MANAGERS IN THE FORMULATION OF GLOBAL STRATEGY

Challenges presented by China and India to U.S. managers in the formulation of global strategy



Challenges presented by China and India to U.S. managers in the formulation of global strategy

Introduction

The object of this paper is to address the environmental challenges facing China and India and thence outline some policies to meet these challenges within the overall ambit of sustainable development (Hart, 2007, 66-76). The challenges posed by the scientific realities of the natural environment are real and formidable; for example irreversible changes in ecology and bio-diversity; and the loss of assimilative capacity of air-sheds. Yet, there also exists an equally formidable set of challenges of an ideological nature. These stem from the mindsets of many policy makers - especially those trained as professional economists. The paper is structured in three parts as follows. The first part deals with ideological challenges.

The discussion here centres on a brief review of the history of economic thought. This review illustrates that the mindset of the contemporary dominant decision makers remains firmly rooted on mistaken premises which appeared in the literature during the middle of the last century. As a result many important environmental issues have failed to receive the priority that they deserve (Hart, 2007, 66-76). The second section displays an assembly of some of the important environmental issues faced by China and India. These issues can no longer be regarded as localised challenges of China and India. They are challenges that confront the entire world. The final section deals with corrective measures that recognise environmental challenges as business opportunities.

Ideological challenges

The main source for the ideological challenges stem from the fact that the discipline of economics (which often occupies centre stage in policy formulation) veered off into a trajectory in the late 1940s. One might say that this coincided with Paul Samuelson's (1947) publication of the

Foundations of Economic Analysis. Between the late 1800s and the 1940s, the natural environment and nature as such occupied a very important place in economics including neoclassical economics. The first ever concise text book in neoclassical economics was perhaps Alfred Marshall's (1891) Principles of Economics which was published in five volumes. In this text, Marshall presents a set of arguments that support the notion that nature is ultimate capital.

That is, if we examine any item that is exchanged in markets, and disaggregate it into components until we can disaggregate no more, then we will find that the ultimate components come from nature (Hart, 2007, 66-76). Apart from the several references to the role of nature as capital, Marshall even asserts that man does not create things but only rearranges matter2. This assertion, which is the First Law of Thermodynamics, was indeed influential in Marshallian ideology (Houghton, 2005, 473-513).

Marshall's writings also coincided with those of Professor Irving Fisher at Yale. In a seminal paper on Capital Theory, Fisher (1904) outlines three properties of capital, namely "a stock that is durable", "a stock that provides a flow of services" and "a stock that depreciates with usage" ...