From the Bookshelf Create value through integration by Isabella Lee Network orchestration strengthens power of enterprises in globalisation The speed and scope of global business activity is increasing by the minute. Freighters and aeroplanes perpetually cross the globe and data transmission is now conveyed instantaneously. Staying abreast of modifications, remaining poised to embrace the malleable networks of commerce and appreciating the implications of rapid change are the challenges for the new millennium. One company which seized the opportunity for reinvention is Li & Fung, now excelling in its new role as "network orchestrator" of more than 8,300 suppliers served by in excess of 70 sourcing offices in more than 40 countries and territories. It is remarkable to note however, that despite its far-reaching corporate scope, the company does not own a single factory. Victor and William Fung, who pioneered the transformation of Li & Fung from a traditional trading broker into the current multinational corporation, share their insights in the book Competing In A Flat World, a text co-authored by Wharton professor Yoram (Jerry) Wind who offers several broader perspectives for research and practice. As the use of personal computers increases and internet connectivity improves, established managerial methods are in need of refreshment. In a traditional company-centric world, firms with a focus on creating capabilities which competitors found difficult to imitate held a comparatively advantageous position. However, in a networked world, many firms, regardless of scale, have access to an array of capabilities via their networks. Many managers currently jump on the outsourcing and offshoring bandwagon, leveraging on improvements in global logistics and information technology. A number of these company leaders do not comprehend the fundamentals of orchestration, which ultimately secures control through empowerment and value through integration. The authors of Competing In A Flat World advocate the creation of "a flat business for a flat world" (p.13) and detail a set of clear principles applicable to any business. In particular, the book emphasises the need for a paradigm shift from the traditional view of competing firms towards the notion of competing networks. The book specifically identifies the call for a new role within networked enterprises — the network orchestrator — a player responsible for designing and managing these widespread, fluid networks. In essence, this means that a company with the capability to connect to and manage such networks — a company proficient in network orchestration — has the ability to access any resource it requires. With concrete examples such as the global chain of suppliers that contributes to the production of Boeing aircraft (p.5), and networks for innovation and marketing adopted by consumer goods brand names like P&G (p.135), the book reveals broader applications of network orchestration in the contemporary business world. Although the principles illustrated in the text were developed for the manufacturing industry, any manager from a business which forms part of a network will see the relevance. Further examples include managing strategic alliances and services, transparent innovation and co-marketing. Li & Fung's practices are also showcased, exhibiting the intricate elements of network orchestration and how ultimate network design is achieved for a specific purpose, at a particular time and conforming to ever-changing global regulations, economic constraints and political realities. For business leaders and policy makers, Competing In A Flat World is a consolidated source of theory and facts that organisations should embrace in the era of globalisation. Action is necessary now to ensure rapid adaptation to new realities using network orchestration. Content highlights: Organisations looking to grasp opportunities in the flat world need to understand the principles of "network orchestration" Access to capabilities, instead of size, makes companies competitive nowadays About the authors Dr Victor Fung is the group chairman of Li & Fung Group. He has chaired the Hong Kong Trade Development Council and served on the APEC Business Advisory Council. He holds a PhD from Harvard. Dr William Fung is the group managing director of Li & Fung Group. He has chaired the Hong Kong General Chamber of Commerce and the Hong Kong Exporters' Association. He holds an MBA from Harvard Business School. Professor Yoram (Jerry) Wind is professor of The Lauder Institute and professor of Marketing at The Wharton School, University of Pennsylvania. He is an expert, consultant and lecturer on business buying behaviour, market segmentation and market strategy. He holds a PhD from Stanford University. Taken from Career Times 9 May 2008, p. C12 Your comments are welcome at [email protected]