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With a background in international relations, I came to Web Science with an initial interest in communication and communication technologies, and how those impact on post-conflict reconstruction and development efforts. At the time I came to identify this interest I was working for a Social Brand consultancy, helping organisations to recognise the transformational effect of social media on businesses and how to adapt to it. My first project there was to develop a ranking of Social Brands, the Social Brands 100. So while everyone around me seemed to be raving about the power of the Web and social media, I started thinking of those who don’t have access to it.

On 11 March 2011, coincidentally the launch day of the Social Brands 100, an earthquake struck Japan with devastating consequences. During the earthquake and in its aftermath, my Japanese friend was stuck in her office building for a few days, regularly posting Facebook updates to reassure friends and family that she was alright.

The possibilities for using social media in times of crisis seemed great. There were already forays into the idea with platforms like Ushahidi  which enables crowdsourcing of information during crises via various channels (another 2011 Social Brands 100 nominee!)… But all this got me thinking that those whom such platforms or ideas could help the most were often those without access to the Internet of the Web.

Now the purpose of this assignment is to focus on particular disciplines and the approach each would take to evaluate the issue rather than on the issue itself, but we still need to define what we will look at through the disciplinary lenses. I have chosen to examine the disciplines of management and anthropology, and over the course of the next few weeks will attempt to get an idea of their epistemologies and ontologies, the basic theories that underpin them and see whether it is helpful or beneficial to combine them to understand some of the issues around the digital divide. For Chen and Wellman (2004, p. 40) ‘the digital divide involves the gap between individuals (and societies) that have the resources to participate in the information era and those that do not’. It is a complex problem characterised by wide ranging aspects – socioeconomic, technological, linguistic factors, social status, gender, life stage and geography (Chen and Wellman 2004, pp. 39-42). Going into too much detail at this stage is not necessary, as the relevant issues to be examined will be framed through each discipline, but it provides a useful starting point.

So next week I will start with Thomas Hylland Eriksen’s Small Places, Large Issues: An Introduction to Social and Cultural Anthropology (3^rd Edition) Pluto Press, for Anthropology and for management, David Boddy’s (2008) Management: An Introduction, 4th ed., Prentice Hall.

Reference

Chen, W. and Wellman, B. (2004) ‘The Global Digital Divide – Within and Between countries’ in IT & Society Vol.1(7), pp. 39-42.

Shop shelves loaded with specially packaged items signal the advent of Christmas in mid October. What do we become involved in at Christmas? What is the meaning of our engagement? What are we doing in group behavioral terms? How is giving at the heart of what we do? The academic discipline which can give us significant answers is not Philosophy or Theology or consumer research within the study of Marketing

What helps us understand our gift-giving tradition is Anthropology. It studies group behaviours in communities and has an extensive body of theory derived from ranging fieldwork across the globe in the 19th, 20th and 21st centuries. An important base of theory is focused on systems of exchange and their significance. The sociologist-anthropologist Marcel Mauss analyses gift-giving systems in his work An essay on the gift: the form and reason of exchange in archaic societies¹. He demonstrates that early exchange systems are based on reciprocity in order to build social connections between groups. A classic example of reciprocity is the exchange of sisters in marriage that took place in e.g. the Bambuti society in the Congo. Or another, the Kula ceremonial exchange system in the Trobiand Islands which created social cohesion and was distinctly different from their commodity exchange approach.

Now the web science question which is begged is can we apply these theories to online user behaviors outside of the Christmas context? What is happening in the online communities within and around internet services deploying the Free business models coined and analysed by Chris Addison²? Is there evidence of the classic anthropological gift-giving system between users and entrepreneurs?

Find out more in my next instalment!

It’s great that people are becoming more aware of these problems:

http://youtu.be/VOMWzjrRiBg

Have just been reading up on the Digital Economy Act, and its various ramifications. I have created a scribble that seems to me to show one of the key points – that only jumped out at me as I was doodling – that once again, the web has made Januses of us. I think that most of us are both copyright holders and copyright ‘acquirers.’

And in this case, the ISPs aren’t necessarily bad – if you are a struggling writer, musician or artist then if they are called upon to help you protect what you would think of as yours, you’re not really going to complain. (Speaking as someone whose household gets to buy stuff from royalties coming in from the British Performing Society.) However, most struggling artists, musicians and writers are (perhaps because they’re struggling , perhaps because it’s part of the creative process), also avid ‘collectors’ of what they might not necessarily have paid for… Obviously the issue is far more complex than this.

Certainly BT and TalkTalk have requested the review because of concerns about privacy (n.b. BT and TalkTalk took up a diametrically opposite stance on this very issue when it came down to Phorm and RIPA – perhaps they are now more wary of some of these issues). It certainly brings to the fore the issue of what is property on the web, what is private property on the web, and how far a government should allow intrusion into people’s lives in order to monitor or recover what might be defined as private.

John Stuart Mill wrote:

‘The things once there…mankind, individually or collectively, can do with them as they please. They can place them at the disposal of whomsoever they please, and on whatever terms…Even what a person has produced by his individual toil, unaided by anyone, he cannot keep, unless by the permission of society. Not only can society take it from him, but individuals could and would take it from him, if society…did not…employ and pay people for the purpose of preventing him from being disturbed in his possession..’ (From Heilbroner, p.129).

Mill saw that the principle of private property had not had a fair trial, and that reform could make changes to outdated laws, without recourse to outright revolution. He feared that Communism would stifle individual thinking and feared ‘whether there would be any asylum left for individuality of character; whether public opinion would not be a tyrannical yoke; whether the absolute dependence of each on all, and the surveillance of each by all, would not grind all down into a tame uniformity of thoughts, feelings, and actions…no society in which eccentricity is a matter of reproach can be in a wholesome state.’ (Heilbroner, .p132).

The doodle is JUST a doodle, it’s not good graphic design and it’s very messy.

Economics is a social science or discipline that analyses the production, consumption and distribution of goods and services, or from another perspective, ‘wealth.’ It often asks what is valuable at any one point in time by evaluating the worth of goods and services as they are exchanged. (Drawing on the notion of a point in time, and what we know about the modern capabilities of quantum computing, might suggest that any failure to properly understand where value lies and of what it consists, in immensely complex chains – for example in stock-market deals – could result in hugely disastrous market crashes.) Where this evaluation may be difficult to accomplish (for a number of reasons) this would seem to make economics a normative discipline. Schumacher suggested that its models and theories are based on value systems and embedded views of human nature and referred to meta-economics, as some of these values are not made explicit in the discussion of wealth and its distribution.

Schumacher actually compared two different economic systems in order to illustrate this point: one was the western ‘materialist’ system where the standard of living is measured by the amount of annual consumption – and which therefore seeks to achieve maximum consumption along with optimal patterns of production. The other was a Buddhist economics based on the notion of the ‘right livelihood’ and the ‘middle way’ – aiming for the maximum of human well-being with optimal patterns of consumption.

It is interesting that presently there seems to be more media attention given to research on economic notions of ‘well-being’ and even the search for drivers of happiness.

History:

Economics emerged in and around the 17th century, in line with a value system that differed markedly from those in existence in medieval times. Until then most of what was needed to survive was produced and exchanged locally, within ‘tribes’ or local populations. Robert Heilbroner makes a distinction between markets, where food, materials for building shelter, and clothing might be traded, and ‘the market system’. (The Worldly Philosophers, p.27.) ‘For the market system is not just a means of exchanging goods; it is a mechanism for sustaining and maintaining an entire society.’ Markets existed, and not just for barter, but generally, profit was frowned upon (seen as ungodly) and there were severe restrictions on those who attempted to sell to promote their own self-interest.

There are of course, examples of early traders who did undergo long voyages, (and thus were trading globally) but the suggestion is that these voyages were an end in themselves, and as much about discovery and adventure – ceremonial, bonding and social voyages – rather than for the ultimate motive of profit. A corollary to this might be that these ends are still in existence today (i.e. the bonding of the boardroom, the religious pursuit of profit, Thatcher’s yuppies who took to heart the free market forces and the limitation of the state’s role, and took the role of competitive individualism as their mantra for professional activities.)

In line with the emergence of economics, Beinhocker says, of the period between 1750 and the mid-eighteenth century,

‘According to data compiled by the Berkeley economist, J.Bradford DeLong, it took 12,000 years to inch from the $90 per person hunter-gatherer economy to the roughly $150 per-person economy of the Ancient Greeks in 1000 BC. It wasn’t until 1750 AD, when world gross domestic product (GDP) per person reached around $180 that the figure had finally managed to double from our hunter-gatherer days 15,000 years ago. Then in the mid-eighteenth century something extraordinary happened-world GDP per person increased around 37-fold in an incredibly short 250 years to its current levels of $6,600…’ (p.9).

The evolution of economics:

Earlier it was called political economy, but then it was suggested in the 19th century that ‘economics’ as the short form of economic ‘science’ seemed to suggest a wider scope for the subject.

There are basic contrasts between micro and macro economics – where the micro involves households, individuals and firms and macro looks at ‘entire’ economies and growth, unemployment, fiscal policy, inflation etc.. Normative economics looks at prescriptions – how economics should work, while positive economics looks at describing what occurs. As suggested above, the distinction between these two might not be as clear-cut as one might expect.

There is also economic theory and applied economics, rational and behavioural economics, mainstream and heterodox economics, econometrics (where economic theories are tested empirically, i.e. through observation, as opposed to via controlled experiments) and experimental economics.

Classical political economy

Adam Smith’s The Wealth of Nations described land, labour and capital as the three drivers of production and wealth. He also recognised that the division of labour could create great efficiencies, while perhaps causing problems for the common man whose world view was created by the day to day features of his job.  Smith was the originator of resource allocation theory, suggesting that in a competitive but self-regulating space, resource owners will deploy these most profitably – resulting in an equal rate of return and satisfaction of economic needs of the people. The market was seen as a ‘mechanism’ (note Newtonian tone) acting as an ‘invisible hand’ paradoxically leading people selfishly pursuing their own interests to create social benefit. Self-regulation meant that the market was its own guardian, and didn’t need the interference of government. Prices are kept from ranging away from the cost of production via public demand. The market also encouraged risk, creativity and invention. Smith also referred to two laws: the law of accumulation and the law of population. Via the accumulation of capital society could benefit as money was invested in more machinery and means of production. However, while more machinery would mean more workers, which would in turn mean higher wages that would then dissolve profits – the law of population meant that ‘the demand for men, like that for any other commodity, necessarily regulates the production of men.’

Other early  political economists were Malthus, John Stuart Mill and David Ricardo. Ricardo (writing just after the introduction of the Corn Laws, which practically broke Britain, in order to protect the landowners’ interests) looked at the distribution of income and conflict among landowners, workers, and capitalists. Ricardo saw that resources such as land are limited, and would result in problems emerging from the growth of population and capital, keeping wages and profits down while increasing rents. He grasped that the interests of landowners and capitalists were at odds and that the landowners were at war with the community. This position made Ricardo very popular with industrialists…

At a time when people were starting to question whether nationhood could be linked to population numbers, Malthus saw that human populations tended to increase, outstripping food production. One increase was geometric while the other was arithmetic. He also questioned the idea that a market economy could naturally create employment, suggesting (like Keynes in the 1930s) that savings (Smith’s accumulation) would create unemployment as countermanding spending. Malthus’ views were very unpopular. Malthus’ view was that, ‘Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power of the earth to provide subsistence…that premature death must in some shape or form visit the human race.’

It is of note that (as Beinhocker points out, p.17), while some modern economists generally agree that economics should be studied as a complex system, and others agree that it has much in common with the idea of evolution, it was, of course, Malthus who inspired Darwin’s thinking, and that in fact much of our thinking about evolution derives from early economic ideas on wealth and population.

It is often important to account for the analogies and metaphors inherent in and between disciplines as these can account for some circularities and blind passages that seem to recur. Just as cognitive psychology might have suffered in part from its reductionistic reliance on the ‘brain as computer’ analogy (when the sorts of computers referred to in the analogy were created in order to attempt to replicate just one small part of how our minds work), so it is possible that thinking on economics might have been held back by earlier hesitation about exploring ideas about complex adaptive systems. There have been many works written on this subject: Veblen, Alfred Marshall, Schumpeter and Hayek, Nelson and Winter, for example, but it is generally agreed that mainstream economics has mostly been concerned with the model of economics as a form of self-governing mechanical system.

Although it seems that Smith, Malthus and Ricardo were opposed to one another, in fact it seems that partially where they differed was at the level of focus that they applied their thinking to. However, they saw social systems driven by the search for profit, market roles, a place for government and the force of competition. They also applied their thinking to technology. Smith described in great detail the ways in which pins were made, and how the division of labour and application of technology had their part in this process, but his thinking seemed to focus on a closed technological system. Malthus and Ricardo however were present when technology started to explode upon the scene, as more innovation came in, (the steam engine, the spinning jenny, iron working) it became apparent that with such innovation might come an upset to the ordered mechanisms of self-governing economies.

John Stuart Mill (worth writing about in far more detail) differed from these three thinkers in that he came of a more utopian approach. The social changes that were fostering early economic thinking had produced factories where social conditions were utterly appalling. Worse, because of an insistence on mechanism and natural law, it seemed to some that these appalling conditions were just a natural consequence of the market, and that while there was horror running through the fabric of these workplaces, it was akin to that of ‘nature red in tooth and claw:’ impersonal laws at work with no need for intervention.

Mill, following Robert Owen, Saint-Simon and Fourier, was convinced that a better way could prevail. Rather than encouraging the lower classes to revolt as did the Communists, utopian idealists wished to persuade those who held the power to change their ways, to reform. While the means of production might be functioning according to the laws described by Smith, Malthus and Ricardo, what happened to what was produced was actually down to a number of factors that could be controlled – and was not subject to natural law.

Finishing off my posts on this blog, I conclude with some final thoughts about e-business / e-commerce and the associated challenges faced by businesses in managing innovation and change in the context of the impact of Web/Internet on business competition. These bring together various topic strands from previous weeks.

For completeness sake:
• E-business refers to the integration, through the Web/Internet, of all an organization’s processes from its suppliers through to its customers. For example, a company may use a website to manage information about sales, capacity, inventory, payment and so on – and to exchange that information with their suppliers or business customers. In other words, they use the internet to connect all the links in their supply chain, so creating an integrated process (what is termed “Management in Practice’).
• E-commerce refers to the activity of selling goods or services over the Web.

As discussed last week, networked information systems enable companies to coordinate joint processes with other organizations across great distances. Transactions such as payments and orders can be exchanged electronically, thereby reducing the cost of obtaining products and services. Many such systems use Web/Internet technology, with labels such as extra-organizational systems, e-commerce, e-business systems and supply chain management systems (collectively, inter-organizational systems).

The relationship between a company and its channel partners can be fundamentally shifted by the Web/Internet (or by other applications of inter-organizational systems). They can create new relationships between an organization, its customers, suppliers and business partners, redefining organizational boundaries. Firms are using these systems to work jointly with suppliers and other business partners on product design and development and to schedule work in manufacturing, procurement and distribution.

This fact is because electronic networks can help to bypass channel partners – so-called disintermediation. Disintermediation is when intermediaries, such as distributors or brokers (whose function is to link a company to its customers), are removed. For example, a manufacturer and a wholesaler can bypass other partners and reach customers directly. The benefits of disintermediation are that transaction costs are reduced and that it enables direct contact with customers. This also makes it possible to increase the reach of companies, e.g. from a local presence to a national or international presence.

Disintermediation can be contrasted with reintermediation (the creation of new intermediaries between customers and suppliers by providing (new) services such as supplier search and product evaluation helping customers to compare offers and link them to suppliers: examples are Yahoo and Amazon).

From a management perspective, the challenge of transforming a company into an e-business lies in reorganizing all the internal processes. A major concern of companies moving towards e-commerce or e-business has been to ensure they can handle the associated physical processes. These include handling orders, arranging shipment, receiving payment and dealing with after-sales service. This gives an advantage to traditional retailers who can support their website with existing fulfilment processes. Given the negative effects of failure once processes are supported by inter-organizational systems, it seems advisable to delay connecting existing systems to the new system until robust and repeatable processes are in place.

Kanter (2001) found that the move to e-business for established companies involves a deep change. She found that top management absence, short-sightedness of marketing people and other internal barriers are common obstacles. Based on interviews with more than 80 companies on their move to e-business, her research provides ‘deadly mistakes’ as well as some lessons, including:
• Create experiments and act simply and quickly to convert the sceptics.
• Create dedicated teams, and give them autonomy. Sponsor them from the wider organization.
• Recognize that e-business requires systemic changes in many ways of working.

Earlier, I identified the management job as being to add value through the tasks of planning, organizing, leading and controlling the use of resources. In particular:

• Planning – this deals with the overall direction of the business, and includes forecasting trends, assessing resources and developing objectives. I also introduced Porter’s five forces, widely used as a tool for identifying the competitive forces affecting a business. Information technology can become a source of competitive advantage if a company can use them to strengthen one or more of these forces. Managers also use IS to support their chosen strategy – such as a differentiation or cost leadership. IS can support a cost leadership strategy when companies substitute robotics for labour, use stock control systems to reduce inventory, use online order entry to cut processing costs, or use systems to identify faults that are about to occur to reduce downtime and scrap. A differentiation strategy tries to create uniqueness in the eyes of the customer. Managers can support this by, for example, using the flexibility of computer-aided manufacturing and inventory control systems to meet customers’ unique requirements economically.
• Organization – This is the activity of moving abstract plans closer to reality, by deciding how to allocate time and effort. It is about creating a structure to divide and coordinate work. Information systems enable changes in structure – perhaps centralizing some functions and decentralizing others. For example, Siemens have used the Internet to bring more central control.
• Leading – This is the activity of generating effort and commitment towards meeting objectives. It includes influencing and motivating other people to work in support of the plans. Computer-based IS can have significant effects on work motivation, by changing the tasks and the skills required. >>>
• Controlling – Computer-based monitoring systems can constantly check the performance of an operation, whether the factor being monitored is financial, quality, departmental output or personal performance. Being attentive to changes or trends gives the business an advantage as it can act promptly to change a plan to suit new conditions.

The Web, like other new technologies, also enable processes of international business, since firms can disperse their operations round the globe, and manage them economically from a distance. The technology enables managers to keep in close touch with dispersed operations – though at the same time raising the dilemma between central control and local autonomy. This internationalisation effect also makes possible working interdependently with other organizations: previously this was constrained by physical distances and the limited amount of information that was available about the relationship. As technology has advanced, interdependent operations become more cost effective – most obviously through outsourcing and other forms of joint ventures. Companies can routinely exchange vast amounts of information with suppliers, customers, regulators and many other elements of the value chain. This implies that managers need to develop their skills of managing these links (to foster coordination and trust between network members).

In summary, the Web enables radical changes in organizations and their management. It enables management to erode the boundaries between companies, through the use of inter-organizational systems. They can then develop systems for e-commerce and e-business, ultimately connected with all stages in their supply chain.

As well as transforming the internal context of organizations, the Web also affects the external context (hand in hand with internationalization and other factors) to transform the competitive landscape in which firms operate. The Web has enabled companies offering high-value/low-weight products to open new distribution channels and invade previously protected markets. These forces have collectively meant a shift of economic power from producers to consumers, many of whom now enjoy greater quality, choice and value. Managers wishing to retain customers need continually to seek new ways of adding value to resources if they are to retain their market position. Unless they do so, they will experience a widening performance gap (when people believe that the actual performance of a unit or business is out of line with the level they desire).

I have also considered how people introduce change to alter the context, with management attempting to change elements of its context to encourage behaviours that close the performance gap. For example, when supermarkets introduced on-line shopping, their management needed to change technology, structure, people and business processes to enable staff to deliver the new service. Thus there is an interaction between context and change: with change affecting context but also context (organisational culture) affecting change.

Globalisation refers to the how the world is ‘shrinking’ culturally and economically. How the world is changing from different nations managing themselves to one big world trading ideas, people, products and money. There are many global companies such as MacDonalds that exists everywhere! There are a number of advantages and disadvantages to globalisation. Sometimes it can be seen as a good thing that benefits small businesses by giving them access to a larger market, such as through the Internet. However, sometimes it can also be seen as a bad thing, for example with the outsourcing of work to poorer countries and buying materials for production in poorer countries to save money which can affect the local and national economy.

The Long Tail – Chris Anderson

The tail refers to the long end of the curve on the graph that depicts the popularity of all products. As you can see from the image above, ‘the head’ is short and contains the most popular of products. These are things that everyone wants, think of it is the top 40 songs in the charts. ‘The tail’ is much longer and consists of every other product in existence (or every song that is not in the top 40!). These things are much less popular, but there is a lot more of them. Money can be made by just selling products from the long tails, you would sell maybe one of each product rather than millions of one product as is seen in ‘the head’.

Companies do still aim for a business model that targets ‘the head’ rather than the long tail. For example radio stations tend to play the popular music at that moment in time, but there is a suggestion from Chris Anderson that the radio is dead.

Why the radio is dead:

1. Radio stations need money so they need advertising and therefore need listeners. To get the most listeners you need to appeal to the majority who like what is popular at that moment in time (‘the head’).
2. The rise of technology in the form of MP3 players. You can listen to any music you want at home, on your PC, on my personal MP3 player and even take that into your car and connect it to a modern car stereo.

Chris Anderson also suggests that “The Long Tail is full of crap.” Which is it…It does contain everything! But the compelling thing about the long tail is that there is something for everybody that they would not be able to find and purchase otherwise.

The Internet and the Long Tail

The internet has given us unprecedented ability to access products never before available so quickly and easily. The Internet is the best example of how globalisation can reach everyone. Someone who makes Doggles (goggles for dogs), or other niche items, can become a millionaire.

A real shop on the high street may have trouble making money if it was taking advantage of the long tail. Not just for the reason that it cannot reach as many customers as an online shop, but for more practical reasons that it would be difficult to sort through all of the many niche products. Being able to search through the ‘crap’ and filter to get to the information you actually want is very much a benefit you can see online. Social media may also help with this, we often see suggestions for other items we might like on online shops like Amazon. Folksonomies consisting of lots of tags collaboratively created may also assist with finding things you want and things that are similar to it.

Does the Internet bring down the barriers for businesses?

Eric Schmidt on the long tail

Is Globalisation good for the small business?

Yes and no, it depends on what you are selling. There is the potential for more sales through having greater access to a wider market. This is especially true for niche items and products where in some situations they may sell nothing if they are not based near their market. The Internet definitely assists with globalisation based on geography. There is also the benefit that selling products online is very cheap to set up and use. Google Analytics is also a nice tool to assist with marketing and improving your own business website.

However, with the benefits of reaching more people, large businesses will also receive this benefit. Large businesses may be able to give better prices due to mass production, but this shouldn’t effect niche businesses where large businesses do not offer so many niche products.