Information and Uncertainty

Abstract

Today, there is much speculation about the formidable opportunities and challenges presented by new communication technology. The internet is expected to cause national markets to become integrated into a global arena by lowering the cost and enhancing the speed of making transactions. At the same time, the ‘boundary units’ shown in Figure 1.4 are confronting a growing flood of information about environmental conditions. The need to process this data and make it accessible to decision-makers is compelling firms to invest in ‘knowledge-management’ systems and ‘intranets’. Moreover, the internet is spawning ‘virtual firms’ run by a core of entrepreneurial specialists linked by e-mail to knowledge workers who contract to perform specific tasks. What these unfolding trends reveal is that changes in communication technology have a direct impact on the institutional arrangements included in Figure 1.2. Simultaneously, they enlarge markets, increase the span of corporate control, and encourage the proliferation of cooperative structures.