Environmental Turbulence for Host Organizations Created by Globalization

An important facet of conflict management is response to turbulence. An example is the turbulence generated in the environment of a national company because of competition from global companies. Gill, McCalman and Pitt (1996) discussed how British Telecom faced disturbances when the advent of global cable television networks in Great Britain threatened its telecommunications hegemony. Another example they gave is the competition faced by the shipbuilding industry of Clydeside, Scotland. Until the mid-1990s the industry had an international market, but then it began to lose customers to international shipbuilding companies in Korea and Japan. New production technologies developed by those companies helped them become leading providers of ships at the global level.

Global managers interviewed for this book advise national companies facing global competition to revitalize themselves to meet the challenge of international competition. British Telecom is believed to have risen successfully to the challenge of turbulence in its external environment by discarding its earlier management philosophy of being an innovation-spurning, risk-averse public company. It became a moderately risk-taking private enterprise. It improved its working after effectively adjusting to external competition. Turbulence in the external environment, generated by the advent of global companies, can thus exert a beneficial effect.