Globalization has brought a new economy, an economy based on a Digital Revolution. Due to the enormous progress of the information technology, the business environment of the twenty-first century is changing rapidly. That is why this turbulent environment requires a new management of organizations. The management in the third millennium is, above all, a knowledge management.Management; Business environment; Globalization; Organization; Knowledge management.

Sorin George Toma

English

Research Papers in Economics

Economic Interferences  AE 
 
Nr. 19 ● Februarie 2006  1 
 
DEFINING MANAGEMENT FOR THE TWENTY-FIRST CENTURY 
 
Conf. univ. dr. Sorin George Toma 
Chair of Commerce, Faculty of Commerce, 
Academy of Economic Studies, Bucharest 
 
 
Abstract 
 
Globalization has brought a new 
economy, an economy based on a Digital 
Revolution. Due to the enormous progress 
of the information technology, the 
business environment of the twenty-first 
century is changing rapidly. That is why 
this turbulent environment requires a new 
management of organizations. The 
management in the third millennium is, 
above all, a knowledge management.  . 
 
Keywords  
• Management; 
• Business environment; 
• Globalization; 
• Organization; 
• Knowledge management. 
 
Rezumat 
 
Globalizarea a condus la apariţia 
unei noi economii, o economie bazată pe o 
revoluţie digitală. Datorită progresului 
enorm al tehnologiei informaţionale, 
mediul de afaceri al secolului al XXI-lea 
se schimbă rapid. De aceea, acest mediu 
turbulent necesită un nou management al 
organizaţiilor. Managementul în mileniul 
al treilea este, înainte de toate, un 
management al cunoaşterii.  
 
 Cuvinte cheie 
• Management; 
• Mediu de afaceri; 
• Globalizare; 
• Organizaţie; 
• Managementul cunoaşterii. 
 
1. The New Business Environment 
 
In the early years of the third 
millennium, economies of developed 
nations were struggling and many 
businesses fell. The twenty-first century 
promises to be turbulent ...  
In the past, the „old economy” was 
based on the Industrial Revolutions and on 
managing manufacturing industries. Now, 
the so-called „new economy” is based on 
the Digital Revolution and on the 
management of information. Globalization 
is the fundamental driver that underpins 
this new economy.  
As Sklair (2002) suggests, there is 
only one dominant global system 
structured  around, more and more, „the 
transnational corporations, a transnational 
capitalist class and the culture-ideology of 
consumerism”. It seems that globalization 
marks: 
 the hegemony of transnational 
capitalism in general, and the institutional 
primacy of the transnational corporations, 
in particular;  
 the internationalisation of 
finance, production and the free 
movement of capital and workforce 
around the world; 
 the increasing volatility of 
markets. 
As a direct function of the growth 
of competition in an international free-
trade system, globalization has changed 
the old business environment. 
By the end of 1980s, many forces 
have played a major role in reshaping the   AE 
 
Amfiteatru Economic  2 
business environment. According to Burke 
and Cooper (2003), some of the dramatic 
changes affecting organizations 
throughout the world are: 
• the increased global competition; 
• the impact of information 
technology; 
• the re-engineering of business 
processes; 
• the shift from making a product 
to providing a service; 
• the increasing disappearance of 
the job as a fixed collection of tasks.   
In addition, Kotler (2003) 
highlights: 
• digitalization and connectivity; 
• disintermediation and 
reintermediation; 
• customization and 
customerization; 
• industry convergence. 
In short, the organizations acting in 
this new business environment are much 
more exposed to the pressures exerted by 
the three „C”:  change (especially 
tehnological), conflict and competition. In 
this turbulent environment, the greatest 
challenge facing management of 
organizations is how to build a sustainable 
development. 
 
2. Management in the Twenty-First 
Century 
 
Since the advent of  computers and 
the widespread of information technology, 
the nature of the organization has changed. 
Drucker (1999), a forerunner in 
knowledge management, stressed the 
growing importance of information and 
explicit knowledge as an organizational 
resource. The creation and utilization of 
knowledge become the fundamental 
engine of wealth of the modern 
corporation. 
In other words, the modern 
organization is about knowledge. For this 
reason,  possesing knowledge is important, 
but to be truly useful, knowledge must be 
properly used. Knowledge must become 
intelligence capital within an organization. 
Knowledge is valuable, but intelligence 
capital is powerful.  
As a result, management in the 
twenty-first century is, above all, a 
knowledge management. Knowledge 
management could be defined as the 
process of codifying, collecting, and 
disseminating the organization’s 
knowledge assets.  
Knowledge resources represent a 
source of competitive advantage for all 
organizations. According to Gamble and 
Blackwell (2001) „managing knowledge 
requires a different perspective to 
managing land or capital. It is concerned 
with managing how people reason and 
how they make their expertise accessible.” 
In order to turn knowledge into 
action, management has to declare its 
commitment to change based on the kind 
of learning and innovation that contributes 
to competitive advantage. Knowledge 
management is probably 85-90 per cent 
about people and their ideas. Information 
technology is just an enabler for the 
management. 
The employees can learn to 
understand the soft issues around 
knowledge management and can be taught 
how to change. They can learn quite 
quickly, and have to  adapt and apply 
these ideas for themselves. 
On the other hand, knowledge 
management needs to be approached from 
the perspective of the knowledge 
consumer. Every employee has to better 
understand the specific needs of 
knowledge consumers. In this respect, the 
organization’s management has to ensure 
that all employees become more educated.      
In the Information Age, 
organizations have to become faster, more 
focused, more flexible and smarter. 
Otherwise, the organization’s ability to Economic Interferences  AE 
 
Nr. 19 ● Februarie 2006  3 
compete is reduced dramatically. That is 
why the long-term success is typically 
based on a combination of learning, 
innovation and knowledge.   
Learning is one of the few 
competitive advantages available today. A 
learning organization is an organization 
that prioritises learning. Also, the learning 
organization is a creative one. 
 Knowledge management has never 
been more important than it is today.   
3. Conclusions 
 
Management in the twenty-first 
century is based on knowledge. People 
and their ideas are valuable assets for any 
organization’s management. Knowledge 
management becomes increasingly a 
source of competitive advantage.   
 
Bibliography 
 
1. Burke R., Cooper C. L. Leading in Turbulent Times, Blackwell, Oxford, 2003 
2. Drucker P. Knowledge worker productivity: the biggest challenge, California 
Management Review, Winter, 1999  
3. Erickson S. G., Rothberg N. H. From Knowledge to Intelligence. Creating 
Competitive Advantage in the Next Economy, Elsevier Butterworth-Heinemann, Oxford, 
2005 
4. Gamble R. P., Blackwell J. Knowledge Management. A State of the Art Guide, 
Kogan Page, London, 2001 
5. Gosling J., Mintzberg H. The Five Minds of a Manager, Harvard Business Review, 
November, 2003   
6. Housel J. Th., Nelson K. S. Knowledge valuation analysis. Applications for 
organizational intellectual capital, Journal of Intellectual Capital, vol. 6, no. 4, 2005    
7. Kotler Ph. Marketing Management, Prentice Hall, Pearson Education, New Jersey, 
2003 
8. Nonaka I., Takeuchi H. The knowledge creating company: How Japanese 
companies create the dynamics of innovation, Oxford University Press, New York, 1995    
9. Singh S. The New Knowledge Management Imperative, Supplement to KM World, 
Nov/Dec, 2005  
10.  Sklair L. Globalization. Capitalism and its Alternatives, Oxford University Press, 
New York, 2002 

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From Knowledge to Intelligence. Creating Competitive Advantage in the Next Economy, Elsevier Butterworth-Heinemann,

Knowledge Management. A State of the Art Guide,

Knowledge valuation analysis. Applications for organizational intellectual capital,

Knowledge worker productivity: the biggest challenge,

Leading in Turbulent Times,

Marketing Management,

The Five Minds of a Manager,

The knowledge creating company: How Japanese companies create the dynamics of innovation,

The New Knowledge Management Imperative, Supplement to KM World,

DEFINING MANAGEMENT FOR THE TWENTY-FIRST CENTURY

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DEFINING MANAGEMENT FOR THE TWENTY-FIRST CENTURY

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