Membership of the European Union has come to mean many different things to many different people.
For some, the EU represents the ultimate loss of sovereignty. For them, it is a bland, impersonal bureaucracy giving to the disadvantaged with one hand, but strangling their economies with the other. For others, the EU is the sole guardian of our political sanity, and embodies the ultimate resolution of the deep-rooted tensions that have torn Europe apart so many times in the past.
Similarly, many managers remain ambivalent toward the EU. The endless talk of exciting opportunities and potentially lucrative markets has been offset by difficult bureaucratic realities, and by the sheer complexity of international trade. The EU, which seemed intent on simplifying and streamlining European interaction, is now seen by many as a complicating, obfuscating force. This must, of course, always be balanced against the unquestionable benefits of membership, particularly for disadvantaged member states.
These controversies are coming into sharper focus as the prospect of a single European currency creeps closer. This act requires a simple Yes or No response from each member state, and yet it is an immensely complex issue that goes to the very heart of each country's monetary identity. Nowhere is this more evident than in Germany and the UK.
In Germany, the idea of replacing the much-loved Deutschmark with a potentially weaker euro has generated much criticism and considerable financial uncertainty.
Indeed, it has sparked a harsh and far-reaching debate about the economic realities of a single currency. In the UK, the worries surrounding monetary union are more to do with the impact of a single currency on British sovereignty, and on British national identity in general.
In considering the effect of a deepening European union, it is important to remember that these changes are taking place in the context of rapidly evolving markets all around the globe. Since the early '80s, we have seen Southeast Asian countries establishing, consolidating and enhancing their roles in world trade. The American markets, both domestic and international, are undergoing internal reforms that are challenging the way we buy and sell our goods, as well as the very nature of employment itself. And, finally, the states of the former Soviet Union and Eastern Europe are finding their footholds in the international markets, and will seek not only to compete with established economies, but also to carve out a new role for themselves in the emerging political landscape.
In any case, early 1998 will see a special summit decide which countries fulfil the Maastricht criteria for adoption of the euro as common currency.
What does this prospect have to offer member states? It is one of the basic aims of the EMU to eliminate exchange rate uncertainty, and to thus facilitate the development of more stable economic and political links between states. It is also suggested that these moves will, of necessity, contribute to a convergence of interest rates among participating states.
Regardless of whether or not Britain joins the single currency, it is beyond question that on 1 January 1999, when the euro comes into existence, world markets will be transformed in the twinkle of an eye. Such profound and sweeping change needs to be examined in detail, and careful provision must be made in advance. This presents a real challenge for managers.
Managers will, largely, define the realities of the reformed European market. Clearly, information technology and information management will have leading roles in the uncertainty and flux that are the inevitable accompaniments of political change.
Indeed, as the pace of this change accelerates, and more East European economies find their feet in the market, the provision of up-to-date financial information will become evermore critical to economic performance.
If the British people decide to join a successful euro, then this will be a time of exploration and challenge for British companies. However, these opportunities will be married to a deep uncertainty, since the European markets, notoriously unreliable already, will be even more buoyant and unpredictable for some time following monetary union.
In the run-up to this level of change, each member state needs to commit itself clearly to one side or the other. If monetary union and a deepening of the single market is chosen, then preparation begins now.
Managers in both the public and private sectors need to assess the impact of these proposals, predict stumbling blocks to their own response, and, crucially, ensure that channels of communication are kept open in order to optimise the opportunities available. It is the last of these prerequisites, the enhancement of communication, that will present managers with their greatest challenge. As the marketplace becomes increasingly crowded, and as means of telecommunication multiply daily, it is of critical importance that managers keep their feet firmly on the ground, and ensure that communication within companies is both fluent and effective. Without simple, well-defined channels of communication at grass-roots level, no company will succeed in a larger, fast-moving marketplace.
The euro (and the full political union that could come from it) would represent neither paradise nor perdition for managers. It is likely to represent something between the two - with both opportunities and challenges in abundance. In essence, European union, and a single currency, will mean whatever we want it to mean. It is up to us, particularly in our role as managers, to determine the shape of the emerging financial and economic landscapes. Our ability to manage for the future hinges on our ability to imagine the future. And that, surely, is the greatest challenge of all.
Dr Brendan Kelly
House officer, Western Health Board, Merlin Park Hospital, Galway, Ireland Winner of the 1997 IM Managing for Tomorrow competition
'European union and a single currency will mean whatever we want it to mean. It is up to us, particularly in our role as managers, to determine the shape of the emerging financial and economic landscapes'.