Essence of Business Competition and Its Global Practices

Abstract

 In this paper, I am discussing the relevance of the peaceful humanitarian cocept to the hard environment of business compeition. The paper will elaborate types of competition and how they exist in the global world. The paper also reveals shortly on their roles and benefits in the global world. In the final chapter, the paper discovers that the latest developmet of business practices gave birth to further tendencies toward the peaceful humaitarian concept. The increasing practice of CSR concepts is an indication that the peaceful competition atmosphere is gaining attention within the business world.

Business Competition

Proposition:     The nature of competition in modern business environment can co-exist with the peaceful humanitarian ideals

Introduction

Business and competition has always been inseparable activities in life. Furthermore, as activities of business became the most important activities of our lives, we identify our world with competition and competitive acts. In the midst of this hard and competitive world, we often forgot that we do not exist simply to do business; instead, we do business in order to maintain our existence.

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In the light of this logic, we should be able to comprehend the role of business as one of the facilitators of life and not becoming life itself. Life on the other hand, is depending on how we choose to live.

Mother Theresa, one of the most loved humanitarian in the world, often stated that in the midst of all the hub-hubs, people tend to loose their inner peace, in the sense that they forget what they live for or what makes their life valuable.

In one of the speech, she stated that this is caused by the tendencies of our environment. Mother Theresa stated that we lost of sense of peace in life because we forget how to care for each other and co-exist in peace.

In this paper, I am trying to address the relevance of these humanitarian ideals to the modern business environment. Can there be peace among the competitive nature of the business environment and the peaceful ideals of the humanitarian concept? The paper will display some arguments regarding this topic (‘Competition vs Cooperation’, 2007).

Overview

            In the short, business understanding, competition is the act of striving against other for dominance or attainment of goals. Today, the term is familiar to us in various fields like politics, sports, business, etc. In this paper however, we are aiming to focus on business competitions rather than other types of competitions.

Levels of Competitions

            In business competition has slightly different definition than in other respects. It is the independent effort of two or more parties to secure business by offering the most favorable terms and business conditions to the third party. Competition in the world of business can be found right in heart of every business endeavors themselves. Experts identified three types of competition in its relevance to business. The first type is called direct competition. Direct competition is the field where products that has the same functions compete against each other. Business conditions could lead owners and managers to avoid such competition by differentiating product features, or to seek for it by offering the products with similar virtues as others (Kohn, 1986).

            The second type of competition in business is called substitute competition. These means products and services that substitute for each other compete. Business competition can also lead managers to create substitution products to take away a part of the market share from their competitors. The third type of competition in business endeavors is called the budget competition. This is the general form of competition in business. It involves competing for consumer’s disposable income. This means that in the business world, any products with any feature are generally in competition with one another.

 Different Forms of Competitions

            Besides existing in different levels, competition in the business world also exist in different forms. For instance, competition exists whether internally or externally within most companies. Beside the external competition we are accustomed with, there is the internal competition that occurs within companies. Often, managers of the company themselves created the competitive atmosphere inside the corporate structure. Sometimes, this is done by deliberately creating overlapping areas which causes divisions to compete against each other. Furthermore, the leader of the company can also instill competition between different product managers or brand mangers. They can compete in terms of sales or growth of sales of the products or brands under their responsibility (Ryckman, 1994).

Business Competition and Its Global Practices

In the increasingly global atmosphere of competition, companies are now fighting not only against its neighbor companies, but also companies that headquartered thousands of miles away. The prevalence of communication and information technology has allowed this condition. Companies are creating businesses regardless of national and cultural boundaries. Some countries however, reacted by limiting the competition that might occur within their territories by restricting trade activities to certain levels. Because competition is subject to legal restrictions in most independent countries, it can be legally prohibited using monetary or fiscal tools and also trade barriers (Kohn, 1986)..

However, instead of limiting competition between them, countries can compete against each other using competition policies and competition law. The competitions between countries are often varying subtle and hard to detect, however, their presence in the global economy are apparent for business observers. For instance, the United States, Japan, and The European Union are always in fierce but disguised competition to achieve economic supremacy in the global markets (Kohn, 1986).

Analysis

            Despite the tension and difficulties created by competition, most have understood that competition is a natural part of life. By this, I mean that along with its good and bad effects, the human race will always need competition to survive. This is proven by researches in the biology field, where competition created adaptation and the tendency to constantly improve oneself. In the business world, competition is seen as the pillar of capitalism itself. Competition in the business world stimulates creativity and innovation, supports eficency, lowering prices and enhances product qualities. Competition is also the reason why companies develop new technologies, new products and new services, which provided us better and broader product selection.

            However, competition is also recognized for its negative effects. It leads to duplicated effort and in some conditions, increased costs. Competition often leads to stressful way of life and destructive behaviors. Psychologically, over-competition will create a highly stressful environment which is horrible for a human soul. Materially, competition could lead to unjust acts of economic endeavors. Frauds and similar activities ruin the image of business as they are finally revealed to the society.

            Nevertheless, I personally believe that even the harsh competitive world of business has its compatibility with ideals of humectation concepts. For instance, recent development indicated the prevalence of the Corporate Social Responsibility (CSR) demands and initiatives. People are starting to realize that companies are also parts of the society which contains the obligations to co-exist in harmony within its environment. Companies are now demanded that they take full responsibility for their actions in consideration of the economic, social and environmental issues. Ethical concerns and competition laws are gaining people’s attention in evaluating corporate performance. Companies are actually loosing customers for their bad social values (Leef, 1996).

            Observing the latest development in the world of business, we can conclude that the humanitarian principles have taken their place in business activities. People in general have started to develop the sense that business endeavors should not be above the values of life. In a sense, the practice of business must now take account of social values and environmental concerns. Although we haven’t seen such a development that would allow Mother Theresa’s philosophy of peace to be the guiding light for global business practices, but the direction of today’s development indicated that the scenario of a peaceful competition atmosphere as suggested by Mother Theresa is gaining supporters.

References

Kohn, Alfie. 1986. ‘No Contest – The Case Against Competition’. Boston New York London: Houghton Mifflin Co.

Ryckman, R. M., Thornton, B., Butler, J. C. 1994. ‘Personality correlates of the hypercompetitive attitude scale: Validity tests of Horney's theory of neurosis’. Journal of Personality Assessment, 62, 84-94

‘Competition vs Cooperation’. 2007. Retrieved February 26, 2007 from http://www.huppi.com/kangaroo/L-spectrumfive.htm

Leef, George C. 1996. ‘The Virtues of Competition’. Retrieved February 26, 2007 from  http://www.libertyhaven.com/theoreticalorphilosophicalissues/ethics/virtucomp.html