The World Is Flat is a book about how the business world has become more interconnected within the last few decades. Friedman describes in the beginning of the book a trip to Bangalore, India where he visits “India’s Silicon Valley”(Friedman, 2007, p. 2) and is amazed at the level of technology that has come to the once third world country. Friedman then goes into the ways that the world has become flat and what he considers to be the ten flatteners.
The first flattener is 11/9/89 The New Age of Creativity: When the Walls Came Down and the Windows Came Up. (Friedman, 2007, p. 51) In this section of the book he discusses how the fall of the Berlin wall and the eventual fall of communism in Eastern Europe opens up the once closed area of the world to capitalism. He also discusses how the invention of the personal computer, and Microsoft Windows® have taken hold throughout the business community. The second flattener is 8/9/95 The New Age of Connectivity: When the Web Went Around and Netscape Went Public (Friedman, 2007, p. 0) in this section of the book Friedman discusses how the world can now take it’s personally authored pieces, that are now in digital form, to the next level through connectivity. He describes the early stages of the internet and how Netscape® became the original web browser. With the invention of the internet and web browsing now possible people and business from all over the world can now communicate almost instantaneously, shortening both distance and time differences throughout the business world.
The third flattener is Work Flow Software (Friedman, 2007, p. 77). Here Friedman discusses how software companies develop new or improved software to make the individual pieces of business come together seamlessly which provides increased productivity levels to all aspects of business. He also discusses how these same programs can be utilized by not only the firm, but also partners in business which frees up conversion time from the initial edge, research and development, to the final edge, delivery to the end user.
The fourth flattener is Uploading: harnessing the power of communities(Friedman, 2007, p. 96) In this section Friedman discusses the new found ability to have community based software. He discusses how developers and users can join a certain community and utilize the software and provide feedback to the developer on how to improve the software. When using the communities the user does not pay for the software that they utilize, rather it is there for all members to use for free.
Examples of some of these community based sites are weblogs or more commonly known as blogs and Wikipedia, where users can put their individual opinions (blogs) and facts relevant to virtually any subject (Wikipedia) for others to access and comment on. The fifth flattener is Outsourcing (Friedman, 2007, p. 126) In this section Friedman discusses how the business world has improved in it’s use of capital by outsourcing, sending manufacturing pieces of the end product to developing nations where labor costs are lower and productivity is comparable to that found in the country of origin.
The main recipient of the majority of the outsourcing done by the United States is India where there is a deep labor pool to extract from in order to increase the company’s financial status in the market. Other items being outsourced include income tax preparation, the reading of x-rays, updating of dictionaries, and some engineering. The sixth flattener is Offshoring: running with the gazelles and eating with the Lions (Friedman, 2007, p. 137) In this section Friedman details how when China entered into the World Trade Organization (WTO) the remainder of the world had to begin to move faster and faster to complete with the Chinese.
The definition of offshoring is when a company takes an entire factory and moves it to another country in order to produce the same product, in the same way, but at a cheaper rate in order to create greater profit for the company. The fact that China has so many low wage workers at it’s disposal, China had to agree to all aspects of the WTO in order to have a level playing field with the remainder of the world. Flattener number seven is Supply Chaining (Friedman, 2007, p. 51) In this section Friedman describes how supply chaining works, from development to production, to delivery to warehousing, to deliver to retail market, to selling to the end user, to resupply. He discusses how Wal-Mart, who is the world’s best at supply chaining has developed the most efficient supply chain ever seen. He details Wal-Mart can instantly know when one of it’s stores, anywhere in the world can make a sale of any one of its given products, remove it from its current inventory, and place a replacement order with the manufacturer, and have the manufacturer ship it to the Wal-Mart distribution centers.
The advent of RFID tags placed on each individual pallet allows Wal-Mart to know exactly what is on each pallet and where it is on the pallet decreasing the amount of time it takes to log and track inventory throughout the supply chain. With this efficiency, Wal-Mart has set the global standard in supply chain management. “Wal-Mart is the China of companies. It has so much leverage that it can grind down any supplier to the last half penny” (Friedman, 2007, p. 163). The eighth flattener is Insourcing (Friedman, 2007, p. 67) Throughout this section Friedman describes how UPS has developed ways to create revenue through doing various aspects of other companies business themselves, and synchronizing supply chains for companies large and small. He describes how UPS not only delivers packages for individuals and companies alike, but also how it has developed an inner business to go into other businesses and assess their supply chains, and even take them over, and make real time recommendations to improve those companies supply chains.
He also discusses how UPS has taken over some computer repair for Compaq and sold them on the idea of having their brand specific trained and certified technicians fix any computer returned to the company and divide the profits with the company without that company even seeing the computer and at the same time returning the computer to the consumer in shorter times than were previously available to them. He discusses how UPS and Plow and Hearth developed better shipping containers to deliver their products to the consumer virtually eliminating returns to the company.
The ninth flattener is In-forming: Google, Yahoo, MSN Web Search (Friedman, 2007, p. 176) During this section Friedman discusses how the growth of web based search engines has opened up the world of information to any person having access to the internet. He describes how the world now has instant access to any information conceivable. He also describes how multi media devices such as cell phones, PDA’s, and even hand held games are used to In-Form. He describes how many people don’t even keep address books anymore due to the powerful capabilities of these devices.
Friedman describes how items such as Apple’s iPod and iPhone can provide access to the internet wirelessly to keep the user constantly informed about any topic they wish. The tenth and final flattener is The Steroids: Digital, Mobile, Personal, and Virtual (Friedman, 2007, p. 185) Here Friedman describes how the use of all of these types of devices can put an individual or company on “business steroids” This book was a very interesting read for me as I find myself trying to figure out what I am going to do with my life and degree after the Army.
I have considered many different paths that I could take once I retire from military service and wish that I could give a definite answer to anyone that would ask me what my plans are once I do finally retire. I know that after reading this book that I have countless ways to consider all options open to me. If I decide to open a business I can use the majority of these flatteners to better compete on a global scale, even if I am running a business from my basement.
I can use many of these flatteners if I were to decide to work for a pre-established firm to keep me informed about the company’s standing in the business world, and once inside the business, use them to get and keep the firm both marketable and competitive within the industry. The information in this book related to the course by showing ways that organizations can improve inventory turn around cycles, cash conversion cycles, and means to keep the firm informed with competitors in the field.
It also gives ways on how organizations can use technology to keep digital records of all aspects of the firm’s financial management. It is my opinion that when considering any financial policy within a given organization, every advantage available to the company should be used. The CFO and his staff should use all of the flatteners outlined within the book in order to place the financial policy into effect, and then consistently use them to review, reconsolidate and reorganize the aspects of the financial plan of the company.
When reviewing the financial plan, the board of directors should use, the information in the book to be better informed about the decision on which they are about to embrace. The board must realize that the world has become flat in a business sense, and they should use this flatness to position themselves and the shareholders in the best area to maximize profit. References Friedman, T. L. (2007). The World Is Flat. New York, NY: Picador.