Contents |
Online business networking is the use of online communication to establish virtual communities for commercial purposes. This is a horizontal form of communication between those involved in a business environment, as opposed to direct online trading which involves selling directly to consumers in an online context. (Hall and Graham, 2004, p.235) Online business networking is used for collaborative projects between organizations in different industries, internal communication when geographic or physical boundaries exist, and, on occasions, for collaborative projects between competitors.
Inter-industry collaboration is the alliance between businesses, in separate industries, to create mutually beneficial relationships. In terms of an online relationship, this allows complimentary businesses to create linked networks or ‘web-rings’ of complimentary goods or services, with often highly integrated websites. (Mukai, 2005, p. 781) A prominent example of this is trading site eBay’s interaction with online credit guardian and distributor PayPal. During 2004, both companies noticed the growing number of users that were concurrently using both their services and decided to slowly integrate the businesses to provide stronger revenue for both organizations, with completion of the project planned for October 2005. (eBay, 2005) The benefits of inter-industry collaboration such as this include:
(Mukai, 2005, p. 781)
Internal business networking refers to the now commonly found linkages, in the form of virtual communities such as bulletin boards or forums, between people in the same company who are divided, generally geographically. The majority of multi-national corporations now use online communications systems to carry out both collaborative projects and day-to-day operations. (Nathwani and Diduca, 2002, p.163) The bulletin boards of the 1970s and 1980s, in the early days of the internet, were an expression of how more was achieved through a group system, through mostly scientific and military based networks.
The importance of teamwork and delegation is now being reiterated within corporate circles with an increase in online workplace connection and interaction. Recent research shows that by 2010, 70% of the US population will spend 10 times longer per day interacting virtually. With more job duties taking place virtually, many people are working and collaborating with virtual teammates. (Emelo and Francis, 2002, p. 17) Greater team interaction can lead to greater outcomes for the company and greater commercial success.
There are now a growing number of businesses, such as Alcatel and Alcazar, that offer to establish virtual communities within large corporations, prompting for greater use of networks on a day-to-day basis. Companies that have traditionally provided network hardware are looking to increase the use and reliance on that hardware. Internal business networking has become a business in itself.
Although it is rare, online business networking can occur between competitors. This can allow for mutual problems to be confronted with smaller costs. Though, due to the nature of competitive companies, great discretion is taken when considering disclosure of information and the retaining of a competitive advantage. For this reason, these interactions are often highly monitored. (McAfee, 2005, p. 84)
An example of this is the research and development program run concurrently by Japanese company Sony and Korean competitors Samsung. Although both companies are continually locked in intense competition, research and development for new products and services is funded by both companies in a collaborative project, based centrally off the internet. This mutually benefits both Sony and Samsung as they both cut expenses in this particularly expensive thread of the communications, entertainment and multimedia industry. (Samsung, 2004)
EBay (2005) “eBay: PayPal FAQs�?, URL: http://pages.ebay.com/paypal/faqs/ [accessed: 26/9/05]
Emelo, R., Francis, L. (2002) “Virtual team interaction�?, T + D, 56 (10): 17, ISBN: 10559760.
Hall, H., Graham, D. (2004) “Creation and recreation: motivating collaboration to generate knowledge capital in online communities�?, International Journal of Information Management, 24 (3): 235, ISBN: 02684012.
McAfee, A. (2005) “Will web services really transform collaboration?�?, MIT Sloan Management Review, 46 (2): 84, ISBN: 15329194.
Mukai, J. (2005) “Joint ventures and the online distribution of digital content�?, Berkeley Technology Law Journal, 20 (1): 781, ISBN: 10863818.
Nathwani, K., Diduca, D. (2002) “Success factors of on-line business communities�?, BT Technology Journal, 20 (3): 163, ISBN: 13583948.
Samsung (2004) “Samsung’s digital world – press release�?, URL: http://www.samsung.com/PressCenter/PressRelease/PressRelease.asp?seq=20041214_0000081095 [accessed: 26/9/05]
--Dominic Jarvis 18:17, 26 Sep 2005 (EST)
