## Archive for November, 2011

Posted at 6:57 pm in Uncategorized

In my continuingÂ pursuitÂ (albeit with a slow down of blog posts) I have settled on a book that has me enthralled. It isÂ The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future by Bruce Bueno de Mesquita. Featured in an article I read some time in the summer he has been using Game Theory to predict political changes for twenty five years. Most of us have heard to typical GT example of the Prisoner’s Dilemma, but Mesquita goes much further and opens the concept of Game Theory wide open way before He delves into the maths.

His opening example is on reversing the ‘game’ we play when we go to buy a car. When you sit in front of a salesperson in a car showroom they are holding all the cars, at the end of the deal they ask you how much you want to pay – which might require the salesperson to ‘go and check with the manager’ and you might think you are getting a good deal. Mesquita’s plan is about reversing the power in the game, which he, his family and his students use when buying a (new) car. First you research the car, its average value and be very specific about which model you want and what extras you want with it. Then the fun begins; call up every dealer with that car and starting with the first one you say… ‘At 5pm today i will be buying [the car], I am calling every dealer in the area and whoever gives me the cheapest price will get the check.’ Some dealers refuse to ‘play’ but most go with it, it changes the situation and requires the dealers to do what is in their own interest – offer the cheapest price without knowing what they are offering it against. A blind auction if you will, but with the essential ingredient of game theory at the centre; everyone acts in their own best interest.

Swirling around in my mind with all this my recently gained knowledge and some understanding of Actor Network Theory, also (of course) are the constant swirling thoughts of data visualisation. I am off to play with Processing and some XML stuff, having decided that Logic will be the subject of my next, imminent post.

Written by pmb1g11 on November 20th, 2011

Posted at 4:18 pm in Sociology

Sociology is âthe systematic,Â scepticalÂ and critical study of the social. It studies the way people do things together.â There are many different perspectives and it encompasses the widest global issues right down to the individual and their inner world.

Methodology

Although sociology is also a social science similar to my other subject choice of economics they work in different ways. Economics uses data to predict future spending etc, but sociologists are researchers and theorists. There is a degree of overlap, but the range of sociology is much wider and so sociology methods are more varied. Researchers find data, from experiments or data from everyday life (such as population statistics or Census data), and use is to draw conclusions about the world and society, Theorists go further and want to understand how this data fits into âthe grand scheme of thingsâ and want deeper understanding of what is going on. Data alone cannot speak for itself and a wider understanding is necessary to gain real insight from the data. Theorists in sociology develop these wider ideas and help develop theoretical explanations for the data and how it fits in the world.

Although there can be some problems with the way sociology is studied. Firstly they are part of a changing world, one finding may be true one day, but not the next. Secondly, sociologists are part of society so it is difficult to remove oneself from what you are studying. Lastly, sociology knowledge becomes parts of society as it is known and therefore changes society. This cycle of knowledge has an impact of society itself.

Origins of Sociology

The Enlightenment caused a change in society. There was a move to rational thinking, empiricism and science and there was more focus on the individual.

Auguste Comte wanted to understand the âhuman dramaâ of his time. He believed that if people had the knowledge of how society operates they would be able to build a better future. He divided his new discipline into two parts: how society is held together; and how society changes. From the Latin âto study societyâ Comte descried his study as sociology.

Previous to Comte philosophers had been imagining the ideal society, not measuring and analysing society as it was. Comte wanted to develop a scientific approach to study society, thus he was proponent of Positism â to understand the world based on science.

Society is always changing and there have been many great leaps in society and how we look at it, for example during the Industrial revolutions. However, there is a more recent change that is of current interest to my research question: The Cyber Revolution. The Cyber Revolution is linked to the development of digital technology and the spread of information technologies that affect how we communicate and how it has become mainstream. The World Wide Web is a great example of this, launching recently in 1991 it is already embedded in all of our lives and is considered an international technology. This changes surrounding this digital age is a rapid change with large effects on society. The textbook tries to break down these changes:

The Digital Age: The shift of computerisation of life. The way there are computers is most everyday things.

The Cyborg Age: The way humans are becoming more adapted to using these technologies.

The Information Age: The rapid growth of production and availability of information and data.

The Network Society: The change in the way we are networked together through mobile phone and the internet.

The Virtual Age: The mediated nature of reality. We live in a world that is increasingly less direct and instead of face-to-face we communicate through computers and phones.

Another large aspect of sociology is that there are different theoretical perspectives of looking at things which guides thinking and research. Below is a simplified map of Western sociological theory, 1700-2000.

Functionalism

âFunctionalism is a framework for building theory that sees society as a complex system those parts work together and interconnect.â This perspective looks as social structure (finding stable patterns of human behaviour) and social function (all social structures have a function in society, either it be a handshake of family life). Merton also speaks of social dysfunctions, which cover any social patterns that have undesirable consequences for the operation of society. The critique for this perspective is that although this perspective was dominant until recently it presumes that society is stable and orderly. It also does not take into consideration inequality, such as class/gender/ethnicity issues.

Conflict perspective

âThe conflict perspective is a framework for building theory that sees society as an arena of differences and inequalities that generate conflict and change.â This perspective complements Functionalism as it focuses on division and inequality. The critique of this perspective is basically the opposite of the Functionalism critique. The Conflict perspective glosses over the shared values and interdependence in society and focuses on the conflict and inequality. Both the Conflict and the Functionalist perspectives could also be criticised for being too broad and glossing over the smaller factors that make differences in society such as family and class.

Social action perspective

Contrary to the broad views of society seen in both Functionalist and Conflict perspective, the Social action perspective focuses on the smaller factors. One founder of social action theory is Max Weber who emphasised looking at a setting from the point of view of the people in it. His approach emphasised how human meaning and action shape society. A critique for this perspective is that this perspective helps us understand how people experience society and how they do things together. But by focusing on these smaller details broader social structures may be missed.

There are also contemporary perspectives such as feminism (looking as gender difference), Anti-racism (looking at race differences), postmodernism (looking at differences and complexities) and globalisation (looking at the larger world and how societies fit in it). The next post will further explore globalisation because I believe it is an important in relation to my research question. The globalisation of industry and society may lend some answers to why independent music can survive if the music industry has been made global.

Information and graphs summarised from:

Macionis, J.J. & Plummer, K. (2008).Â Sociology. A global introduction. Essex, England: Pearson Education Limited.

Written by Gemma Fitzsimmons on November 20th, 2011

Tagged with , , ,

## 05 â Information Systemsno comments

Posted at 1:29 pm in Uncategorized

# Information Systems

O’brien (2007) defines an Information system (IS) as any kind of organized combination of people, hardware, software, communications network, data resources, and policies and procedures that stores,Â retrieves, transforms, and disseminates information in an organization.

## The Framework.

There are 5 main areas that build the framework for the information systems. Â All theseÂ elements play an important role in the process of building the research project.

### Foundation Concepts

To develop an information system, it is important to understand the behavioral, technical, business and managerial elements in order to develop the components for the Information System.

### Information Technologies

In this area we will focus on the hardware, software, networks and data management that will affect the project in regard of its development, concept development and management.

Concepts like e-commerce can influence or provide ways of how the management can be implemented in an Information System like the one required for the Museum application.

### Developments Processes

This will be focusing on the planning, development and implementation of the system(s) to meet the requirements of the problem or situation.

### Management Challenges

Through this process, we will focus on delivering and managing effectively the information technologies at the end-user, business or int this case a multiuser/global institution.

## Inside Management Systems

There are several types of Information Systems. They are usually classified into two different groups: Operations Support Systems and Management Support Systems.

Operation Support Systems:

• Specialized Processing Systems
• Transaction Processing Systems
• Process Control Systems
• Enterprise Collaboration Systems

Management Support Systems:

• Management Information Systems
• Decision Support Systems
• Executive Information Systems
• Specialized Processing Systems

There are five major resources focusing on the relationship with the IS and the products (O’brien, 2007)

• People Resources
• Specialists – software developers or system operators
• End Users – the person who uses the IS
• Hardware Resources
• Machines – computers, monitors, drives, printers or scanners
• Media – Storage, disks or paper forms
• Software Resources
• Programs – operating systems, editors or payroll applications
• Procedures – data entry procedures, error correction, paycheck distribution procedures
• Data Resources
• Communication media, communication processors, network access, control software
• Information Products
• Management reports, business visual display and paper forms

All these elements and areas can help us to visualize the complexity of the development of an Information System. We need to know what do we want from the organisation (system) to do? AnÂ organisationÂ that includes people is more complex to manage than one that doesn’t (Wilson, 2001). For this, it is important to analyse the system implemented. Â Users or a human response will vary which will vary the judgement of the system.

To avoid judging problems we have to follow a specificÂ methodology. Â We have to define a problem first of all. From here we can start gathering the appropriate techniques to solve this problem. The implementation or application of these techniques will allow us to go to the next step if effective or back to the previous one if unsuccessful. We also have to analyse the cost/effective solution. Â After these steps we can finally implement the solution.

So we have to solve a problem. But, who is defining the problem. What seems to be problematic for one person can not appar to be so for another one. Wilson (2001) explains that instead of focusing on a person’s problem or a problem, we have to focus on defining a situation that is problematic. I believe this will help the project not to isolate on a single person’s perspective.

## Bibliography

O’BRIEN, J. A. & MARAKAS, G. M. 2007. Introduction to information systems, Boston, Mass., McGraw-Hill.

WILSON, B. B. 2001. Soft systems methodology conceptual model building and its contribution, Chichester ;, Wiley,.

Written by Javier Pereda on November 20th, 2011

## Sociology for Dummies (1)no comments

Posted at 12:28 pm in Sociology

The main reference for this blog post is Sociology A global Introduction 5th edition (2012) by John MacionisÂ Â Â and Ken Plummer.Â

Macionis is a professor of sociology and a Prentice Hall distinguished scholar and works at Kenyon College in Ohio and is considered one of the most prestigious liberal arts colleges in the U.S.Â  Professor Ken Plummer works at the University of Essex.

Sociology is the study of the forces of social integration and how they change in space and time.Â  According to Macionis and Plummer sociology is

âthe systematic, sceptical and critical study of the social.â

So it challenges preconceived ideas about the world like any decent science but what is the social?Â  For example we mostly think of ourselves as individuals who make our own decisions whereas many sociologists, such as Durkheim (1858-1917), believe that many of the decisions we make are contingent on social factors.Â  Â Durkenheim noticed a correlation between the less socially integrated (single people, men, the rich) and higher suicide rates. Â He argued that people would have made different decisions had they been born a different gender, social class, in another time or another space.Â  Â

Sociologists are interested in the way that different groups (ages, gender, racial etc.) are affected by society as a whole.Â  In particular, the definition of gender or age or race differs depending on location in space and time.Â  For example in the Victorian era in Britain, women were expected to dress much more conservatively than they are today.Â  Maconis and Plummer sum this up succinctly,

âAt the broadest level, sociology sets out to show the patterns and processes by which society shapes what we do.â

I think that the word âshowâ here is very important, it deftly avoids the question, as a sociologist, am I required changing the world or just observe it?Â  Or are critical observations enough to change it?

Methodology

Sociologists claim some statement and then build up an argument which supports this statement.Â  To build an effective argument sociologists use a variety of methods such as case studies, statistical analysis, questionnaires and interviews.Â  For example Durkenheim (above) used statistics to back up his claim that individual decisions are often not that individual and are contingent upon society

Written by dm1x07 on November 20th, 2011

## The Cognitive Miser and the webno comments

Posted at 8:09 am in Psychology

The cognitive miser model of social perception views people as using as little processing capacity as possible and relying on assumptions and expectations. The set of assumptions and expectations about something, e.g. people who are heavily tattooed, is sometimes called a schema. I think we all know there is a lot to this, but it does overstate the case and recent research in social psychology (Ruscher at al, 2000) has stressed the importance of motivation in determining the extent to which we are cognitive misers.

This is a vital concept if we are to understand how people will react to information we provide via the web. We have to be wary of using our schema and our own motivations to interpret what we see and try to understand the likely schema and motivations of potential audiences. If we provide information on MMR and autism then it is not sufficient to give people the facts. We need to understand who the target audience is and âwhere they are coming fromâ. Very likely we have to provide the motivation to stop them relying on prior schema and become less like cognitive misers.

The web as a medium can be seen as both a challenge and an opportunity in this respect. The âcues-filtered outâ model implies that we may have less opportunity to understand the schema of our audience and motivate them. On the other hand, unlike say television, the web does give the opportunity to interact and customise the way information is presented. So at least there is the potential to address a large audience in a customised way.

Written by mtf1c08 on November 18th, 2011

## Social Psychology – the second disciplineno comments

Posted at 12:47 pm in Psychology

After much havering I have settled on Social Psychology as my second discipline (which is where I started).Â  One important reason is that Gemma has lent me a really good textbook!Â  Also it is extremely relevant.Â  I contemplated Film Studies and Ecology because I wanted to try something out of the ordinary – but Film Studies turns out to be a bit of a non-subject and Ecology (although fascinating) was just too hard to relate to my research question.

Social Psychology seems to resonate in all sorts of ways.

I am primarily interested in scientists public engagement with science and over the last couple of weeks this has become a bit more precise – how can the scientific community use the web to help non-experts distinguish good science from non-science.

Social psychology hits because:

1) Subject matter – it studies (among other things) how people form opinions and attitudes and how they communicate

2) Methodology – social psychology combines qualitative and quantitative methods in a way I find convincing.Â  In particular it recognises the primacy of the experiment as a method and thatÂ  with only qualitative data you have ideas but not evidence.

3) It is an example – it is itself a science which needs undertake public engagement and differentiate science from non-science.Â  In fact it is more prone than most sciences to misinterpretation.

So Social Psychology here we go.

Written by mtf1c08 on November 17th, 2011

## Marketing Lessons for the Webno comments

Posted at 12:36 pm in Uncategorized

I have been reading a marketing introduction (Armstrong, Kotler, Harker, & Brennan, 2009) which certainly makes for much easier reading than academic papers. These are initial notes on how marketing might throws light on the user of the web for public engagement with science.
Marketing as a discipline:
â˘ Marketing is primarily prescriptive not descriptive. The book tells or advises people on how to do it.
â˘ The evidence to back up the advice is almost entirely based on case studies. In this sense it does not come close to the rigour of a science or even the social sciences.
Marketing, public engagement with science, and the web
â˘ Clearly marketing uses the web â digital marketing is a new and important branch of marketing â but the web can also use marketing. To be more precise people using the web can benefit from marketing concepts and attitudes.
â˘ Most importantly marketing has at its heart âcreating and maintaining profitable long term customer relationshipsâ. The concepts of customer and profitable need to be expanded (you might even say twisted) beyond their normal meaning if they are to apply generally to the web â âcustomerâ translates into âuserâ and âprofitableâ translates into something like âsatisfactoryâ. Taking into account this translation, this is a mind-set that ought to pervade anyone trying to offer services via the web and therefore the underlying technology and standards. The big success stories Apple, Google, Facebook and Amazon are very much aware of this (Amazon is the first case study in the book). Other institutions less so. In particular scientists typically do not see the consumers of their product (research) as customers or users.
â˘ On page 12 the book describes five different marketing orientations:
o The production concept â focuses on producing and distributing my goods and service as efficiently as possible. The vast majority of scientists see the web in this light. What an efficient way to make research available.
o The product concept â focuses on quality and innovation. Some scientists, to their credit, see the web in this light. It gives an opportunity to demonstrate or present their discoveries in imaginative or exciting ways. Science museums are particularly adept at this.
o The Selling concept â partially shifts the focus from the product to the customer – getting customers to buy the product or service – but concentrates on the short term and looks for a customer to match the product rather the reverse. Scientists probably come closest to this attitude at conferences or other events when personally presenting their research, it is hard to see its equivalent on the web. This is partly because there is no well-defined transaction to record success as there is when a commercial organisation makes a sale.
o The Marketing concept â this completes the shift to customer focus. The organisation defines itself in terms of customer needs that it has the potential to satisfy â the products and services are responses to these needs. The best way to identify and meet these needs is to develop long term relationships. This is an approach that is alien to most scientists and is likely to cause a negative response. Science should be pure and about discovering how the world is â not about meeting needs. The idea that the web would be vehicle for creating long term relationships with customers to meet their needs would be very hard to take.
o The Social Marketing concept â this goes one further than the marketing concept and takes into account not only potential customers but also social forces such as environmental considerations. Scientists are better disposed to respond to this attitude than a pure marketing approach â climate change is the obvious example. Nevertheless there is a still a presumption that society should respond to their science and the web is a tool for doing this â rather than a tool for building relationships and understanding the usersâ needs and viewpoints.

Written by mtf1c08 on November 17th, 2011

## 04 â IT Modelling / Reporting Experiments (Statistics)no comments

Posted at 11:26 am in Uncategorized

# Hypothesis and Experimentation

## The scientific method

TheÂ hypothetico-deductive aspect of the scientific method focuses on the observation. Â This observation leads to a guess or logical guess called the hypothesis that tries to explain how a system works. Â From there, some predictions are made from this hypothesis and the experimentation or tests begin to try to prove it.

After the experimentation, the results can only be either consistent or inconsistent with the hypothesis.

These sets of experimentation will allow the hypothesis to be more consistent with the implementation of the project. Â But it is important to link the results properly with the hypothesis. Â This is where the statistics come in.

## Statistics

Statistics are use in many different industries. Statistics will allow us to make decisions about large numbers of subjects which we can be able to group into some sort of systems. Â This way we can see patterns or data that is not visible through ‘static’ numbers.

It is extremely important to understand how statistics work. Â This is due to the necessity to analyse the information inside them. Â If we can not produce a proper statistical model, perhaps we won’t be able to make a good decision about our project. Also, if we can not understand statistics, there is no way we can see errors or disprove a theory or result.

### Graphs

Once we have developed the statistical models we also have the option of visualizing this data. Or perhaps analyzing more in depth the information provided.

Mean, Error, Percent Error, and Percent Deviation

All these arithmetical/statistical tools can help us to understand our data. Â For example the Percent Deviation will allow us to understand or to see the whole extent of the data, not only the mean number.

Ď =
 âd2 n-1

Percent Deviation

All statistical models are methods of obtaining theÂ probability of success of our experiments which will help making a decision about our hypothesis or group analysis

## Reporting Experiments

Through the report is where the explanation about the study. Peter Harris (2008) points 5 elemental items for the report.

• What you did
• Why you did it
• How you did it
• What do you think it shows

This can then be translated to a formal document presentation like this:

• Title
• Abstract
• Introduction
• Method
• Results
• Discussion
• References
• Appendices

So, through this report we are intended to provide the information and theÂ appropriateÂ material. For this we also have to consider our reader. Â Who is intended to see our information. This is important because perhaps we will have to give an introduction to our area of study. If we are presenting the document to Computer Scientists, perhaps we need to give and induction to Heritage or Visual Communication.

## Within museums

The statistics and the report provided is also an intrinsic part of the analysis. Before even starting to provide model experimentation, it is important to provide a hypothesis. Â Something like:

• What are the main reasons why small museums don’t have access to big collections?
• How many visitors does each museum have per year/per day/per month?
• How many times does an expensive collection travel through different museums?

It is important to start analyzing this type of information in order to visualize the real requirements not only of the project but also of the museum. problem or situation.

### Bibliography

Brookshear, J. G. (2010). Computer science an overview. (11th ed.). Addison-Wesley,.

Harris, P. (Peter R. ). (2008). Designing and reporting experiments in psychology (3rd ed., p. 284). MaidenheadâŻ:: Open University Press,

McKillup, S. (2006). Statistics explained an introductory guide for life sciences (p. 267). CambridgeâŻ:: Cambridge University Press

Written by Javier Pereda on November 17th, 2011

Posted at 1:45 pm in Sociology

In my first blog post called Self and business in social networks, I was refering to the concept of self and fourÂ methods through wichÂ self-consciousness is achieved.Â In his first trilogy volume called The Rise of the Network Society, in theÂ chapter Prologue: theÂ Net and the Self, Castells explains that the first step in an informational society is the organizationÂ  by recognition of itself based on cultural attributes. This was the fourth method of self identification described in my post: 4. cultural perspectives – depending on the origin of the individual. In the second volume The Power of Identity, Castells defines identity as a source for the meaning and experience, distinguishing between three forms and origins of identity building:

1. Legimitizing identity – introduced by dominant institutions e.g. nationalism
2. Resistance identity – generated by the dominated minorities opposed to the institutions of the society
3. Project identity – based on some cultural values, a new identity is built

e.g. feminism challanging patriarhal family, reproduction, sexuality and personality on which societies have been historially based

e.g. green culture, smart meters, preserving nature

In the final chapter called Conclusion: Social Change in the Network Society, Castells sees the information networks we presented in our previous post as the organizers of activity and sharing information, as producers and distributors of cultural codes.

I see a similarity between Castells’s forms of building identities and Nietzsche’sÂ history types:

1. Monumental history – study of nation’s heroes conducted in order to invoke them in all their greatness [1]
2. Antiquarian history – local history of specific social and civic communities [2],Â Â history as consolation and reassurance, as the positive continuity that provides a people with its identity [1]
3. Critical history – the sort of history one utilizes when the monumental structures fail to inspire and when antiquarian musings become mired in unproductive thoughts and a conservative motionlessness [2]

WikipediaÂ differentiates identityÂ as personal and social, where social identityÂ is defined as aÂ Â person’s conception and expression of their individuality or group affiliations Â (such as national identity and cultural identity).

In our next post we will look into Castell‘sÂ lastÂ trilogy volume End of Millennium.

### References

[1] F. Nietzsche, Untimely meditations

Written by ad4g11 on November 16th, 2011

Posted at 10:24 pm in Economics

This week I turn to my second discipline, economics, as a basis for considering a different slant on my research question (how the Web changes competition between businesses). While having some degree of economics knowledge in my background, I have approached the subject area afresh in a systematic fashion with guidance from a book looking at economics for businesses (Sloman, Hinde and Garratt 2010).

My starting position is to look at the essence of economics: how to get the best outcome from limited resources. In other words, economics tackles the problem of scarcity which is a central problem faced by all individuals and societies. Demand and supply and the relationship between them are central to this analysis. Also key is the concept of choice (known as âopportunity costâ): the sacrifice of alternatives in the production or consumption of products or services.

Economics is traditionally divided into two main branches: macroeconomics and microeconomics. Macroeconomics examines the economy as a whole at a national or indeed international level (i.e. aggregate demand and supply), whereas microeconomics examines the individual parts of the economy. The latter includes all the economic factors that are specific to a particular firm operating in its own particular market. As microeconomics explores issues surrounding competition between firms, and due to limits in time, I will not be looking at macroeconomics in any detail (other than indirectly via a general awareness of the factors that affect economies as a whole, which in turn affect individual firms as an important determinant of their profitability).

From a microeconomics perspective, the choices made by firms are studied alongside their results. Such choices include how much to produce, what price to charge, how many inputs to use, what types of inputs to use and in what combinations, how much to invest etc. Making such choices involve rationality in weighing up the marginal benefits versus the marginal costs of each activity to best meet the objectives of the firm.

It is worth pausing at that point to make a comparison between the relevance of economics to business decision-making and the contents of my previous blog posts on management studyâs approach to business activities and competition between firms. Both use similar terminology and look to the structure of industry and its importance in determining firmsâ behavior. They also both look at ranges of factors that affect business decisions and consider the wider environment in which firms operate (including conditions of competition in relevant markets) in helping to devise appropriate business strategies. For example, Sloman, Hinde and Garratt also refer to how the pace of technological change has had a huge impact on how firms produce products and organize their businesses, together with a âPESTâ â political, economic, social and technological â analysis (compare my previous blog entry âManagement 102â).

Where economics (more specifically, we can call it âbusiness economicsâ) differs from management is its focus on how firms can respond to demand and supply issues. In other words, its emphasis is more on internal decisions of firms related to achieving rationally efficient outcomes and the effects of such decision-making on a firmâs rivals, its customers and the wider public.

In keeping with the theme of efficiency, economics has traditionally considered that business performance should be measured against a structure-conduct-performance (structure affecting conduct affecting performance) paradigm measured by several different indicators. Performance is also determined by a wide range of internal factors and external factors other than just market structure, such as business organization, the aims of owners and managers.

In returning to the theme of how economics differs from management/business studies, economists have traditionally paid little attention to the ways in which firms operate and to the different roles they might take. Firms were often seen merely as organizations for producing output and employing inputs in response to market forces. In other words, virtually no attention was paid to how firm organization and how different forms of organization would influence their behavior. This position has changed as economist interest in firmsâ roles with respect to resource allocation and production (and how their internal organization affects their decisions) has increased.

Economists have also conventionally assumed that firms will want to maximize profits. The traditional theory of the firm shows how much output firms should produce and at what price, in order to make as much profit as possible. While it may be reasonable to assume that the owners of firms will want to maximize profits, it is the management (as separate from the shareholders) that normally takes decisions about how much to produce and at what price. Management may be assumed to maximize their own interests, which may conflict with profit maximization by the firm. In summary, the divorce of ownership from control implies that the objectives of owners and managers may diverge and hence the goals of firms may be diverse.

In their introductory section on business and economics, Sloman, Hinde and Garratt include an interesting case study on the changing nature of business in those countries where economies are knowledge driven and innovation is therefore central to business success. They include a quote from a European Commission publication (Innovation Management and the Knowledge-Driven Economy, 2004) on this point:

âWith this growth in importance, organisations large and small have begun to re-evaluate their products, their services, even their corporate culture in the attempt to maintain their competitiveness in the global markets of today. The more forward-thinking companies have recognised that only through such root and branch reform can they hope to survive in the face of increasing competition.â

Thus, it is suggested that the dynamics of knowledge economies require a fundamental change in the nature of business. This is an interesting comment in considering the impact of the Web on competition from an economical viewpoint. Knowledge is fundamental to economic success in many industries. The result is a market in knowledge, with knowledge diffusing and cutting across industry boundaries. Another result is the increasing outsourcing of various stages of production and collaborations across industries. Furthermore, whereas in the past businesses controlled information, today access to information via sources such as the Web means that power is shifting towards consumers.

Next week I will turn to the concept of markets from an economic viewpoint and how competition is assessed via the theory of the market.

Written by amk1g10 on November 14th, 2011