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Chapter 2 Global E-business and Collaboration 91

TABLE 2.3 BUSINESS BENEFITS OF COLLABORATION AND SOCIAL
BUSINESS

BENEFIT RATIONALE
People interacting and working together can capture expert knowledge and
Productivity solve problems more rapidly than the same number of people working in
isolation from one another. There will be fewer errors.
People working collaboratively can communicate errors, and corrective
Quality actions faster than if they work in isolation. Collaborative and take social
technologies help reduce time delays in design and production.
People working collaboratively can come up with more innovative ideas for
products, services, and administration than the same number working in
Innovation
isolation from one another. Advantages to diversity and the “wisdom of
crowds.”
People working together using collaboration and social tools can solve
Customer service customer complaints and issues faster and more effectively than if they
were working in isolation from one another.
Financial performance As a result of all of the above, collaborative firms have superior sales, sales
(profitability, sales, and growth, and financial performance.
sales growth)

Another study of the value of collaboration also found that the overall economic
benefit of collaboration was significant: for every word seen by an employee in
e-mails from others, $70 of additional revenue was generated (Aral, Brynjolfsson,
and Van Alstyne, 2007). McKinsey & Company consultants predict that social
technologies used within and across enterprises could potentially raise the
productivity of interaction workers by 20 to 25 percent (McKinsey, 2012).
Table 2.3 summarizes some of the benefits of collaboration and social business
that have been identified. Figure 2.7 graphically illustrates how collaboration is
believed to impact business performance.

BUILDING A COLLABORATIVE CULTURE AND BUSINESS
PROCESSES

Collaboration won’t take place spontaneously in a business firm, especially if
there is no supportive culture or business processes. Business firms, especially
large firms, had a reputation in the past for being “command and control”
organizations where the top leaders thought up all the really important matters,
and then ordered lower-level employees to execute senior management plans.
The job of middle management supposedly was to pass messages back and
forth, up and down the hierarchy.
Command and control firms required lower-level employees to carry out
orders without asking too many questions, with no responsibility to improve
processes, and with no rewards for teamwork or team performance. If your
work group needed help from another work group, that was something for the
bosses to figure out. You never communicated horizontally, always vertically, so
management could control the process. Together, the expectations of manage-
ment and employees formed a culture, a set of assumptions about common goals
and how people should behave. Many business firms still operate this way.
A collaborative business culture and business processes are very different.
Senior managers are responsible for achieving results, but rely on teams of
employees to achieve and implement the results. Policies, products, designs,

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