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March 31, 2022

8 areas of conflict that will influence the transformation of companies

Being a corporate decision-maker is becoming increasingly challenging. Companies face several issues related to business models, governance, and structure. These issues will become more contentious with stronger tension between (seemingly) opposing factors.

Check out the 2022 Foresight Report

Now in its fourth edition, the AXA Foresight Report explores the different dimensions of Progress to best adapt and assess future challenges and opportunities. This magazine-like publication addresses multiple visions of progress by combining them with the major societal shifts such as the future of companies, the environment, social polarisation and mind health & well-being.

Original Content: AXA Foresight Report

Companies must strike a balance between profit and purpose.

A company can no longer ignore the ecological and social impact of its activities and is under pressure to re-organize towards more positive and less harmful impacts. However, this can oppose the company’s financial objectives of maximizing growth, profit, and shareholder value

Companies will also face the question of integration versus fragmentation.

While the extended or fragmented corporation is a highly valued model, in constant development and powered by digital tools, it can also be fragile in times of great instability. The integrated company potentially has better control over its choices but can prove to be less nimble and the size of past investments can be an obstacle to evolution. The choice is between agility and resilience.

Do you favour vertical or participative management ?

Organizations are becoming flatter and operations are increasingly carried out by project teams, partly in response to the demand for autonomy and flexibility. However, many large, efficient companies remain hierarchical. Some large enterprises and/or networks are trying to harness the best of both approaches, creating hybrid organizations with varying forms of management

Localization and globalization?

The trend towards the globalization of value chains is well establishedand has led to significant gains in productivity and responsiveness. However, its ecological, social, and territorial effects are being challenged. The prospectof a more uncertain world and ecological challenges invite us to reconsider the potential of relocation of productive functions.

Technology is an important source of conflict.

Do companies see digital asa tool or an organizing principle? If digital transformation is placed at the heart of the value production system, this will greatly alter the company’s technology choices, especially when compared to competitors.

Should human resources be treated as a resource or capital asset ?

On one end of the spectrum is the organization that prioritizes the evolution,
commitment, and loyalty of its staff and the human collective; on the other
is the organization that considers people to be one factor in production among others and that emphasizes the formalization of tasks and substitutability.

Formality and informality.

The formalization of processes and organizations diverges from those of agility, flexibility, trust, autonomy, and self-organization, which may also value informal or even unproductive time.

The individual vs. the collective.

The choice between personalization, individualization (of careers, remuneration), a call or aspiration to autonomy, initiative, commitment, and self-realisation – and the pressure of organizational logic, the need to belong, the aspiration to collective work, and the need to redefine collectives with which to discuss or negotiate is an additional conflict that the future enterprise will have to debate and settle.

Tension Dashboard

These conflicting areas serve as a guiding compass to best define the mission, governance, and business model of a company. Although this dashboard over-simplifies what is a complex organization, it highlights some of the key tensions that will be driving changes in the companies of tomorrow. How would you position your dream company in the tension dashboard?

2022 AXA Foresight Report

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