The current issue and full text archive of this journal is available at www.emeraldinsight.com/1352-7606.

htm

EDITORIAL NOTE

The great transformation in business and society

Reflections on current culture and extrapolation for the future
Simon L. Dolan and Mario Raich
ESADE Business School, Barcelona, Spain
Abstract
Purpose The purpose of this is to trace the current changes in business and society and identify the forces that shape the new landscape. It is argued that any attempt to continue business as usual is doomed to fail. Design/methodology/approach The paper describes the change of paradigms that is taking place, and calls for respective alignment of business and political leaders. It further proposes that failure to perceive the changes or to take action, will lead to catastrophic consequences for people, organizations and society. Findings The paper concludes that there is a great need to change the fundamental principles of society away from dominance towards partnership and care; to change the fundamental paradigms which have stimulated the economy for centuries away from growth, towards transformation; to change the fundamental values underlying business from financial gain towards balanced values. The impact on economy and business would be far-reaching, shifting their roles to focus on the real needs of people and society. Originality/value This paper proposes a roadmap to managing in tomorrows landscape and is a wake-up call to all people concerned with the future of our planet political and business leaders, and scholars who conduct cross-cultural research. Social responsibility needs to be taken seriously, and investment made in the future. Business and political leaders need to take the helm in this endeavor, and the role of the scholarly community is to provoke them to act. Keywords Culture, Forecasting, Business forecasting, Social change, Innovation Paper type Viewpoint

Transformation in business and society 121

Introduction We can be proud of the achievements of the western culture. We have made incredible progress in so many areas in such a short time. Advances in science, technology, medicine and many creative inventions have affected our way of life in an unprecedented way. Many things common today would look like magic to people several generations ago. We have been able to defeat so many deadly diseases; we have unleashed the power of the atoms. Humans can not only fly, but we also explored outer space and walked on the moon. The blueprint for life, DNA, was uncovered, animals have been cloned, and new genetically modified plants with have been created. We can move faster than any animal from one point to another on the planet. There is not much left unexplored on our planet. We have even created artificial intelligence, which will soon be as powerful as our own. Mankind has built immense cities, lengthy highways and railways and innumerable bridges. The electronic media deliver entertainment, news and education to any place on earth. Telecommunication allows ubiquitous communication from and to anywhere, at anytime. We are producing more food than we need. And more people

Cross Cultural Management: An International Journal Vol. 16 No. 2, 2009 pp. 121-130 # Emerald Group Publishing Limited 1352-7606 DOI 10.1108/13527600910953883

CCM 16,2

122

are living on this planet than ever in known history. We have been able to tap into petroleum using it as cheap and convenient energy. We can produce energy from the waves of the sea, wind biomass and the suns rays. It seems that man has finally subdued nature and we can live a happy life. Yet unfortunately the century that has brought the greatest advancement in all areas has been the most destructive and cruel of all. Two world wars and innumerable civil wars have cost millions of human lives. The arms race between the communist and the western block has produced enough deadly weapons to wipe all humanity from the planet. And there is yet more to come! We have never have had so many serious issues as at present. Mankind has unleashed forces which it can control to a lesser and lesser extent. Climate change, with its catastrophic consequences, is but one of the numerous problems that threaten the very existence of humanity. Observed holistically, we face fundamental problems in all important areas of life. Most of them endanger the very continuity of our culture and even the existence of mankind (Raich and Dolan, 2008):
.

The developed countries already have an unsustainable life-style and developing countries are working hard to catch up with them. However, they will never be able to reach the same standard of living because of the limited resources available. To secure a decent life for their people they will have to develop new ways of life. Developed countries too will have to implement a new lifestyle using less energy and far fewer resources. The basic economic paradigm of unsustainable growth, the mantra of quite probably the last phase of the capitalism, leads to an insatiable greed for more and allows only limited periods of growth followed by periods of economic crises and depression. Greed and fear are driving these economic cycles. The concept of sustainable growth is the perpetuum mobile, the perpetual motion of modern civilization. The large world population of 6.5 billion and the yearly net growth of 80 million is the main driver behind the key issues leading to environmental deterioration and the degradation (and ultimately) destruction of the ecosystems. Many countries have a youth bulge and 90 per cent of young people are living in the developing world. Already today we need 15,000 billon US dollars to keep our infrastructure transport, energy, water, sewage, etc.) working. In addition we need to upgrade and extend infrastructure substantially to cope with growing needs. Soon we will face serious energy problems. On one hand we are reaching peak oil (the moment when half of all available oil is used up) while on the other we are likely to experience growing problems with the electric energy distribution. This at a time when the need for energy is growing fast! Armed conflicts will surge again and terrorist attacks using biotech and nanotech weapons will create panic and may get out of control. Half of the world population is already living in cities and the number of megacities is growing. They are becoming more and more uncontrollable. Over one billion people are already living in slums today; a number which is likely to double in the next 30 years.

Just finding clean air, pure water, food and shelter is becoming a main priority for an increasing number of people. A large part of the world population is living in poverty. The global divide is growing fast!

Transformation in business and society 123

In addition, our near future will be dominated by the advent of virtual reality leading to new opportunities and threats as yet undreamt of. With the rapid increase in the capacity of non-biological intelligence, humanity will soon face a turning point in its development when artificial intelligence will be equal and then superior to human intelligence. All in all, the global rift in all domains is steadily increasing and its impact is becoming ever more dramatic. The question is why? Is it our fate? Is the destiny of each culture to perish? Is it an historical inevitability? Is destruction an intrinsic part of our culture? Or is this just a transitory period? And if this is the case, what happens next? It looks very much as if the development of our culture is already beyond the top of the S shape. And time is running out! Once we hit the turning point, there will be no way back; the change of the world that we have set in motion will become irreversible! So, why we can not use the formidable progress of science and technology to solve all these issues? After all, we are the authors of all these issues; so we should be able to solve them. The trouble is that we are facing a situation where all the issues are connected to each other and it is neigh on impossible to solve them one by one. Similar to the air in a balloon, we can release it with several pin pricks, but it is another story to put the same air back into the balloon. Above all overpopulation and population growth are the strongest drivers of theses issues. Most of which would disappear if the world population were much smaller. No surprise then that most of the solutions proposed so far, have not achieved much, but have rather exacerbated the situation. The clock is ticking! Even the most encompassing initiative, the Millennium Project, initiated and supported by the World Federation of UN Associations, in action for eleven years and including over 2,000 thinkers worldwide, is not addressing the issues of overpopulation and population growth. It seems that we will not find sustainable solutions within existing social and economic frameworks since most of those solutions are more likely to worsen the situation. Based on the wealth of information reviewed, we came to the conclusion that we are at the end of the dominance culture which has dominated the world for the last 10,000 years. Nevertheless, we also have a fabulous new world before us, with plenty of fascinating new opportunities, if only we are able to go beyond the comfort zone that the western world has created, beyond our social and economic frameworks of dominance and growth. To begin with, the politicians and business leaders will need to change the basic assumptions of modern civilization: These include the following steps: (1) Society in general needs to overcome the paradigm of dominance and move towards a paradigm of partnership and care. Eisler (1987, 2007) has articulated this well in many of her recent essays. (2) The economy needs to go beyond the growth paradigm (the assumed perpetual mobile for wealth) and establish a new economic order based on transformation (Raich and Dolan, 2008). (3) We also need to overcome the false idea of infinite availability of energy and resources, and establish the paradigm of minimal interference with the environment (Gore, 2006).

CCM 16,2

(4) Finally, we need a new social and economic value creation framework focused on universal human values (a decent lifestyle, access to education, etc.) and the balance of values. Society and the future generations are becoming as important stakeholders in the decision we make today as the customer and the shareholder (Dolan et al., 2007). An important question in this respect is whether the emerging countries, the so called BRIC (Brazil, Russia, India, China) and others, will go the same route as their western counterparts, or whether they will be able to develop a different culture. Most have an ancient cultural heritage; which should enable them to find new ways of life avoiding mistakes we have made in the developed world. So far they seem to be following the same path which allowed the western world to dominate the planet in the past and seem more impressed by our successes than our failures. This, sadly, is bad news for the future of the world. So the critical question is: What is necessary to force humanity to look beyond the path that has worked so well for the western society?. To begin with, one has to understand the great transformation that is raging around us. We will also need to take a closer look at the potential seeds for solutions and the impact they may have on society, economy and business. Politicians and business leaders need to realize that economy and business cannot dominate society anymore, since they are part of the problem. Society can no longer be servant to the economy. The great transformation We submit that we are in midst of the third and last cycle of the great transformation, which has lasted for over a million years. The speed of change and transformation has been increasing by a factor of one hundred from one cycle to another. The first cycle began about a million years ago, when humanity tamed fire. We call it the ancient culture; known as the Stone Age. The second cycle began about 10,000 years ago when the humans settled down and the rapid development of science and technology began. This is the age of dominance, characterized by power and ownership struggles. Finally, in the second half of the twentieth century the last cycle, the Virtual Age began; it is set to last for about a hundred years. We are in the midst of the transformation from dominance to virtual culture. This cycle is dominated by the development of computer technology, the basis of the virtual reality. The Virtual Age will have massive effects on the economy and on business. The biggest risk is a virtual reality comprising millions of virtual worlds based on the principles of dominance and growth. This would not only replicate the issues and problems we suffer today in the virtual worlds, but it would also become the basis for virtual entities created by artificial intelligence. This means that we would carry our existential issues and problems into the virtual worlds, if cyborgs (a symbiosis of biological and artificial intelligence created after Singularity many times more intelligent that humans) were also to become infected with these basic flaws and behave accordingly. The fundamental changes can be summed up as follows:
. .

124

in society from domination to partnership and care; in the economy from growth towards transformation and from profit towards balanced value creation; in education the development of the education-world based on the virtual reality and finally on Singularity I & II. Singularity is defined as a period of

extremely rapid technological progress; it is the technological creation of smarter-than-human intelligence. It is so rapid and so profound that it represents a rupture in the fabric of human history. Some would say that we cannot comprehend the Singularity, at least with our current level of understanding, and that it is impossible, therefore, to look past its event horizon and make sense of what lies beyond. This will give rise to an economy and ways of doing business not easy to imagine today. Society and future generations will once more become important stakeholders in value creation in corporations. The motivation to work and to achieve high performance will come from endeavors to secure the survival of the human species, the social good and the development of a decent standard of living for the majority of humanity. This will breathe the meaning back into business that was lost by the wayside with the introduction of the shareholder value. The key to understanding these changes lies in the difference between change and transformation. Transformation is irreversible change. The challenge will be to create transformation with new value for humanity. It should, therefore come as no surprise that corporate culture is moving towards the center of business management. Understanding the culture, knowing how to leverage the core values and which key levers to push, is becoming the most important factor for strategy implementation. Similarly culture will become the key for the implementation of the concept of beyond, leading to a new society, where the economy plays a new role (Raich and Dolan, 2008). Using a special semi Delphi methodology called AKIM, and after many rounds of consultation with leaders in politics, business, academia and the arts throughout the world, along with a reframing of the key issues and an extensive search for solutions we came to the following conclusions:
.

Transformation in business and society 125

We cannot solve current key issues one by one, because they are systemically connected to one another. We cannot solve current key issues within the existing framework for society and the economy. In the middle of this century the great transformation of human civilization will come to a turning point. It is up to us whether we breakthrough into a new world with a new society where all humans can have a decent standard of living, or whether our civilization breaks down leading us back to the Stone Age or worse to annihilation. First of all we need to stop the growth of the human population, because it is the biggest driver of all the key issues. We have created a current of destruction and we need to turn it into a stream of hope.

All this means that we need to develop a social framework leading beyond the existing one of dominance and ownership and economics based on pillars beyond the assumption of sustainable growth. If we want to have an idea of how this will affect the economy and business we need to be aware of the context we are operating in:

CCM 16,2

We foresee the up and coming Metaverse[1] encompassing the real Universe and many virtual worlds. We foresee a quest for universal human values and a demand placed on business to comply with the new value creation, leading to a balanced approach of the four core values: economic, ethical, emotional and spiritual. More and more people and nations are seeking new ways of life that allow meaningful work and sustainable lifestyles. The arts may go back to their roots and become pioneers of social change. We will see growing uncertainty, complexity and risk. The world is shifting evermore towards asymmetric threats, where small changes have a big effect. Globalization and systemic connectivity made this entire phenomenon more visible.

126

. . .

Social innovation and entrepreneurship are the first signs of the fundamental shift towards the new world. There is an abundance of literature showing why people resist changes. One of the obvious reasons is the level of discomfort (real or perceived) any more away from what is known entails. Yet we all (individuals, organizations and society as a whole) absolutely need to leave our comfort zone. We submit that the present business models will no longer serve us in the new world being created. Customers and citizens will no longer accept profit as the be all and end all of business existence. So businesses will have to reinvent the very reason for their existence and create meaningful work by creating value for society. This will lead to new kinds of value creation encompassing social, economic and human values. The most powerful human force to shape the world, entrepreneurship must also be redirected since today it continues to be principally oriented towards economic growth. The entrepreneurship of the future must also encompass social and human values, not solely profit. It is also crucial to make these transformations before virtual reality is fully mature. If we fail to do this we will carry all the problems of our current society into the infinite dimensions of the virtual one. The new paradigms will lead us towards a new society with a different economy allowing more people to enjoy a decent standard of living and establishing a more peaceful society. We can achieve it. The question is rather whether we really want to. The raging selfishness reinforced by rogue capitalism does not help. Increasingly, people tend to focus on an egocentric way of life following the motto, If it is good for ` s moi le deluge attitude me, I dont care about the consequences for others. This apre could be the nail in the coffin for our civilization. Indifference towards fellow human beings and their suffering, which can be encountered all around us, is certainly not a good indication of our future. Perhaps we should fuel our view of the world with some of the ancient Asian spiritual traditions to reinvigorate our spiritual life. Today economy and business can not be seen as dissociated from society, because they dominate and impact everything. An insatiable greed seems to have taken over, like a hex. In the future all value creation must encompass social and future values.

How might the economy and business world be affected? We expect to see significant changes in the Virtual Age. Table I summarizes in a snapshot some of these principal changes. The organization in the virtual world will move from real into hybrid and virtual forms as depicted in Figure 1. Purpose and meaning will regain their key importance in business leading to engagement and passion. The value creation will be hybrid (real and virtual) focused on a balanced values portfolio with society and the future generations as key stakeholders. At the same time, the shareholder will focus more and more on nonfinancial value. Let us examine the shift of some key values.
Key topic Society Economy Today (Male) dominance Focus on the growth of material and financial values Enlarging ownership, i.e. control over assets Maximizing profit Virtual Age Partnership and care. New ways of life Meaningful activities (work) to make life easier and better Meaningful world enhancing quality of life, producing and delivering goods and services for the new ways of life; making life better Social entrepreneurship and innovation Hybrid and virtual innovation Meaningful social and future values. Eco-friendliness. Balanced value portfolio focused on universal human values. New key stakeholder: society and the future generations Making life nicer Provoking new ideas and sensations Customization and individualization Reaching beyond life; delivering hope Expression of faith

Transformation in business and society 127

Business

Entrepreneurship and Innovation Values

Business innovation Economic values

Arts Religion and Worldview

Economization Instrument of dominance and control Growth in numbers importance and power Geographical growth Financial incentives feeding greed are used as key driver Humans supported by technology Economism! Everything is primarily valued from financial point of view

Performance People Overall

Meaningfulness and eco-friendliness will be the key driver People robots virtual entities After Singularity: virtual entities with conscience Meaningfulness and eco-friendliness will dominate in the society The Metaverse will cause a mental escape towards virtual worlds. We will see a loss of religious orientation, but not a reduction of faith and a withdrawal of many people from the real world. This may affect the availability of talents. Virtual talent scouts will search for talent in virtual reality

Table I.
Comparing todays norms and paradigms with those of tomorrow

CCM 16,2

128

Figure 1. Organization in the virtual world

Money Currency will still exist, be it in electronic or physical form. Nonetheless, the trade of currency and other businesses related to speculation on the currency markets will be heavily reduced since they fail to create any (meaningful) value. Most financial businesses will have to be reinvented because they are all too oriented towards economic value. Business drivers The main objective of business will be the creation of (meaningful) value with a balanced value portfolio. They will be considered from the point of view of service to the society, community and people; on how they make life easier and better. Creation and deployment of new ways of life will be considered as an important social value and will allow most people to enjoy a decent standard of living. Work will be seen as a meaningful activity. A job will be part of the personal development and life quest, the search for the meaning of life. A good eco-standing and eco-friendliness will be crucial for business success. Table II provides the roadmap to going beyond the comfort zone. Once the problems we are facing have been identified, their interconnectivity needs to be analyzed (in a systemic manner) and perhaps the seeds for solution can be seen (Raich and Dolan, 2008). Summary and conclusions In this paper we submit that we are experiencing an ultra-fast transformation which is leading humanity towards a turning point in the middle of the twenty-first century. This is a time when transformation will take place at a speed a million times faster than in the Stone Age. The windows of opportunity to address the key existential issues that we have created throughout the Age of Dominance and to prepare humanity for this crucial moment, are closing fast. We can stick our heads in sand like

Today Key issues ! Reframed key issues Seeds for solutions Transformation projects (TP) Outcomes New level of transformation A new society based on partnership and care New ways of life Advanced economics based on multidimensional transformation Cyber culture begins after singularity or Back to the Stone Age Annihilation of the human species New social framework: partnership and care TP: Stopping the population growth and the overpopulation TP: The partnership project

Next two generations

The destination

Advanced key issues

Migration due to the youth bulge and climate change Growing awareness of the great transformation Finding the direction for the New Society Growing pressure due to overpopulation Increased number of asymmetric threats and use of bio and nano weapons Robot wars and cyber wars in the Metaverse

Growing fundamentalism everywhere Definition of universal human values and global compliance Developments going way beyond Religion, e.g. the New Gnostics

Society Demographics and migration Dominance ! Overpopulation Politics Armed conflicts ! Lack of partnership and care Worldview and religion: Focus on economic values Lack of spiritual values ! Universal human values The environment: Ecosystems ! Degradation the ecosystems Science and technology: Virtual reality ! The Metaverse Acceptance of universal human values and global compliance TP: Establishing global compliance Advanced economics, new value creation and dynamic balance of values (economic, emotional, ethical, spiritual) TP: Green Sahara TP: Leveraging the solar power The Metaverse and citizens of many worlds Developing and establishing new ways of life TP: New ways of life

Breakdown of the ecosystems Virtual cities being created High-tech cities as fortresses isolated from the environment

Work and business: Energy Human resources Sustainable growth ! New ways of life

Singularity I & II, i.e. artificial intelligence superior to biological intelligence Human-like robots and marriages between humans and robots Developing Metaverse capabilities and development of fully fledged Metaverse (Deployment of the virtual worlds) Peak oil and run for alternative new materials Electric grid breakdowns Infrastructure collapses Virtual entities on board of organizations Eco-friendly and meaningful as driving ideas for business Development of multidimensional organizations based on the advanced economics Rebellion of the artists Alliance between the arts, the media and education TP: The World Art Space The Edu-World, i.e. education, edutainment in the Metaverse TP: The Edu-World Foundation

The arts: Production and distribution ! Access to the public Connected (holistic and systemic ) view The global divide ! The growing global divide

The ubiquitous and seamless access to the virtual reality blurring the frontiers between the real and the virtual worlds Worldwide free education (right for quality education)

Transformation in business and society

The roadmap for beyond

Table II.

129

CCM 16,2

130

an ostrich and hope it will go over, take the I dont care attitude or do something about. It is our choice. We can still make it, but we need to make up our minds fast. The question for the business leaders and scholars interested in cross cultural management is whether they should wait for the transformation to occur, actively prepare for the new society and economy, or should even try to drive the onset of the new order? More and more people question the soundness of the pursuit of sustainable growth. Therefore organizations able to move from growth towards (multidimensional) transformation will not only enjoy the advantages of making the first move, but will be greeted as pioneers of the new world. Scholars are more than welcome to delve into this field and study it more systematically. The development of the Metaverse will bring with it big opportunities; for example it will allow the creation of truly global organizations thriving in the whole Metaverse. Small local organizations will have the same chances as the behemoths of today. Large and global will have new meanings. Virtual reach rather than physical presence will be of utmost importance; a companys mindshare rather than market share will be important, the amount of social rather than economic value. As the title of this paper suggests, this is a wake-up call to all people concerned with the future of our planet. These include political and business leaders, but also scholars who conduct cross cultural research. We need to take social responsibility seriously, and invest in the future. It is time to turn the current of destruction into a stream of hope for the whole of humanity. And yes, business and political leaders need to take the helm in this endeavor, and the role of the scholarly community is to provoke them to act.
Note 1. The Metaverse is a fictional virtual world, described in Stephensons science fiction novel Snow Crash (1994), where humans, as avatars, interact with each other and software agents, in a three-dimensional space that uses the metaphor of the real world. The word Metaverse is a compound of the words meta and universe. References Dolan, S.L., Garcia, S. and Richley, B. (2007), Managing by Values: a Corporate Guide to Living, Being Alive and Making a Living in the 21st Century, Palgrave-Macmillan, London. Eisler, R. (1987), The Chalice and the Blade: Our History, Our Future, Harper & Row, New York, NY. Eisler, R. (2007), The Real Wealth of Nations, Berrett-Koehler Publications, San Francisco, CA. Gore, A. (2006), An Inconvenient Truth: The Planetary Emergency of Global Warming and What We Can Do About, Rodale Books, Dallas, TX. Raich, M. and Dolan, S.L. (2008), Beyond, Palgrave-Macmillan, London. Stephenson, N. (1994), Snow Crash, Penguin Books, London. Corresponding author Simon L. Dolan can be contacted at: simon.dolan@esade.edu

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.