Management Technologies in American Corporations an Exploration

¶ … Management Technologies in American Corporations

An exploration of knowledge organizations and their management of information using both the Internet and digital means

This paper will explore the pros and cons of both, and make recommendations for implementing them into companies, both large and small, and finally show real-world examples of these technologies in use in some of the most prominent American companies today.

Today, we live in a very complex world. Technology is proliferating at an exponential pace, and we are constantly bombarded with new technologies and ways of accessing information. Some of us find it very hard to keep up with all these technologies in our own homes (some of us may not even know how to use the internet). But these problems are much more problematic for businesses.

While we might be able to still operate, and live our everyday lives despite our lack of technical knowledge, companies and organizations simply cannot. In this new "information age," the greatest asset any company can have (big and small) is knowledge. Knowledge is becoming the basis for operations, sales, management, and every other aspect of day-to-day business. Knowledge can serve to connect employees. It can enable companies to operate in different areas of the country, or even the world, all by keeping touch through networks.

Knowledge can be efficiently collected by companies and used for additional profits in new marketplaces, or even to enhance one's original project. Knowledge can be shared by companies to make their marketing strategies more efficient. Knowledge can help companies target individuals most prone to buying their particular good or service.

With the increasing importance of knowledge, one cannot disregard the technologies that maintain it. These are the catalysts by which companies will survive in the twenty-first century. These can enable small companies to "boom" practically overnight, and likewise, can "bust" large, establish companies, no matter how strong their product or reputation is.

We are entering a world of "instability," but this word is not used in a negative connotation, but rather a good one. Instability, resulting from the exponential proliferation of technologies, will serve to increase competitiveness, and eventually benefit the consumer. Already, the consumer is becoming more and more accustomed to the benefits of this new information age. The efficiency provided by new technologies allows companies to focus more time on custom fitting their products and services to the individual's needs.

When one company follows this path, it is a given that its competitors will also. In fact, they might try and "outdue" the other in adapting to the customers' needs and pocketbook. This, in turn, creates a buying environment conducive to the consumer.

Taking advantage of these new technologies and methods for obtaining and maintaining information, however, are not always easily done. The implementation can be expensive, not only monetarily, but also in terms of company policy. I will explore some of the obstacles that taking advantage of these new technologies poses, particularly those dealing with the workforce and employees.

Furthermore, the implementation of new technologies and strategies will require more risk on the part of companies. I will emphasize that no company or organization can afford to maintain the status quo in the new era of information. Knowledge can shift the advantage so quickly from company to company, that it is paramount that CEOs constantly explore new technologies and innovations in their companies. It is also important that they look beyond their present markets into potential new ones.

In order to understand knowledge organizations, we initially need to explore the idea of knowledge, and how it pertains to the corporate world. Knowledge is not a complex idea, but rather a broad one including all aspects of information.

We are constantly made aware that "knowledge" is the key to success, and this is a very accurate statement. The company, Knowledge-Based Solution's website contains the following quotation, "In the conduct of human affairs, there are certain truths which if applied at the appropriate time will result in making the best use of the limited time each of us spends in this life. We seek to build tools which assist to identify, save, organize and publish these truths."

In other words, knowledge guides our path to success or failure. We can have all the tools, the labor, and the motivation, but if we do not have knowledge, we are missing the most essential piece of the puzzle.

To begin, I am going to emphasize the importance of knowledge using the example of Northrop in the late 1980s. At the time, Northrop was suffering from low profits (Feigenbarum, McCorduck, Nii 1988, 16). Their skilled, well-educated workforce had eroded, and they were losing business to other domestic companies. They bounce back, however, through a number of measures based around "knowledge," and prove, to some extent, that knowledge is the most valuable asset a company can obtain.

Northrop, an Aircraft Company based in California, manufactured very sophisticated fighter jets (Feigenbarum, McCorduck, Nii 1988, 16). Their slowdown was primarily due to the production of their sheet metal, which took sex to eight hours of a planner's time, and required revisions when it was tested (Feigenbarum, McCorduck, Nii 1988, 16). The process was error prone and lengthy, and it drew too many recourses from the company's other projects.

Planners working for Northrop stumbled across a computer system developed North in Silicon Valley. The system (far before the Internet or digital revolution, but still relevant for this example) could be programmed to, "reason with this knowledge to arrive at solutions to problems of diagnosis, interpretation of data, design, and planning" (Feigenbarum, McCorduck, Nii 1988, 20). The computer system had the potential to prioritize the vast multitudes of data used by the planners at Northrop, and cut their labor expenditures, particularly those involving the sheet metal, significantly (Feigenbarum, McCorduck, Nii 1988, 20).

One of the main problems with the time and assembly required for constructing with the sheet metal was many different variables involved. The Northrop planners hired Silicon Valley computer computers to customize a program that could rationalize these variables, and subsequently prioritize them. The venture was a complete success, and planners were able to significantly reduce the time spent on the sheet metal (Feigenbarum, McCorduck, Nii 1988, 30).

This story, told in the book, The Rise of the Expert Company, concludes with the assertion that knowledge is the most important asset to a company. "(Northrop) early on recognized that some major costs in manufacturing are no longer on the shop or factory floor, the so-called touch costs. Much of the manufacturing cost is nontouch: the white-collar work, the decision making, problem solving, and data processing that support manufacturing" (Feigenbarum, McCorduck, Nii 1988, 30).

This story goes to prove that "knowledge" is essentially a catalyst for any organization's success. Even the large industrial companies like Northrop need to rely more on knowledge than their expensive production assets. Knowing that knowledge, or intellectual property is of paramount concern for most businesses, it is necessary to explore the means of obtaining knowledge, and maintaing it.

Knowledge is an incorporation of many things, including data, statistics, information, ect. In the business world, along with many other aspects of life, knowledge is power. As previously mentioned, it is the catalyst for success, above and behind anything else an organization can offer.

In this paper I will focus on knowledge and their relationship with two contemporary technological mediums: the world wide web and the digital marketplace. These two mediums are essential in the management and transportation of knowledge, and will continue to expand and advance as time progresses. In order for the organizations of today and tomorrow to compete in the real world, they need to take full advantage of these mediums, and seek to optimize their management of knowledge.

In their book, Knowledge Emergence, Ikujiro Nonake and Toshihiro Nishiguchi (2001) define three different types of characteristics of knowledge organizations: individual and societal knowledge, tacit and explicit knowledge, and a fundamental difference between understanding and agreement in organizations. They emphasize the importance of knowledge concerning business and organizations, and of this knowledge, they believe the most important is that of societal relationships. They assert that, "given these characteristics, more attention should be paid to the issue of social relationships as the crucial foundation for organizational knowledge development" (Nonake and Nishiguchi 2001, 30).

Their argument involves an in depth exploration of why societal knowledge is paramount when considering all the different aspects that pertain knowledge. For the purposes of this paper, however, I will stick to arguing in favor of the general idea of "knowledge," as opposed to a particular subgroup of it.

In his book, A Design for Business Intelligence, Curtis Symonds (1971) asserts that, "The concept of management information is not a recent outgrowth of the computer age. Nor is the more formalized concept of a management information system by any means confined to the capabilities of electronic data processing. Information and information systems for the management of business enterprise are as old as commerce itself, and, like commerce, have changed only in size and complexity with the advancement of technology" (1).

The unlimited capacity to store and deliver knowledge has created a new dynamic in the business world. It also has increased the demand for these new technologies, creating an environment of constant change and instability in the business world. This is not to say that this instability is necessarily a bad thing. By referring to the new dynamic as unstable, I mean that the advent of new technologies requires companies to constantly be looking to employ, or else they will, "fall by the wayside."

New technologies, internet and digital in particular, allow small companies to grow overnight, and can also plunge large companies to bankruptcy. Symonds (1971) stresses the increasing importance of information to the success of a business, "No businesss, however small, can be operated successfully without certain basic information concerning its objectives, capabilities, or results. It cannot be operated or controlled without a continuing flow of information regarding its potential market or sources of supply, its capacity or required level of investment, or its planned volume and projected cost of operations" (3).

Management of knowledge is becoming increasingly paramount in these organizations. Some have even gone as far to say that it is by far the most important aspect of any business. Those companies not taking advantage of the new forms of knowledge management will not survive in the long run. According to some experts, it is imperative that they move to establish new means of information management using the new technologies.

In their book, The Information Imperative, Cyrus Gibson and Barbara Jackson (1987) define this term as: "The urgent, obligatory need for business (and individuals) to respond to the opportunities and competitive threats created by the revolution in information technology and by the resultant huge increase in the availability of information" (1). In other words, the "imperative" is the necessity of organizations to pursue information and knowledge in this world that is being transformed into one dominated by the world wide web and digital technologies.

Gibson and Jackson (1987) note that the imperative is strictly about information, but its consequences are much broader in scope (4). They point out that like capital and labor, it is recourse. It is a primary recourse for managing business problems and it is a key for discovering new opportunities and advancements (Gibson and Jackson 4).

In his book, Mastering the Digital Marketplace, Douglas Aldrich (1999) quotes Ronald Reagen as saying, "Information is the oxygen of the modern age. It seeps through the walls topped by barbed wire, it wafts across electrified borders" (237). Even as long as a decade ago, people were aware of the rapidly approaching age of knowledge. They knew that raw power was eventually going to be replaced by the power of information. The information superhighways of the future were the keys to success, and those who controlled them would be those achieving it.

There are two primary components of the information age: the world wide web, and the digital marketplace. The world wide web has already greatly transformed the way we live, while the digital marketplace is only beginning to do so. The main focus of this paper will be how companies can convert their knowledge organization digitally, but some attention will be spent on the world wide web.

To begin, the web went from basically an idea to a revolution in only a matter of a couple decades. Very few people and organizations foresaw the drastic effects that the world wide web had on industries, the marketplace, and the management of information.

In his article, "Internet Apocalypso," Christopher Locke (2000) describes the onset of the Net, "The Net grew like a week between the cracks in the monolithic steel-and-glass empire of traditional commerce. It was technically obscure, impenetrable, populated by geeks and wizards, loners, misfits" (3). Locke (2000) points out that its growth was due not to its role in business, but rather because it offered ideas (3). The internet became an incredibly rapid way of managing information. People could interact without constraints -- they could access information at the ease of buttons, whereas it might take them hours looking through a library (Locke 2000, 4).

The internet eventually attracted business, and created a new marketplace. This marketplace attracted everyone from high powered CEOs, to computer nerds, to "average Joe's." Most importantly, though, the internet changed the landscape of knowledge management, and in turn, it set the path for a change in the way organizations do business (Locke 2000, 10). In his article, "The Longing," David Weinberger (2000) writes, "We don't know what the web is for but we've adopted it faster than any technology" (43). The internet was, and still is today unique in that people use for no reason at all. Not only is it a medium for transporting information, but it also serves as a source of entertainment. The usage alone by users essentially "surfing" the world wide web clocks in at over millions of hours a year.

Company intranets, which are basically internal networks running on the Internet, are one of the primary sources of knowledge sharing employed by companies today (Bonnet 2000, 237). Intranets streamline company processes, such as: delivery, purchasing, and developing of products (Bonnet 2000, 237). In fact, purchasing online is more inexpensive and easier than the actual purchase of products through retail shops.

Another advantage to the intranet is that it connects employees. The intranet allows a company to spread its employees in many different areas of the country, or even the world, yet still remain in communication with them. An example of the benefits of intranets is they can train people, organize employees' accounts, and inform about new policies and procedures (Bonnet 2000, 238).

The intranet is also effective in reducing internal costs. They can keep administration and management down to small numbers by serving as a "universal" administrator. Bonnet notes that, "Intranet communication lets companies do the most with the least head count" (238). She points out that a firm can adjust its internal networks to guide company policies, and in turn, reduce the number of employees needed (Bonnet 2000, 238).

The point of mentioning the intranet is that it is yet another example of the way companies maintain their knowledge. Intranets, however, are only the "tip of the iceberg" when it comes to modern day technologies. Networking and the transfer of information have only begun to transform.

Every year, technology grows by leaps and bounds, and new, faster ways of maintaining information are developed. The intranets, while still important, are slowly becoming a thing of the past. We are entering the digital age, where the internet is only a secondary means of transporting information. Companies that just converted to the World Wide Web will soon realize that their network has just "gone out of style."

We all witnessed the internet boom and bust, but this is not to underestimate the importance of the internet. The bust was not a knock against the potential of the World Wide Web, but rather bad timing and resource management. Disregarding the eventual bust of many of the dot-coms, we can explore some of their origins, and the speed in which they developed and took form.

One example is the website, Sparks.com. Founded by Felicia Lindau, this company offered greeting cards that could be custom designed according to the customer's demands (Carlassare 2001, 189). It was brilliant in that it catered to the customers' needs, as opposed to a local gift shop where the cards are pre-designed and selection is limited.

Lindau came up with the idea when she was working as an account supervisor at an advertising agency (Carlassare 2001, 190). She envisioned the idea after forgetting to buy a card for a special occasion and realizing that all the gift shops and pharmacies were closed. She was faced with the dilemma that she could not be able to send the card on time, when she came up with the idea of a way for customers to custom design and send cards with just a few easy clicks of the mouse.

Her idea transformed into multimillion-dollar company that is still thriving today. The catalyst to her success is a theme I have previously harped on, and will continue to emphasize throughout the paper -- that the technology surrounding information technology is so advanced (and advancing at such a fast pace) that simple ideas can conceptualize into actual million dollar organizations in an incredible short amount of time.

The new revolution -- today and tomorrow's revolution -- is digital. Digital ways of processing and storing information is going to be the predominant technology of the future. This is not to say the internet will be obsolete (the two will intertwine with each other) but rather somewhat of a secondary means of transferring information.

The focus of the next part of my paper is on the digital revolution, and what companies need to do to prepare for it. I will argue that every company, no matter what the product or service, will need to take advantage of digital technology.

Also, I will argue that information is slowly becoming the most important part of a business. Intellectual property, as it is refereed to, will soon become more valuable than assets, even to the wealthiest, most powerful organizations.

Furthermore, information can become a commodity, and be sold like a product or service. This commodity will not only increase the revenues of companies, but can also serve to bolster or enhance the company's name and image.

Finally, I will argue that with the onset of the digital revolution, and mass proliferation of digital technologies, no company will operate in the traditional sense again. Every company will need to constantly be testing new technologies, markets, and trying to "reinvent themselves," in order to stay on top of the competition.

Like the world wide web, the digital marketplace has had a major effect on today's organizations. Unlike the world wide web, the digital revolution is one of quicker advancements and flows of information (Aldrich 1999, 7). Aldrich (1999) asserts, "You've probably heard about how businesses in the early 1990s needed to think in terms of "Internet years," meaning that technological advances made within a single calendar year outpaced progress that formerly took seven years. Get used to that sort of pace, because 'digital years' will speed by even more quickly than Internet years" (7). He continues by saying that digital transportation of information is much quicker and efficient than that of the internet, and as a result, these technologies will progress at a much greater pace.

In a way, we were blown away by the internet revolution. All of a sudden, "brick and mortar" organizations found themselves falling behind in the fast growing internet marketplace. Consumers were relying more and more upon the world wide web for shopping and information, and organizations rushed to regain their footing in the marketplace by establishing websites.

The internet revolution also "opened the door" of many new types of companies and organizations. In his book, Aldrich (1999) points out the Encyclopedia Britannica vs. Microsoft Encarta example. The Encyclopedia Britannica was the primary source of knowledge since its origin 1768 (Aldrich 1999, 27). Its high price ($1,500 to 2,200 per set), however, made it extremely hard to obtain for many families and organizations. The internet revolution, however, altered the landscape for the sale of Encyclopedia's in the United States (Aldrich 1999, 27).

Aldrich (1999) points out the major reason for the collapse of the sale of Encyclopedia Britannica's was the emergence of the electronic encyclopedia, Microsoft Encarta (28). Encarta was a CD-ROM disc that was not only portable and easy to store, but also much less expensive than the Britannica book version (Microsoft Encarta was priced around $50) (Aldrich 1999, 28).

There was essentially no way for Britannica to maintain its sales. For one, it could not drop its price of books to compete with the $50 Encarta CD-ROM, as it cost the company at least $200-$300 to print their books. Also, the Encarta version offered many things that the Britannic books could not, i.e. convenience, interactive features, and many other multimedia options (Aldrich 1999, 28).

Aldrich (1999) points out that, Britannica's single largest expense for getting its encyclopedias to market involved neither production nor content development activities. Its largest costs were those built into its distribution chain, which had traditionally used a massive direct salesforce to get printed volumes out the door and onto customers' bookshelves" (28). The people at Microsoft, on the other hand, simply duplicated their product for around $1.50, and distributed their product not only independently, but also as an extra for purchasing new computers and peripherals (Aldrich 1999, 28).

This example is a very persuasive one for the impact that the internet, and ultimately digital, revolution has had on the world. A company that had been around for almost two centuries nearly collapsed with the change of technology mediums. It did not matter the prestige or reputation of their product, because it was so much more expensive than the competition. New technological mediums are incredibly effective in shifting the way products are delivered.

Aldrich (1999) notes that, "digital information was dramatically easier to search through, and could be more cheaply and readily kept up-to-date, it was replacing print in all sorts of research-oriented publishing niches (not just encyclopedias)" (29). As previously mentioned, this example has been mirrored outside of the encyclopedia industry. Everywhere, products and services are being transformed by the internet and digital age to conform more closely to the customers' needs and preferences.

Aldrich (1999) explores the consumer role in the digital economy. He points out the today, the consumer is more empowered than ever. Take for instance, the example of Encarta vs. Britannica. Before the electronic versions of encyclopedias were available, people only had one outlet for quality, reputable information, and it was in the form of very expensive books. After the electronic versions entered the marketplace, however, consumers could demand more out of their purchases. The news versions were more informative, incorporated interactive learning, and were much cheaper than the book versions.

In order to stay competitive, Britannica had to produce its own electronic version, in which it tried to offer more options than Encarta, and at a more reasonable price. What we see occurring is much greater competition, and more deferences to what the consumer wants. Aldrich (1999) sums it up by saying, "Already, some companies have ruined it for the others. They went and built products that their customers actually wanted, delivered them when their customers wanted them, to the place their customers needed them, and even provided great after-salve service and support. Now, consumers are spoiled. They expect this treatment from everyone" (8).

The internet and digital revolution, more than anything catered to the consumer. The more technology that is introduced, and the more knowledge that is made available, the more picky consumers become. In the new digital economy, the balance of commerce power shifts from the provider to the consumer (Aldrich 1999, 9). Aldrich (1999) compares this new economy to the old one. Before the internet and digital revolutions, consumers had very little direct power over what goods were available, and their pricing (Aldrich 1999, 9). Aldrich (1999) notes, "By necessity, being a consumer in the industrial era meant accepting limited choices and making frequent compromises" (9).

He goes on to say that unilateral product development strategies were predominant, meaning that products were produced with only the general populace in mind, rather than the individual consumer. Companies did not have the recourses or tools to cater their products, and consumers did not have the leverage to demand more out of their products (Adrich 1999, 9).

The new age of information technology, however, has shifted this balance of power. The digital economy allows companies to be incredibly more resourceful, and in touch with their consumer. Aldrich (1999) notes, "Companies are increasingly responding to this consumer sense of value through mass customization techniques (that is, making exactly what the consumer wants when they want it" (10). The more choice and customization allotted to the customer, the more they demand of it from their other product and service providers.

Aldrich (1999) notes that this new age has led to a greater informed and more demanding customer. The implications of this new dynamic are worth noting. Firstly, in order for companies to remain competitive, they need to meet the custom needs of their customers as well as, or even better than, their competitors (Aldrich 1999, 11). They also need to take advantage of the vast outlets of knowledge available to them. They need to be aware of market trends and cycles. They need to investigate cost-effective alternatives and distribution methods (Aldrich 1999, 11). They also need to put the customer at the foreground of their business priorities and strategies (Aldrich 1999, 12).

Aldrich (1999) points out that, "Being a consumer in the industrial era has, thus, generally meant accepting limited choices and accepting compromise, often settling for the best available option, even if it isn't a perfect match" (91). As consumer intelligence grows, more knowledge is gained on the part of the consumer, and more consumer empowerment is established. Aldrich (1999) compares this "law of increasing knowledge," with the economic theory of "law of increasing returns" (91). What we will witness is an exponential growth of the empowered consumer, demanding more simplicity, quality, customization, improved content, and time saving from their products and services (Aldrich 1999, 92).

The next focus of this paper will be on what is called the, " Digital Supply Chain," and its importance for organizations in this new digital age. Traditionally, organizations relied upon physical ways of generating value (Aldrich 1999, 80). Mechanical means, such as assembling lines, were the primary source of value production for a company. The onset of the digital revolution, however, will gradually shift this mechanical supply chain, to a digital one (Aldrich 1999, 83).

Aldrich (1999) notes that the digital supply chain involves three tenets: Information and innovation, availability of capital, and globalization (86). Information and innovation are incredibly important in providing the customer with what he or she wants.

Information, especially new technology, keeps companies above their competition, while innovation helps companies in all sorts of respects, from developing new products, to conforming to the customers' demands.

Capital is important in all business ventures, but increasingly important in the digital supply chain. Expanding global markets and low inflation rates have increased the amount of capital in the world, and contributed to the increase in digital technology (Aldrich 1999, 86). The vast resource of capital also allows small technological companies to immediately implement their ideas, whereas a lack of funding would severely slowdown their progress. This even further perpetuates the proliferation of technologies in the digital supply chain, as an idea can become a multimillion dollar investment in a matter of months, and maybe even weeks (Aldrich 1999, 86).

Lastly, globalization serves to eliminate many previous barriers in the information age. The elimination of regulations allows those organizations that are most efficient to reach customers throughout the world. Furthermore, competition from around the world even further stands to increase the efficiency of companies in the United States (Aldrich 1999, 86).

The key to success in the digital age is by employing this digital supply chain; however, its establishment is not as easy as one might presume. The journey toward embracing digital information management is rather complicated, and often problematic.

Aldrich (1999) notes, "A digital value network isn't created overnight, and you can't put the business on hold while you fill the whiteboards with your 'master plan.' Moving from business as usual to a DVN can and must be done in a way that supports and enhances your current business model while moving you incrementally in the right direction" (Aldrich 199, 107). In other words, the transformation process is not one that can be implemented immediately. The transformation needs to be a slow process of converting old knowledge management techniques, to the new digital ones.

An example of an organization moving toward the digital value network is Dell computers. (Aldrich 1999, 111). Dell is in the process of taking its ancillary support activity, and forging it into a community in which every participant contributes to the profitability of each other. The primary means of this venture is through the mass exchange of information, which is done using digital means (Aldrich 1999, 111).

The knowledge Dell currently has is only useful to Dell's suppliers, and only when used by members of the value chain when producing their computers (Aldrich 1999, 111). The information that Dell obtains does not have value on its own, but there is value potential in it. For example, if the information can be used for non-Dell products, it would have fiscal value outside of the company (Aldrich 1999, 111).

By organizing their information, Dell could market it as a separate business entity. The drawback to this, of course, would be a loss of strategic advantage it has over competitors. But Aldrich (1999) asserts that this financial setback would not be nearly as detrimental to halt profits over the newfound product.

Gibson and Jackson (1987) note that many companies like Dell have access to a large amount of information, but do not use, whether through choice or an incapability to do such. They point out that using information, or selling it as a commodity is not always easy (Gibson and Jackson 1987, 5). They assert that, "Thanks largely to the information technology revolution, executives are swamped with information from both inside and outside the business. The way to survive the information technology revolution is not to drown (die of thirst) but to manage information in an aggressive way, using it to reshape the business so that it can compete in today's complex arena" (Gibson and Jackson 1987, 6).

This advice could prove to be very beneficial to Dell. In some ways, the release of this information could assist Dell. Aldrich (1999) notes that, "Dell could use this information to tell suppliers which component combinations were most attractive to customers. This intelligent service would vastly increase the value of the information collected by Dell" (112).

This kind of "infomediatary" service would not only strengthen the companies' pocketbooks, but would also increase the Dell brand name (Aldrich 1999, 112).

Aldrich (1999) gives nine recommendations for a conversion to the new digital economy, and an ultimate conversion to a digital value chain. Firstly, he emphasizes the importance of the company staying in touch with the growing, networked community. Word about products can spread rapidly across digital and internet mediums, and company representatives need to be monitoring these threads at all time, always staying in touch with the sentiments of their customers.

Secondly, companies need to construct initiatives with clear understanding of how they impact the value offered to customers. As we saw with the Encarta/Britannica example, the value of products in this new era is constantly changing. Unlike the traditional value networks, the digital value network will never allow a product or service to remain a constant value for too long. Values are constantly changing with the new technologies and more efficient ways of employing, and as a result, organizations need to be constantly evaluating the value of their product or service, and how it compares to the competitions.

Thirdly, if and when an organization decides to build its own network community, it needs to be done as fast as possible (Aldrich 1999, 113). Aldrich (1999) points out the example of a fax machine. He says that when one fax machine was owned, it was essentially worthless. An individual or company could only fax to themselves. But as the ownership of fax machines proliferated, so did the value of that individual fax machine, and the value of the network as a whole. Not before long, an entire new means of communication was establish. Aldrich (1999) says this same dynamic holds true with new, digital networks. The faster they are created, the more useful and valuable they become (113).

The emphasis on speed in a digital economy relates back to Gibson and Jackson's (1987) "information imperative." They say that business must be constantly progressing in order to survive. Speed is incredibly important because the conversion to a digital economy is being undertaken by all of a company's competitors (Gibson and Jackson 1987, 6). They assert, "American business and industry must take action. They cannot do nothing and survive; they must change to respond to a more competitive environment" (Gibson and Jackson 1987, 6).

The fourth recommendation is align one's company with others that are similarly taking advantage of the digital economy (Aldrich 1999, 113). These alliances only serve to proliferate one's digital capabilities and sharing of knowledge. In a sense, a company can double or even triple its knowledge management and collection capabilities by joining these alliances, and the best part about it is they do not have to independently invest in more equipment and technologies.

The fifth recommendation is to "flaunt" your network community. A valuable network community will make your company attractive to others, and increase the chances of joining lucrative alliances (Aldrich 1999, 113). A valuable network community is also very attractive to customers and investors. In this same respect, a company should not act "self-centered." Willingness to share knowledge and capabilities is necessary to attract alliances, and usually this sharing of knowledge is beneficial to all those involved, even if it serves to strengthen potential competitors (Aldrich 1999, 113).

Fifthly, the network must be user-friendly. In the digital world, things are becoming much more complicated. People are constantly faced with new programs and directions, and it is often hard for them to rationalize the new from the old. It is essential that knowledge management be easily accessed and organized. This will serve as another attraction to one's company (Aldrich 1999, 113).

Aldrich's (1999) next recommendation is to be sure not to neglect the customer service aspect of the knowledge management (113). Good customer services increase the trust between customers, investors, and potential alliance companies. Also important is the network's security. As previously mentioned, knowledge can be very valuable, and attractive to computer hackers. The ability to tap into networks is progressing at the same rate that security measures are, so it is important to spare no expense in closely monitoring the networks databases and users (Aldrich 1999, 113).

The eighth recommendation that Aldrich (1999) makes is that companies must use their networks as a way of advertising. Incorporating one's product name with the network can increase familiarity of the company's products, and possible result in increased sales (Aldrich 1999, 113).

The ninth recommendation is simply to "think big" (Aldrich 1999, 113). Aldrich (1999) stresses that organizations pursuing these new digital networks can not limit their capabilities. In this ever-globalizing world, one must consider the possibility of their company reaching all parts of the world. For this reason, networks need to be created with unlimited growth potential. As we have witnessed with the internet and the new digital capabilities, the growth of these technologies is exponential. The same holds true with networks. They have the potential to skyrocket in capability (Aldrich 1999, 113).

Finally, Aldrich (1999) insists that companies experiment with their digital networks (113). This is not to say they need to take costly risks, but rather calculated ones. New technologies will enhance the capabilities of these networks just as fast as they proliferate. Companies operating these networks need to be willing to employ these new technologies in an effort to add innovation and efficiency to the existing networks (Aldrich 1999, 113).

Along with these recommendations, Aldrich (1999) points out four major obstacles of reaching this new digital knowledge management. Firstly, he emphasizes that extremely large, streamlined organizations will not be as successful in the digital conversion. He points to the megamergers, such as Mobil-Exxon, Bell-Atlantic, and Citicorp-Travelers. He says, "we believe these aggregated organizations will have even less entrepreneurial capability to respond to changing markets that the formerly separate companies would have had. These deals were struck with a misunderstanding of the new forces in the digital economy. Mergers and acquisition will undoubtedly continue as companies strive for the apparent benefits consolidation seems to offer. However, the resulting megacorporations will eventually fail if they do nothing to strengthen their core capabilities" (Aldrich 1999, 188).

Another obstacle is what Aldrich (1999) calls, "operational inertia" (190). He refers to it as, "the intangible force in the conscious and subconscious mind that says that things are fine the way they are; so don't make any big changes" (190). He proceeds by saying this mentality is extremely detrimental to an expanding digital economy. Aldrich (1999) says, "All companies must reinvent themselves from time to time, some more often than others" (190).

This outlook, he asserts, even applies to companies that are doing well and prospering. As previously mentioned, the digital economy facilitates rapid growth and decline of companies. A small company could have an idea that in a matter of months turns into a million-dollar service or product, and just the same, a large company (i.e. Britannica) could be the victim of an idea.

For this reason, companies need to never settle for the status quo. An excerpt from the website Brint.com puts it the best, "The emergence of new digital technologies and knowledge management systems means that the relative success and failure of companies today are bordering a thin line. In contrast, high levels of uncertainty and inability to predict the future characterize the 'new world of business'. Use of the information and control systems and compliance with pre- defined goals, objectives and best practices may not necessarily achieve long-term organizational competence. This is the world of 're-everything,' which challenges the assumptions underlying the 'accepted way of doing things.' This world needs the capability to understand the problems afresh given the changing environmental conditions. The focus is not only on finding the right answers but also on finding the right questions. This world is contrasted from the 'old world' by its emphasis on 'doing the right thing' rather than 'doing things right" (Brint.com).