The Internet and its Paradoxical Nature in International Business

Rudolf R Sinkovics, M Yamin

Research output: Contribution to journalArticlepeer-review

Abstract

Devoting a special issue of CPoIB to the ???paradoxical nature??? of the internet in International Business was deemed appropriate and timely, as the role of the medium is often unjustly exaggerated in relation to both International Business theory and practical application. The aim of this issue of CPOIB was to bring together research that provides a basis for understanding novel IB phenomena, facilitated by the emergence the internet. The papers which are included in the special issue cover areas of firm internationalisation, ICT facilitated relationships between small and large firms, ICT-enabled structural change in Multinational companies and ICT impact on the customer and supplier relationships. According to the Merritt???Webster online dictionary, a paradox entails having ???seemingly contradictory qualities???. In this sense the internet medium and ICT more generally does seem to have paradoxical impact on international business activity and management. The papers included in the special issue each highlight a distinct dimension of the internet/ICT paradox in the context of international business. Thus whilst the internet can justly be credited with removing some barriers to growth and international scope of small businesses (Bell 1995; Lituchy and Rail 2000), in speeding internationalization it may remove or reduce opportunities for learning about market environments. Fast internationalisation may also become ???ignorant??? internationalization as the paper by Foregren and Hagstr??m (2007) illustrates. As regards the interrelationship between MNEs and their SME suppliers as the paper by Jean (2007) argues, ICT applications on the one hand promise more transparent and efficient governance and gains for all parties but at the same time increase the power of the MNE purchasers and increase SME dependence. In the literature there is a recognition that ICT applications reinforce centralizing tendencies in MNE hierarchies (Cowling and Tomlinson 2005; Kim, Park, and Prescott 2003). Some recent research in fact has suggested that the internet and digitalization is facilitating radical changes in the structure of big business (such as the growth of modular production contract manufacturing and the ???flagship??? multinationals (Nolan, Sutherland, and Zhang 2002). However the paradoxical nature of this outcome is not usually stressed. Yamin and Sinkovics (2007) argue that ICT application involves a ???control paradox??? in the sense that by increasing the power of the centre the ICT application may simultaneously reduce or even destroy the organisational adaptability that is arguably a potential advantage of multinational corporations. The two other papers included in the special issue provide broader perspectives on the ICT paradox. Fikircoka (2007) offers a critical assessment of the digital economy, based on an inter-disciplinary literature survey that brings together pieces of work that have previously been analysed largely in a separate manner. Finally the paper by Penz (2007) takes a fresh look at the Internet???s paradoxical nature from a consumer point of view. It is argued that some of the Internet???s paradoxical effects stem from socio-political and socio-cultural changes, for example, a power shift from companies to consumers, and normative and anti-normative behaviours.
Original languageEnglish
Pages (from-to)288-290
JournalCritical Perspectives on International Business
Volume3
Issue number4
Publication statusPublished - 2007

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