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International perspective on the state of the e-business revolution

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A common belief emanating from the US is that information and network-based systems herald a "new economy" - revolutionizing the way business is conducted. In this paper, the authors advance an international perspective that questions whether e-business truly reprensents a revolution in the way firms' operate or whether it is a more evolution driven by technology - ie. whether it is simply a variation on a theme. Although such a question appears mundane, it is fundamental that both academics and business practitioners understand the answer to this question. For, in the end, the answer determines the relevance of current academic theory and business practice to the supposed new reality. This paper builds on neo-insitutional economic thinking and a recent theory of international business structure to examine the three core determinants of the performance of multinational firms - the supply-based pressures for global integration, the demand-based pressures for local responsiveness, and the contracting pressures for transactional completeness - in an e-business setting. As will be shown, the role that networking technology plays in determining the structure and strategy of multinational enterprises in an e-business environment is likely to be more of a variation on a theme than a revolution - once one accounts for the transactional changes that are occurring. Finally, the authors extend their perspective on e-business to assist global managers dealing with the all-important issues of how to build and change institutions to better exploit the potential of e-business.

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