migration of manufacturing technologies, relative to Cybercentrism, brings significance to the evolution of the PC into the manufacturing environment. Two main technologies, the PC and operating systems (OS), have a major impact on the understanding of the nature of technology migration into the e-commerce environment.

The speed with which companies can adapt to meet the challenges of technology-assisted knowledge management may determine success or failure within the new Cybercentric model. Distinct among these technologies is PC-based control products and a large collection of operating systems (OS) and the continuing battle regarding Microsoft’s Windows dominance over other system platforms. The startling speed with which this e-commerce transformation into manufacturing has occurred may make familiar technologies obsolete for the commercial and industrial knowledge worker. Change in technology will bring with it a market crowded with new software, and littered with users confused by technological alternatives, and confounded by large price and feature differences in available solutions.

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The PC and the all-prevalent Windows NT operating system spearhead the emerging e-manufacturing technological transformation. This has been driven by two equally formidable forces. First in appearance was the Pentium Pro in 1995, followed by the Pentium Pro II in 1997, and Pentium III, IV and so on. The performance of these off-the-shelf office and industrial hardened PCs has placed them on par with the Unix-like operating systems (OS) as they evolve further. This offering of a broad area of technology, intended to deliver continuous business solutions, should facilitate Enterprise Resource Planning (ERP) (Lewis, 1999) to include server consolidation, data mining, mission-critical applications, and infrastructure and performance management.

Understanding A Critical Moment in a Company’s Virtual Growth: Ethernet and TCP/IP Don’t decide that you can have a marketing management career and not know what TCP/IP means. The future of business communications and knowledge worker networks may be extensions from information highways that have their origins at the e-business and e-manufacturing levels. Internet commerce has grown explosively in the past several years, but it is in danger of lacking a reliable building foundation at a critical moment in its growth from manufacturing to e-manufacturing. The first option of the Internet commerce platform will be the Ethernet and TCP/IP running over either 10 meg or 100 meg, with hundred-gig connections in the office environment. Recent advancements in Ethernet and the emerging Fast Ethernet technology will enable systems to handle mission-critical knowledge control responsibilities currently being managed by existing industrial automation networks (Johnson, 1997).

Knowledge managers should be aware that in the near future the Ethernet might also be a conduit that unites the front office with the factory floor. Trans-enterprise knowledge creation and innovation may, in part, utilize this most basic of LANs (Local Area Networks). To the technology-assisted knowledge manager, the Ethernet network(s) will not be just one system, but many. This will be part of a newly interconnected global corporation. The knowledge manager will have a sweeping view of operations from the vantage point of a powerful gatekeeping PC. The Internet will be the embodiment of the virtual corporation. The concept of trans-enterprise innovation emerges from a Cybercentric vision that ensures that total knowledge integration is only a click away.

Model Evolution Definitions: Past, Present and Future

The growth of a company was seen as having an evolution in management strategy that took it from a regional or Regiocentric stage to a global stage over a twelve- year period. Figure 1.13. provides definitions of each management orientation in the EPRG schema plus Cybercentrism. Companies have been forced, in recent times, to reengineer themselves to meet the priorities of virtual customer segments, regardless of geography. Life cycles are accelerating, with lost control of prototype skimming strategies (Toyne and Walters, 1993), impacting the competitive nature and structure of foreign markets. Expansion strategies among firms include assessments of company resources and market segments served and perspectives on goals in the global arena. Each company, depending upon its development, has been seen, in the past, as having a defined growth pattern.

Rather than being distinct in nature from EPRG origins, the Cybercentrism model complements several of Perlmutter's (1969) initial concepts. Perlmutter did not equate superiority with nationality, and espoused the concept of subsidiaries as satellites and not independent states. And, although his original writings identified only what he called 'EPG profiles' (ethnocentric,

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polycentric and geocentric) of management (Bartlett and Ghoshal, 2000, p.82), his ideas for a truly worldwide product line and lofty management ideals, identifying trust as the single greatest obstacle, remain topical. Figure 1.13 shows the definitions of each element of the EPRGC schema with the inclusion of Cybercentrism as the fifth ‘centrism’.

Figure 1.13. EPRGC Defined

Ethnocentrism is associated with a home country management orientation where overseas operations are secondary. Structure is complex in home country but simple in other countries. The values and interests of the parent company guide strategic decisions. Firm is concerned with its legitimacy in its domestic country (Perlmutter, 1969; Perlmutter & Chakravarthy, 1985). Model applied to subsidiaries is that of the parent company.

Polycentrism connotes a host country focus where subsidiaries are established in overseas markets. These are varied and independent. A polycentric multinational is mainly concerned with legitimacy in each host country. Characterized by fragmentation of strategies between the parent company and its subsidiaries (Perlmutter, 1969; Perlmutter and Chakravarthy, 1985).

Regiocentrism relates to an integrated regional management approach…increasingly complex and regionally interdependent. The firm tries to link strategies and interests between and among subsidiaries. A Regiocentric multinational tries to balance the viability and the legitimacy of the multinationals (Perlmutter, 1969; Perlmutter and Chakravarthy, 1985).

Geocentrism is linked with an integrated world structure of continued physical growth and tied to centralized/decentralized management strategies. Highly complex and worldwide interdependent. Firm utilizes a Geocentric or global marketing infrastructure and likely to have enhanced global new product development capabilities (Heenan and Perlmutter, 1979). These geo-mechanisms enable multinational corporations (MNCs) to transfer knowledge across borders at the organization level, with a primary focus on broad strategic decision-making premises and the structuring of headquarter-subsidiary relationships (Subraminiam and Venkatraman, 1998).

Cybercentrism encompasses the management of the highly interactive digital economic universe, capturing a ‘real time’ vision of market realities without physical size limitations to corporate operations or growth. The Cybercentristic enterprise may be wholly virtual or a traditionally structured virtually-extended enterprise engaged in the B2C (Business-to-Consumer) features of Internet e-commerce, the B2B (Business-to-Business) elements of cyber-alliances including e-procurement in supply chain management, and the F2B (Factory-to-Business) aspects of e-Manufacturing including virtual product design, remote diagnostics/maintenance, and manufacture-on-demand. Cybercentrism espouses a trust in the knowledging process with information sharing and virtual teamsmanship.

Sources: Perlmutter, 1969; Heenan and Perlmutter 1979; Perlmutter and Chakravarthy, 1985; Subraminiam and Venkatraman, 1998; which has been modified by Gordon, 2001a, 2001b, 2001c

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Note: This material is structured to support the definition of Cybercentrism as listed here. This definition should not limit the further development of alternative interpretations of this model in expanded areas of research.

Management attitudes of national and international companies responsible for establishing potential competitive advantages relative to the EPRG schema have been the subject of some research (Wind, Douglas, and Pearlmutter, 1973; Toyne and Walters, 1993). Howard Perlmutter (1969) of the Wharton School first identified the distinctive management orientations of international companies. Figure 1-7 shows these four structures plus a fifth with Cybercentrism, suggesting a re-examination of traditional knowledge cycles and strategic premises such as international product life cycles (IPLC) (Giddy, 1978).

Decentralization of Management Culture: PeopleSoft and Hewlett Packard

The new virtual connectivity potential provided by Internet technology changes the cultural working environment in several important ways with customers, suppliers, partners and employees. Technical innovation, creativity and the knowledging process are central to the Cybercentric model. Figure 1.14. makes note of the virtual nature of the Cybercentric culture. Ethan Watters (2004) suggests that choices in today’s generation exhibit a nation-wide, perhaps global, phenomenon of extended ‘tribal’ affiliation beyond the nuclear/ethnic family which may be accelerated by on-line chat rooms and the increased availability of virtual social connectivity.

The Cybercentric Virtual Culture

Figure 1.14. Culture

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Culture Home country Host country Regional Global Virtual

Software companies such as PeopleSoft (Duffield, 2002) provide the ability for employees and organizations around the world to virtually extend their enterprise to real-time operations. PeopleSoft claims to be one of the few companies to provide a suite of application software with a pure Internet architecture offering benefits that reflect the Cybercentric paradigm shift away from Geocentric ideologies:

Customers enter their own orders, check inventory, track shipments, pay invoices, and enter support inquiries 24/7 (24 hours a day, seven days a week).

Suppliers monitor customer demand, check inventory, replenish supplies, monitor their performance, and check settlement status from anywhere in the world.

Partners get instant information on products and promotions, place orders, check

availability, view shipment status, and request support online - all in real time.

Employees manage their own benefits, administer their own deductions, purchase their own supplies, book their own travel, and submit their expenses.

These values have diverse structural characteristics and present abstractions originating from the nature of software solutions as well as the Cybercentric organization's virtuality, or placelessness.

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The success of PeopleSoft in such diverse areas as Customer Relationship Management, Supply Chain Management, Financial Management, Human Capital Management and Application Infrastructure suggests that every organization may eventually have to operate in real-time to drive competitive advantage. Dave Duffield (2002), Chairman of the Board of PeopleSoft, adds visionary provisos for his Internet architecture company that go against the grain of hierarchically structured global firms. These include core values focusing on people, customers, innovation, quality, and profitability.

Changing the Concepts of Management Evolution

With no technological change, industry and commerce might stay at a steady-state value. But more and better ways of manufacturing products and administering services is ongoing and part of technological history. The invention of new and better ways of making things is constantly pushing the production forward (DeLong, 2000). What is important about this feature of technological change regarding long-term growth is the velocity of push.

Heavy, discrete industrial sectors, unlike the facile process manufacturing commercial sectors are, often, the last to change. DeLong (2000), offers an interpretation of technological change that depends upon a constant. The dependable shifting outward of technologies pushes out the production function. DeLong surmises that the economy steady-state is pushed to higher levels of output-per-worker and capital-per-worker by technological change. However, the production function impacted by what I term e-skip-gen technologies, or electronically accelerated skip-generation technologies, affects economic growth in ways that emulate the velocity of push(Delong, 2000).

Figure 1.15.

The Evolution of Company Incremental Growth Strategies

Stage One

Domestic

(Ethnocentric)

Years 1-3

Stage Two

International

(Polycentric)

Years 4-6

Stage

Multinational

(Regiocentric)

Years 7-9

Stage Four

Global

(Geocentric)

Years 10-12

Stage Five

Universal

(Cybercentric)

One Year

70%Ethnocentric 30%Polycentric

80%Polycentric20%Ethnocentric

60%Polycentric40%Geocentric

60%Geocentric40%Polycentric

Up to 100% Cybercentric

__________________________________________________________________________ Source: Adaptation from 'International Business Strategy: Three Alternatives', Keegan 1989, Table 10-1, p. 302.

Figure 1.15. suggests that a new market entrant, using advanced information technology (AIT) might, in as little as one year, accomplish the same thing as an established corporation in terms of visibility and value. A Cybercentric company could establish a competitive virtual platform trade presence nearly comparable to that of a market-leading, Geocentric-based company with the use of existing virtual networks, logistics outsourcing and the hiring of contract knowledge workers, emerge in full form in the defiance of every text book rule of growth and development.

Stage Five in Figure 1.15. suggests that incremental company growth strategies is an obsolete concept. Velocity, when ascribed to virtual technology migration and development of the PC accelerates the 'normal product development cycle' (Slywotzky, 2000, p.187), and can transform a

29

company from ground-based to virtually-extended operations in as little as a year's time through the implementation of a Web presence and Internet-based platforms.

The argument for the presence of a Cybercentric model in Figure 1.15 suggests that the ability of a new market entrant to establish a competitive market presence without experiencing the arduous progression and complexity of Geocentric growth is a reality. Companies in the process of virtual extension, or new market entrants, might, as an example, develop 100 percent virtual trade capacity in as little as one year through the installation of a corporate website containing an interactive product catalogue with purchase and fulfillment capability. This places the virtual contender's products in direct competition with traditional market leaders. The integration of a corporation’s production of goods and services has strong impact on the value chain where location is a debatable competitive issue.

The Internet and its information and marketing communication technologies, coupled with the vast outsourcing capabilities of B2B connectivity, may have changed forever the vision of competition in the marketplace. In doing so it may have made irrelevant the placement of a corporation’s global locations as well as brick-and-mortar growth patterns necessary for a firm to compete. Competitors taking more than a decade to achieve a strong market presence via bricks-and-mortar in the past must now defend their market share utilizing new technologies.

In an e-commerce scenario common to the virtually-extended enterprise, there is ‘company-of-origin rather than a country-of-origin. Brand equity exists equally in each major market. Products appearing on the Web, or within a B2B manufacturer/supplier intranet, are not limited by spatial barriers from being built and offered anywhere in the developed or underdeveloped world, as long as users can log-on and pay for the merchandise. In this sense Internet-driven Cybercentrism is dispelling the argument that markets do not develop simultaneously and exist with parity.

A virtual enterprise's identity finds symbolic identity in its marketing accessibility by consumers, its links to suppliers, retailers, university laboratories, and public contractors. Its image is locked in its virtual accessibility and its communications systems (Mulgan, 1997).

Figure 1.16. is a summation of Cybercentric nomenclatures that point to Cybercentrism as a fifth evolution to the EPRG model (Chakravarthy and Perlmutter, 1985). These nomenclatures employed in modeling can be seen as preliminary steps toward new platform concepts. The Ethnocentric, Polycentric, Regiocentric, Geocentric journey to flexible e-commerce scenarios have emerged toward a preferred or advisable pathway to competitive advantage beyond ideological global market reatraints.

Figure 1.16. illustrates the spread of the nine original business strategy factors left to right. What Perlmutter called a ‘Tortuous Evolution' (Perlmutter, 1969, p.12) of multinational corporations may, with the Cybercentric model, be reveal themselves as somewhat less tortuous with the addition of a new platform of Cybercentric strategic managerial options.

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Figure 1.16. Cybercentrism: A Fifth Evolution EPRG Nomenclature

Factor Ethnocentric Polycentric Regiocentric Geocentric Cybercentric Mission Profitability

(viability) Public acceptance (legitimacy)

Both profitability & public acceptance

Same as regiocentric

Collaborativeknowledge and innovation.

Governance Top-down Bottom-up (each subsidiarydecides on local objectives)

Mutually negotiatedbetween region and it subsidiaries

Globalintegration and nationalresponsiveness

Virtual team forms of knowledge integration and control

Strategy Globalintegration

Nationalresponsiveness

Regionalintegration and nationalresponsiveness

Globalintegration and nationalresponsiveness

Virtual integration viainternetworkability and SES

Structure Hierarchicalproductdivisions

Hierarchicalarea divisions, with autonomous national units

Product and regionalorganization tied through a matrix

A network of organizations(including some stakeholders and competitor organizations)

May be wholly virtual or a traditionallystructured virtually-extended enterprise, SBN

Culture/ Consumerism

Home country EthnoGens

Host country PolyGens

Regional RegioGens

Global GeoGens

Virtual CyberGens

Technology Massproduction

Batch production Flexible manufacturing

Flexible manufacturing

Manufacturing on demand, F2B

Marketing Productdevelopment determined primarily by the needs of home-countrycustomers

Local product development based on local needs

Standardizewithin region, but not across regions

Global product, with local variations

Engaged in the B2C features of Internet e-commerce, the B2B elements of cyber-alliances and the F2B aspects of e-manufacturing

Finance Repatriation of profits to home country

Retention of profits in host country

Redistributionwithin region

Redistributionglobally

Highly interactive digital economic universe, CAEE

Personnelpractices

People of home countrydeveloped for key positions everywhere in the world

People of local nationalitydeveloped for key positions in their own country

Regional people developed for key positions anywhere in the region

Best people everywhere in the world developed for key positions everywhere in the world

A ‘real time’ vision of market realities without physical size limitations to corporateoperations or personnel growth

Source: From an expanded concept from a United Nations publication template (Carter, 1997), with a view of the basic tenets of the Perlmutter (1969) EPRG architectural concept of global business Adapted from Balaji S. Chakravarthy and Howard Perlmutter, "Strategic Planning for a Global Business", Columbia Journal of World Business, Summer 1985, pp. 5-6. Legend: SBN: Strategic Business Node; F2B: Factory-to-Business; SES: Strategic Ecosystem,; CAEE: Cybercentric Actionable Economic Elements

Figure 1.16. incorporates the full range of Cybercentric factors revealing Internet-based competitive intelligence systems and highly interactive software as key competitive and knowledge management factors in a new digital economy. Figure 1.16. shows the completed figure referenced at the beginning of the chapter showing the replacement of the question marks as they first appeared in Figure 1.1. The modeling in this book is aimed to extend the Perlmutter EPRG schema in ways that attempt to make sense of emergent phenomena of a globalized business environment of the late 20th

century and the emergent virtual realities of the 21st century. Transfer of knowledge is frequently

31

accomplished by human capital (Teece, 2002) and the purchase of new technology. The tangible inputs of technology transfer will ultimately necessitate the use of comprehensively descriptive nomenclature forming a benchmark of necessity for new strategically useful terminology.

Summary

This has been a discussion of theory with arguments advocating the acceptance of Cybercentrism as the fifth ‘centrism’ in the EPRG schema. Distinctive orientations of management of international companies during the Global-Village era (Yip, 1989; Baker, 1990) were outlined, as we have discussed, in the well-known EPRG blueprint identifying four types of management perspectives toward going global. Again they are identified as ethnocentrism, polycentrism, regiocentrism and geocentrism or EPRG (Perlmutter, 1969; Heenan and Perlmutter, 1979; Perlmutter and Chakravarthy, 1985: Chakravarthy and Perlmutter, 1985). In 1965 Perlmutter devised the EPG segments of the EPRG model and published his findings in the ColumbiaJournal of World Business (Perlmutter, 1969) while Heenan and Perlmutter (1979) together devised the Regiocentric model for the EPRG segment.

Essential to understanding the difference between Geocentric and Cybercentric model concepts can be reduced to two basic factors: one is geography and the other is time. The commonly held management concepts of globalists would be that these marketers could focus on target audiences in separate and isolated locations or major international markets (Sandhusen-Barrons, 1993). In their minds there still remains the essentials of product life cycles over distance and time. Products can be launched as ‘new’ in several markets progressively over time according to the adoption of technologies, the assimilation of needs and product awareness. Cyberists, however, realize that in the new world of the Web, prolonged product life cycle (PLC) planning over time is reduced to zero. In the Cybersphere, all major markets are aware of the product instantly as it is launched in all major on-line markets simultaneously. The concept of sequential market geography is that there is none…ground-based marketing ideologies are fatal. The concept of time is reduced to now/24/7. The whole idea of market segmentation must be adjusted to consider instant availability, blurringly fast product life cycles and learning curves in high-tech categories partnered with the intricacies of manufacturing-on-demand.

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Glossary

ABMS: activity-based management system

CAEE: Cybercentric Actionable Economic Elements

Cybercentric / Cybercentrism: See Figure 1-7, p. 32

EAI: enterprise application integration

e-manufacturing: E-Manufacturing is the evolutionary state of manufacturing impacted by technologies common to Internet e-commerce, the B2B (Business-to-Business) elements of cyber-alliances including e-procurement in supply chain management, and the F2B (Factory-to-Business) aspects of network-enhanced production including virtual product design, remote diagnostics/maintenance, and manufacture-on-demand. To achieve connectivity of the factory floor to the rest of the enterprise via a trans-enterprise communications network is the basic tenant for e-Manufacturing technology migration.

EPRG: Ethnocentrism, Polycentrism, Regiocentrism, Geocentrism. These four nomenclatures are distinctive orientations of management of international companies during the Global-Village era and are outlined in the well-known EPRG blueprint identifying four types of management perspectives toward going global. In 1965 Perlmutter devised the first three segments of the EPRG model and published his findings in the Columbia Journal of World Business (Perlmutter, 1969) while Heenan and Perlmutter (1979) together devised the fourth IPRG segment. Perlmutter and Chakravarthy published further variations in 1985.

ERP: Enterprise Resource Planning (ERP). ERP provides the essential front office planning, scheduling and authorization backbone for the vertical process to function.

ftp: File transfer programming

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GUI: Graphical User Interface

HMI: Human-Machine Interface software usually programmed with user-friendly icon features that make the control process easier to learn and utilize. HMI/SCADA (Human-Machine Interface/ Supervisory Control and Data Acquisition).

IT: Information technology

LAN: Local Area Network

MIS: Management of Information Systems

MES: Manufacturing Execution Systems (MES). This is a resources oriented software that utilizes available inventory, labor, and equipment necessary to fulfill orders and get the job done on the factory floor.

NBER: National Bureau of Economic Research

OS: Operating system

PC/NT-based Control: Personal Computer with Windows NT software in a Local Area Network.

PLC: Programmable Logic Controller

SBN: Strategic Business Node, a new nomenclature for this book, is a Cybercentric progenitor of the Geocentric Strategic Business Unit. The SBN is seen to be the replacement business structure for e-business. Vertical SBNs, operated by a management elite, would dictate managerial, financial, strategic IT edict from wired hyperspace bunkers.

SBU: Strategic Business Unit

SBN: The strategic business node (SBN) is an evolution of the Geocentric strategic business unit (SBU) evolving from the presence of Cybercentric spatial networks of Web communication and the patterning of economic functions and information flows. As the global economy expands into a universal economy it incorporates new bricks-and-clicks markets demanding advanced services and the units (nodes) required to join the Internet and corporate intranet network systems and command their evolving linkages.

SCADA: Supervisory Control and Data Acquisition

SCM: Supply Chain Management (SCM). This includes Supply Chain Planning (SCP) and Supply Chain Execution (SCE) which uses software based on a constraint-anchored optimization algorithm premise

SMP: symmetric multi-processing

TCP/IP: Transport Control Protocol/ Internet Protocol, the basis for communications on the Internet

VLANS: Virtual Local Area Networks _____________________________________________

Semantic Origins of the Cyber Prefix for Cybercentrism: Cybernetics and Artificial Intelligence

The Cyber in Cybercentrism can be identified as having a close association with Cybernetics. Artificial Intelligence and cybernetics are often associated one with the other. "Artificial Intelligence (AI) uses computer technology to strive toward the goal of machine intelligence and considers implementation as the most important result; cybernetics uses epistemology (the limits to how we know what we know) to

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understand the constraints of any medium (technological, biological, or social) and considers powerful descriptions as the most important result.

The field of AI came into being when the concept of universal computation [Minsky 1967], the cultural view of the brain as a computer, and the availability of digital computing machines were combined. The field of cybernetics came into being when concepts of information, feedback, and control [Wiener 1948] were generalized from specific applications (e.g. in engineering) to systems in general, including systems of living organisms, abstract intelligent processes and language" (Pangaro, 2001).

Systems Science: Cyberspace

Systems Theory is the trans-disciplinary idea of the abstract organization of phenomena, independent of their substance, type, or spatial or temporal scale of existence. Where Cybercentrism has its focus in the Internet-driven realm of cyberspace, the spatial abstraction applies. "Real systems are open to, and interact with, their environments, and that they can acquire qualitatively new properties through emergence, resulting in continual evolution. Rather than reducing an entity (e.g. the human body) to the properties of its parts or elements (e.g. organs or cells), systems theory focuses on the arrangement of and relations between the parts, which connect them into a whole.

This particular organization determines a system, which is independent of the concrete substance of the elements (e.g. particles, cells, transistors, people, etc). Thus, the same concepts and principles of organization underlie the different disciplines (physics, biology, technology, sociology, etc.), providing a basis for their unification" (Heylighen and Joslyn, 1992).

Cyborgs, Cyberspace, and Cybermarketing

"Computer theorists use the term cyberspace to refer to the notional social arena we enter when using computers to communicate. Cyberspace can be used more generally to refer to the potential lifeway or general type of culture being created via Advanced Information Technology (AIT)", the congeries of artifacts, practices, and relationships coming together around computing" (Hakken, 1999, p. 1).

Ethnographer Hakken, in his book Cyborgs @ Cyberspace (1999), sees the cyber prefix, and the word cyberspace, as representing a culture. "The new computer-based ways of processing information seem to come with a new social formation, or, in traditional anthropological parlance, cyberspace is a distinct type of culture" (Hakken, 1999, p.2). In this application, management culture can also utilize this prefix, attaching it to the centric suffix utilized by the Perlmutter (1969) EPRG models.

Keeler, in his book Cyber Marketing (1995), defines the cyber prefix in its application to marketing, and more, as a meeting point for the world of computers and communications. Most of us would define marketing as whatever you do to promote the growth of your business. It can include market research, publicity, advertising, sales, merchandizing and distribution, and customer service and support.

The dictionary definition of cyber is the science of the control of complex systems, but in popular usage it has come to have a different meaning. Cyber has to do with the non-physical place, where computers and communications meet" (Keeler, 1995, p. xxi).

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Reaching The Strategic Tipping Point A man walks outside

on a rainy day with no umbrella, no hat and

not even a newspaper to protect his head from the downpour.

Yet, his hair does not get wet. Why?

In strategic thinking, problems are often

solved based on past knowledge…by

drilling deeper into the same model premise.

Unfortunately you may dig so deep that your only solution is that our man must have a hole in his head. You have

reached a strategic tipping point where

logic fails. That’s the value of a new model

mindset. You think laterally not vertically.

You subscribe to the HP credo 'management by walking around' (Packard, 1996), where managers and supervisors maintain a touchy-feely contact on a routine basis with faithful workers. Unfortunately you now hire outsourced employees placed in remote world locations who communicate with the company by email, phone, intranet and webcam. You struggle to stay in contact with these valuable knowledge workers by flying your managers to far-flung global locations exhausting your team and your budget. Even after initiating a ‘management by shuttling around’ policy employees are not loyal to the company mission and lack control. Thinking laterally you now grasp the trends of the decentralization of management and virtual corporate placelessness that has contributed to new technical and organizational infrastructures of both old and emerging firms in the new millennium. Switching from a Geocentric to a Cybercentric model mindset you quickly realize that management by objective (MBO) is rapidly being replaced by management by control (MBC). You realize the man has no hair.