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Faith in fakes? Travels in hyper-mobility

Updated Friday, 16th October 2009

Companies are global entities now, but it’s their employees who keep them grounded in the real world. It’s the way businesses deal with the global economy that makes the difference.

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The City of London skyline Copyrighted  image Icon Copyright: Jupiter Images The City of London This week’s recording of the BBC and Open University’s The Bottom Line is concerned with the impact on business in an apparent age of hyper-mobility and feedback in organisations. The three guests are drawn from: the Engine Group, an international communications company; the leading global electronic stock exchange NASDAQ (the National Association of Security Dealers Automated Quotation system); and the worldwide corporate travel services company Hogg Robinson. The title of this blog is taken from the name of the 1975 book, Faith in Fakes: Travels in hyper-reality by the Italian writer Umberto Eco, and the book serves as an introduction to semiotics: the study of the interpretation of symbols.

It seems that discussion of the socio-economic impact of globalisation is frequently symbolic and the claims to the hyper-mobility of society are in fact hyper-real, that is to say the inability to distinguish what is real and what is not. In more prosaic terms, it is the tendency to confuse form and function. The form is the growth of the World Wide Web, the Internet and other related electronic media, which appear to break down national barriers to business and social mobility, while the function relates to the purpose of ICT (Information and Communications Technology). ‘Form follows function’ is a long established principle in architectural and industrial design, but the reification of virtual media leads to the conflating of the two. It is a bit like modern economics in which technique has triumphed over thought, as the financial crisis and global recession has shown to all our costs.

For any idea or concept, one should apply a simple test: “Where’s the theory?”, “Where’s the evidence?” and “Where’s the data?” And, like globalisation, hyper-mobility is strong on theory, weak on evidence, and the data almost non-existent. If one looks at telephone, internet and airline traffic, there is a distinct supranational regional clustering which in turn reflects the economic strength of the world’s three dominant regions: North America; the European Union and East Asia. Also, if one looks at the digital divide, there are strong intra- as well as inter-national differences. If one adds in the locational decisions of firms, we can see that access to market still remains a prime consideration.

For example, Rolls-Royce Engines have a joint venture to produce engine parts in China – rather than exporting them from its UK manufacturing base in Derby – thereby reducing transport costs and environmental impact. NASDAQ had first mover advantage in being the global electronic stock exchange, yet it owns several stock exchanges in Europe, including NASDAQ OMX, the Nordic electronic financial trading platform, and a joint venture in the Gulf, NASDAQ Dubai. Although global in scale, the scope is distinctly regional. Furthermore, in an apparent age of digital determination, advanced business activities still crowd together in the world’s dominant cities, suggesting that agglomeration of these activities is an important source of competitive advantage. It is thus less about managing the impact of imagined hyper-mobility, but rather how to manage the real regional distribution of international activities for firms with global reach.

This brings us to our second possible fake, feedback to customers and employees. The comparative advantage of the Japanese economy and the competitive advantage of its firms have for many years been based on the process of kaizen (continuous improvement): incremental change with ideas coming from employees. However, for Japanese firms, customer feedback is also crucial in order to sustain the quality of the goods and services they provide and thus also their market share. Similarly, Motorola introduced the Six Sigma methodology to iron out defects and maintain quality of output. The caricatured British firm of the past, characterised in the Peter Sellers film, I’m All Right Jack, used the suggestion box, which often included appeals to the management of a physiological nature, but, by and large, feedback to employees was a didactic call to work harder.

Many contemporary firms cite their employees as their major asset and institute customer relationship management systems, but these are frequently mere rhetoric rather than an engagement with the internal and external reality they face. Feedback needs to be systematic and personal, whether it is to a customer or an employee. If firms don’t respond to the market, they go out of business. If employees are treated as liabilities rather than as assets, an organisation’s reputation will ultimately suffer.

Our faith in fakes is commonplace but if there is a prospect of a hyper-mobile society with all it entails, the dominance of white men of an uncertain age in the board rooms and executive committees will have to come to an end. This is one important feedback from the contemporary business environment, if whose existence is not to become counterfeit then travels in hyper-reality will have to be constrained, otherwise any future mobility, hyper- or not, will be limited.

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