According to Chander's account, what did these and other firms do in the late 1800s that enabled them to become large and successful? How were their strategic decisions interrelated? Which of these decisions were relatively easy to implement, and which were relatively difficult? Why did being first enable them to have a lasting competitive advantage relative to their competitors?
2. For many firms, allowing employees aceess to the World Wide Web (WWW) and internet-based electronic mail is potentially useful. The WWW permits employees rapid access to data and information they previously had to ask corporate librarians to obtain. Email is a lower cost and less intrusive means of communication than telephone conversations or fax exchanges. Lower information or communication costs can permit firms to realize new efficiencies.
However, as the attached article describes, the new capabilities can be value-decreasing when employees use them toward increasing their utility in ways that are not value enhancing to the firm.
Why is the misuse of firms' information and communication systems a potentially more severe problem with respect to the WWW and Email than in systems which rely on corporate librarians, letters, and faxes?
How might existing (pre-Web and pre-Email) information and communication systems be complementary with firms' organizational features? Explain why the features you cite or complements, using the definition of complementarities.
Why might a firm not respond to decreases in the price of electronic commerce (e.g., email) by moving away from a phone and fax-based system to an email-based system?
What organizational changes might be complementary to allowing employees web access and internet email accounts? Which of these might you be able to embed in the software itself? Which of these would involve changes in the relationships among employees, or between your firm and other firms?
3. What is true when incentives are complementary? Suppose a worker chooses both the quantity and the quality of output he produces, and that the firm can obtain a measure of each. Why might incentives toward quantity and incentives toward quality be complementary? Suppose an innovation permits a firm to get a better measure of the worker's effort toward quantity, but does not change how well it can measure workers' effort toward quality. How would the firm then change how it compensates the worker? That is, would it provide stronger or weaker incentives toward quantity? Toward quality?
4. What is "flexible manufacturing equipment"? What is "just in time inventories"? Why might using flexible manufacturing equipment and just in time inventories be complementary (be careful -- remember the definition of "complementary")? What might initiate the adoption of these business practices? Why might implementing them be difficult and costly?