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Chapter 10. Waves of the Future—Issues T... > Change in External Relationships—It ...

Change in External Relationships—It Is the Company We Keep That Determines Who We Are

The Internet and its impact on commerce have been pervasive, and its effects will continue to be felt. An area in which this is destined to continue to have a significant impact is that of interorganizational relationships. The industrial era created an order to the society that had the giant multinationals at the top, then the tier-one suppliers, followed by tier two, and so on down the "food chain." The dependence of each supplier on its customers was total, and the profit margins were substantially fixed in these layers. The Internet has changed and challenged this (and will continue to) as organizations in the supply chain become more flexible and agile, increasing their market's scope and size.

Former heavy-industry suppliers, such as those in the automobile industry, have over the past few years become more agile and flexible as they have adopted the flexible work practices of the mass-customization management style.[60] Similarly service industries such as insurance and banking have begun providing services in sectors previously off limits (such as those provided by CitiGroup). Both these and other sectors have realized that the Internet is a new frontier with enormous opportunities. However, the former pecking order is being challenged and the rules changed through the access and connectivity of the Internet.

[60] R. Plant, D. Feeny, and H. Mughal, "Land Rover Vehicles, the CB40, a Project in Nimbleness and Flexibility," European Clearing House of Cases: Case 600-001-1.


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