Time's Harvest Fall, 1997

Small Group Report Three: What Business?

Last updated: 11/12/97
Link back to course Welcome

In view of my lateness in posting this, it is not due until 11/26.

First, review "The Law of the Situation" at the bottom (this is from Chapter 4 of John Naisbitt's best-seller, Megatrends).

[Also notice the remark at the end of this quotation, about the automobile industry. The U.S. has not lost the automobile industry. For me, this illustrates one of the problems with trend analysis; trends change (is this the same as saying that change changes?). However, Naisbitt's "Question for the 1980's" is still very relevant, perhaps even more so.]

Second, pick one of the companies below. When your Team has made its choice, post the choice in the Time's Harvest Conference so that everybody can see it. No two groups can post or analyze the same company, so get your choice in early! The dates and times on the postings will determine priority.

Third, develop a Team Report that answers the following questions:

  1. What business is this company really in?
  2. Consistent with the business it is really in, what should this business be doing that it is not doing?
  3. Are there any activities of this business that you feel are inconsistent with the business it is really in?

List of Companies

The Law of the Situation: The Railroads Did Not Understand
From Megatrends by John Naisbitt; Chapter 4

The kinds of changes that are forcing us to think long-term, however, are so pervasive and so powerful that what is really required in that we completely rethink our businesses as part of the shift to the long-term. One way to do this is by applying "The Law of the Situation." The Law of the Situation is a term coined in 1904 by Mary Parker Follett, the first management consultant in the United States. She had a window-shade company as a client and persuaded its owners they were really in the light-control business. That realization expanded their opportunities enormously. The Law of the situation asks the question "What Business are you really in?"

The Question for the 1980's is "What business are you really in?"

When the business environment changes, a company or organization must reconceptualize its purpose in light of the changing world. And now, with situations in constant flux, we must apply the Law of the Situation to present-day businesses.

One business that did not understand The Law of the situation was the railroads.

We all know that the railroads should have known there were in the transportation business and not just railroading. It was not so long ago that the railroad industry was the largest in the U.S. economy, and we were celebrating the Pennsylvania Railroad as the best-managed institution in the country. But times changed. We started to build big trucks and highways for those trucks and then jumbo jets. Even when the evidence was overwhelming that trucks and airplanes were the wave of the future, railroad men (and they were all men) remained, as Harvard Professor Theodore Levitt has written, "imperturbably self-confident." They thought they would go on forever. So did the people who continued to hold railroad stock.

Railroading is, I think, the great lesson for business. And today's appreciation of that lesson is to see that other great industries that have served us so well in the past are in the process of being replaced by the new tasks.

As with the railroad industry, it is difficult for us to believe that we are in the process of losing the automobile industry that has served us so well and has in fact been the economic underpinning of this country for so long.