Book report

p 7 Book Report

The World is flat : A Brief History of the 21st Century Updated and Expanded Edition

Thomas L . Friedman Abstract

This book report takes a look at writing piece by Pulitzer Prize winner Thomas L . Friedman , `The world is flat . The writer is outlining the impact of globalization on the world with specific review on US and emerging economies . By using the world `flat ' the writer means that the world has become a `flat playing field ' for businesses . He also high lights 10 flatteners that are

responsible for this change , namely Microsoft Windows , Netscape Navigator , Workflow software , Open sourcing Outsourcing , Off-shoring , In-sourcing , In-forming and `the steroids . It then goes on to discuss best practices by large companies like Wal-Mart and author 's experience while he traveled from India to China and back US . It also includes opinions and quotes of managers of global corporations such as Microsoft , Dell etc . The book concludes with impact of September 11 on global economies .Table of Contents How the world became Flat : 4

Ten Forces That Flattened the World : 4

America and the Flat World : 5

Developing Countries and the Flat World : 6

Companies and the Flat World 6

Geopolitics and the Flat World 7

Conclusion 8

How the world became Flat

`The world is flat ' is written by Thomas Friedman . The book is a retrospective study and prospective point of view of world as a result of vast technological changes . The book explores the subject of globalization , its effect on businesses in west and emerging economies The writer is Pulitzer Prize winner , New York Times `Foreign Affairs columnist . He is also writer of prize winning `The Lexus and Oliver Tree , `Longitudes and Attitudes ' and `From Beirut to Jerusalem . His book `The Lexus and Oliver Tree ' covers the aspect of globalization that affects the world 's economy not unlike `The world is flat (thomaslfriedman .com , 2005

In `The world is flat ' Friedman explores the world today and discusses the factors that can be credited for this altered way of life . He also talks about emerging economies like India and China , the competitive advantage they enjoy and their increased capability in this flatter world to compete with business and markets in west on the same level While discussing that he also sheds light on geographical , cultural and social boundaries being eliminated , trade barriers being lifted and he relates each change with examples of corporate America or upcoming companies in India and China . He concludes the book with threats that the world faces today and discusses 9 /11 in rather metaphoric manner

It can also be deduced from the book that Friedman is actually using metaphor of a flat word to describe the next stage of globalization . His view arises from the concept that barriers of entry in new businesses and markets are much lesser now individuals as well as companies can choose to compete or cooperate globally . Friedman quotes an interview with Bill where he explained the meaning of this transformation best . He tells that thirty years ago if you were to choose between being born a genius in India or China or an average person in Poughkeepsie , one will most probably have chosen to be an average person in Poughkeepsie because it still guarantees one to lead a prosperous life . Now Gates said , I would rather be a genius born in China rather than an average guy born in Poughkeepsie (Friedman , 2005

Ten Forces That Flattened the World

Friedman acknowledges that technology has flattened the playing field for businesses and economy today . In first part of book he distinguishes ten technologies that have dynamically shifted the world from being round to flat . Those flatteners are

1 . 11 /9 /89 , this was the date of introduction of Microsoft Windows . The writer recognizes importance of this operating software as a mean of eliminating language and cultural barrier , digitizing information and bringing world on a singular platform

2 . 8 /9 /95 when Internet was introduced to public and Netscape Navigator went public . It has enabled people to connect and communicate with each other

3 . Workflow software is facilitators for coordinating tasks . They enabled users to connect and exchange information regardless of their physical or geographical location . Workflow platforms make it possible for users using differing systems and software to connect and exchange information

4 . Open sourcing is referred to collaborating communities that developed Mozella Fire Fox , Linux etc

5 . Out-sourcing started with solving the Y2K problem when solution was outsourced to India . Normally businesses outsource activities that do not add considerable value but are time consuming and cost cutting

6 . Off-shoring is moving manufacturing procedures to low-wage countries like China

7 . Supply Chaining discusses best practices by Wal-Mart

8 . In-sourcing was explained with example of USB that not only picks up to-be fixed Toshiba laptops but also fixes them up

9 . In-forming is usage of tools such as Google and other internet search engines

10 . `The three Steroids ' which are high speed connectivity enablers

Microsoft 's chief technology officer Craig Mundie told Friedman in an interview that this platform with its unique capabilities is extremely crucial for a sustainable advantage and this has caused the `flattening . Friedman here relates example of Y2K problem when most American company outsourced the problem to Indian graduates for coming up with less expensive solution . These flatteners made easy transmission of information and worldwide collaboration

`The steroids ' is a term that Friedman has coined for facilitator of the flatteners . `The Steroids ' enabled high speed communications and connectivity . Broadly , the 3 steroids are

1 . Fiber-optics networks

2 . High-speed connectivity

3 . Large information infrastructures

These facilitators made information exchange more dynamic and virtual

Substantive part of this book is based on discussion about these technological forces how they affect the businesses and how have business adapted them . Friedman insists throughout the book that it 's the technological forces that have enabled this drastic turnaround in the businesses models of the world and it is mainly due to increased connectivity . Large companies like Global Crossing used there funds of million of rupees to connect the world from India to China to advanced and developed countries . This connectivity means reduced cost of phone calls , internet connections and data transmission

Friedman also talks about the converging factors of the flat world . He had mentioned three basic converging factors in this writing piece

1 . Combined effect of the 10 flatteners on the global economy

2 . Technology and its effect on productivity

3 . Opening up of closed economies like China and Russia to the global trade and economic environment

America and the Flat World

The writer also adds the world couldn 't have become flat only as a result of innovation and implementation of technology . As technology evolved and collaborated , it created a more unified platform and the world responded . Businesses become more horizontal as compared to their previous vertical structure . This flow of information has become global . People from all over the world , China , India and Russia can develop their talent , work on new technologies , markets and come up with products and solutions to compete with West . This is what Friedman actually means by flattening of the world . Discussing open-source he states the example Netscape , Internet Explorer and Mozilla Fire Fox browsers . He says that Mozilla is a dynamic , fast yet simple browser that was created by combined efforts of open-source programmers all over the world . If any problem occurs , user reports online and patch is developed within thirty six hours by pooling of intellectual resources General Electric led the way to outsourcing in early nineties and the practice was followed by many American companies by late nineties . It was at this point that American entrepreneurs realized the potential talent and capability of Indian engineers to handle most technical jobs .Businesses are not confined to a single building , country or region anymore . They have also developed diversified methodologies to achieve a single task . Friedman called this Geographically Distributed Development (GDD . GDD allows multiple teams , geographically scattered in different continents or time zones to coordinate on a single project This concept has its share of challenges and issues but its benefits surely out-number them

Next , he discussed that how in flat world small and large companies can benefit and have become more successful using a GDD model . Using pool of talent from global resources such as Indian Institutes of Technology and Microsoft Research Asia they have brought down any costs and expenses of employing these resources directly and relocating them in West . Reduced labor rates , collaboration in a groundbreaking manner and specialized workers contribute to lowering overall cost giving company a core advantage of low cost efficiency

Drawing from these practices Friedman categorizes business into three different types specialized , anchored and adaptable . Specialized businesses are those that offer goods or service that can not be distributed electronically for instance brain surgery is a specialized business . Anchored businesses are those that offer products and services to satiate the needs of a local market . Finally , companies that have neither specialized nor anchored businesses should be adaptable . They have to determine that what products and services will make them distinguishable in consumer 's perception as compared to their competition , what should be their competencies and completive edge and how should they respond to dynamics of market demands

Developing Countries and the Flat World

Beauty of this writing piece is that it contains views and sound bites from experts of the trade from around the world . One such expert is Jerry Rao whom Friedman interviewed . Jerry Rao is an Indian entrepreneur . His accounting company prepares tax returns for Americans He says that any activity that enables a business to digitize and decomposes the value chain and turn the work around will get valued

Throughout the book Friedman continues to relate relevant stories about Wal-Mart , JetBlue , Dell and UPS . For instance , he mentions in his book that when a burger is ed at drive-through of McDonald 's on Interstate 55 , the person taking the is at a call center in Colorado . The agent then send back the details to that McDonalds and the is ready by the time consumer reaches the window to collect it . Another example he related was of JetBlue who recruits housewives as call center agent doing it as a part time job . The author gives an example of The Virgin of Guadalupe which is a popular Mexican statue , manufactured their because of in-expensive Mexican labor . The said statue was found to be imported from China to Mexico because of China 's capability to produce and then export it to across the world to Mexico at a cheaper rate then Mexican labor could manufacture it for

Writer has basically identified two major events in the history of modern world and held the convergence point in the world as we see it today . One incident occurred on 11 /9 /1989 when Microsoft operating system was introduced . Unifying world 's computer software and operating systems need by sampling opening up Windows . Next , he says came years later on 9 /11 /2001 . When America was attacked , started war with terrorism and has since been at it . Perhaps , the underlying reason for mentioning the later is that the incident is important because middle-eastern geographic and political factors might eventually change as a result of this incident or that global businesses have been affected largely since war on terrorism began and oil price have hiked up increasing business costs

Companies and the Flat World For companies to succeed Friedman gives a guideline or set of rules in the flat world admitting that he is not a business writer but extracts these rules from his experience of writing this book Rule 1 : When the world goes flat-and you are feeling flattened- reach for a shovel and dig inside yourself . Don 't try to build walls

Rule 2 : And the small shall act big . One way small companies flourish in the flat world is by learning to act really big . And the key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther , faster , wider , and deeper

Rule 3 : And the big shall act small . One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big

Rule 4 : The best companies are the best collaborators . In the flat world , more and more business will be done through collaborations

Rule 4 : The best companies are the best collaborators . In the flat world , more and more business will be done through collaborations

Rule 5 : In a flat world , the best companies stay healthy by getting regular chest X-rays and then selling the results to their clients

Rule 6 : The best companies outsource to win , not to shrink . They outsource to innovate faster and more cheaply in to grow larger gain market share , and hire more and different specialists-not to save money by firing more people

Rule 7 : Outsourcing isn 't just for Benedict Arnolds . It 's also for idealists (Friedman , 2005

These guidelines are in fact the application of the 10 flatteners in today 's business model . He also stresses that Americans will have to find the ways to innovate the value chain models such that the influx of activity increases in USA with decreased costs . Another suggestion proposed was that skills should be developed in American workforce which will give them a competitive edge against Asian workforce . Next , he recommends that American businesses can focus on coming up with new and superior products , on which premium pricing could be charged . He realizes that it is not that simple . America 's edge over world in science and technology has eroded in recent years as most scientific research work has been done by foreigners and Americans are not attuned with modern sciences . He also quotes that almost one in five scientists in America is a foreigner Geopolitics and the Flat World Friedman 's discussion is largely based on China and India because the two are large countries , have high density population and a drive for work . Another example that he states is that Wal-Mart imported 18 billion worth of goods from 5 ,000 Chinese suppliers during 2004 (Friedman , 2005 . While Chinese economy is affecting the world more so on commodity and product basis , Indian industry is focusing on service aspects and the trend upward is not as dramatic as China 's

? The Un-flat World

He concludes this discussion in a shrewd manner , admitting that this change in India and China can not be stopped by west . It is also pointed out that the developing nations while being benefited from flat word still suffer from the `un-flattened ' aspects of it . He also notes that despite fast economic growth in the region , it is struck by extreme poverty in most regions . Author refers a World Bank report from 1990 that states that 375 million people in China and 431 million people in South Asian region (mainly India , Pakistan and Bangladesh ) live in extreme poverty . Level of education is low , health concerns are increasing . There has been an epidemic like increase in number of HIV /AIDS sufferers . Deaths are caused by diseases like malaria and cholera

? Globalization of the Local

Here the author claims that people had started believing globalization to be Americanization , however , the view is that globalization led to superior benefits to locals in the sense that American brands , American companies , American service providers etc were becoming famous due to the flattening of barriers between countries . However , the author claims that by flattening of boundaries , cultures have become far more distinct and diversification is actually flourishing , apart from homogenizing people . What the author means by globalization of the local is that rather than global media overtaking entire continents , companies and media of local arenas are becoming global to cater to the world

? Dell Theory of Conflict Prevention

The writer gives an interesting example of Dell for a successful business model where the business model flourishing in computer manufacturing industry was completely revamped . The company enjoyed benefits of just-in-time inventory and eliminated distributors while its counterparts were still using the conventional supply chaining methods The winning secret of this business was maintaining optimal business relations with suppliers

Friedman has elaborated on technological aspects of the new world at quite length . While he did try incorporating the political factors it remained confined to the concept of global Islamism and metaphorical of 9 /11 , making the writing seem a one-sided view of a picture . Another , aspect that the author has shed light on is that Muslim world is spread over a vast geographical area , from Africa to Asia Pacific region . It is a diverse community . The youth of this region , as per writer 's personal experience , has potential for coming forward on global forums . He relates that after September 11 Muslim youngsters have realized the need of freedom of expression and being heard

Conclusion

It is important to note that Friedman 's analysis throughout the book is based on anecdotal accounts collected through interviews and personal experiences . While this narrating manner is appealing to most readers one does stop to think whether such anecdotes do justice when the aim of the writer is to cover the universal aspect of globalization , economical changes and political influences . The books lacks the weight that facts and figure could help it achieve and depth that a closer and more objective view of Islamism and its impact on flattening the world can be discussed in an academic rather then metaphorical manner

Friedman goes on about Osama bin Ladin and global implications of 9 /11 in a rather obsessive manner . The book fails to notice that several middle-eastern economies are opening up to markets and American consumers and have high growth potential , for instance , Turkey , Jordan Tunisia , Morocco and Egypt (Looney , 2004 . The process , however , is slow and will take some time for rigid Islamism to subside . This doesn 't translate into disappearance of it but a gradual reduction in terrorism can be expected . Terrorism is still a threat to most of the world and the events in middle-east largely affect the global economy largely due to oil reservoirs

Similar is discussed by Aronica and Ramdoo in their book The World Is Flat ' The book is the critical analysis of the one in discussion and the gaps of substantial information left in Friedman 's work have been effectively filled (Aronica Ramdoo , 2006

Friedman opens up new debates as he concludes the book . There is absolutely no argument when it comes to technological advancement and communication being the key component of success in world today and tomorrow . Teams working on same project in differing geographical locations and time zones would need optimal communication to deliver optimal results and a flawless product . Managers have to communicate effectively to delegate the work and cultivate the organizational mission into its global workforce 's work ethic . An integrated platform is the answer to this requirement . It ensures that understanding at all organizational levels and destinations in maximum and equal

Friedman leaves on to the reader , an average American , to decide that whether they would want to compete with a unique skill set and competencies in this world which has been flattened politically and economically against emerging economies and developing countries or would they prefer outsourcing most value chain activities to Asian markets until a time comes when American economy is the outsourced activities and Asian economies for its own productivity

BibliographyAronica , R , Ramdoo , M (2006 . The World is flat ? A Critical Analysis of Thomas L . Friedman 's New York Times Bestseller . USA : Meghan Kiffer Pr Farrar , Straus and Giroux (2005 . Thomas L . Friedman , New York Times Columnist and Author of `The World is flat . Retrieved March 9 , 2007 from : http /thomaslfriedman .com Friedman , T (2005 . The World Is Flat : a Brief History of the Twenty-first Century . USA : Farrar , Straus and Giroux Looney , R (2004 . Why Has Globalization Eluded the Middle East Strategic Insights , Volume III , Issue 12 p...