Saturday, November 24, 2001

Management: "Information is Power?

Written: 24/11/2001

In the "good old" capitalist days, capital ruled. O.K., one also needed labour and knowhow or technology (or land in the "ancient" times), but capital was the scarce, the critical resource.

If one had capital, one could easily secure the rest. In capitalism, big is beautiful, utilising economies of scale and scope. A strong savings mentality helped build strongholds of capital, multinational, now "global", corporations.

Nowadays, in the "globalisation" era, it appears that capitalism has won, that it is invincible.


Because the more capital one has, the bigger one is, or the bigger one can become.


Well, not exactly.

Global players are indeed strong. But where does this strength come from?

We argue that the single most critical source of power is Information.

This argument seems to agree with the era of the Internet (in spite of the dotcom fallout) and global telecoms.

Today one can view, listen, surf, purchase, invest anything and anywhere in the world he or she wishes. So Information is indeed Power.

But what is "Information"?

I look up for information on the word "information" in my wordprocessor's Thesaurus.

It offers me the following synonyms: knowledge, data, facts, news, advice, tip, intelligence, wisdom, lore. It also offers the following antonyms: Ignorance, conjecture, mystification, hiding.

So information is knowledge?

Do data and facts yield Power? Advice? If I am then well informed, or well advised, does that mean that I am wise and powerful? So why are not all wise people rich or powerful (and vice-versa)? Why is there then the saying that "ignorance is bliss"?

At the corporate level, does this imply that the strength of global corporations comes from their ability to collect knowledge, data, facts, news, advice, intelligence and wisdom from around the world and put it to use? What if they "overload", just as machines sometimes do?

In the days of state imperialism, access to raw materials was paramount. Numerous wars were fought in the quest for unique, bulk or cheap raw materials.

Have data and facts, advice and intelligence replaced those tangible raw materials for corporate dominance?


Does that mean that wars will be fought over information? What kind of information? What kind of wars?

Is it marketing information? About the needs and wants of consumers which will make products and services successful in these markets? Is then the competitive problem of a local or regional company the fact that it does not know what are the needs and wants of potential consumers in other parts of the world?

Is it about information on who are the appropriate wholesalers or retailers, investors, workers, providers, etc around the world? On the other hand, why do local dominant players lose ground to the global crusaders? If they know their own turf, how can others beat them on it? Maybe because they have knowledge that comes from information gathered in other geogarphical places.

Is it information on where to find sources of funding around the globe?

In most disciplines of Business Administration, and most of all in Finance and Macroeconomics, the fundamental working assumption is that there exists "perfect information".

Is then information the maker of "kings"? The source of competitive power? Would perfect information make the markets function as well as in theory, introduce absolute competition?

Would it become the great "equaliser", making all people equal, or all companies equally profitable?

Wait a minute.

Does that mean that whoever has the data of facts is the emperor? But are data and facts the only material needed to achieve knowledge? What about processing it?

Don't you need a good old machine to make data and facts into knowledge and wisdom?

* At personal level, it is the mind.
* At corporate level, everybody is aiming for the learning organisation.

But does knowledge automatically bring success? Of course not. Just as power does not mean you win, unless you know how to use it (strategy).

This is where the notion of Human Capital enters the corporate picture.

Some of the best practices regarding management of Human Capital can, according to many management gurus, be found among film studios, theatre companies, publishing houses. We would add, certain football and other athletic teams-corporations.

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