By Fiona Czerniawska, Gavin Potter (auth.)
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Additional info for Business in a Virtual World: Exploiting information for competitive advantage
If you can sell all your goods via a series of computer servers across Europe but keep your sales staff in the USA, who should you pay tax to – the European country where the transaction takes place, or the USA where your physical assets are located? Thus, as companies rely more and more on information – as they operate increasingly in the virtual world – we should expect to see the state’s role in terms of regulation reduce still further. If we think our physical world is becoming deregulated, this is nothing compared with the free-for-all the virtual world seems likely to become.
Airport outlets restock their shelves every hour, based on the destination of outgoing ﬂights. 25 F. , Business in a Virtual World © Fiona Czerniawska and Gavin Potter 1998 26 BUSINESS IN A VIRTUAL WORLD We could go on; information is changing the basic premises on which we manage all our businesses. One by one, established rules are falling, assumptions are being questioned and theories are being disproved: The command-and-control organization that ﬁrst emerged in the 1870s might be compared to an organism held together by its shell.
Merging companies often created more barriers between functions than it dismantled. History has shown that economies of scale are relevant only in markets where all the participants are playing by the same set of rules: as soon as someone invents a new – better – set of rules, it does not matter how efficient you are, you are still going to be outmanoeuvred. Bookshops are a good recent example of this. Up until very recently in the UK, the price of books was governed by what was known as the Net Book Agreement (NBA) – a quasi-voluntary agreement between all the companies (large and small) to sell books at the same price.
Business in a Virtual World: Exploiting information for competitive advantage by Fiona Czerniawska, Gavin Potter (auth.)