Internet Thinking and the Transformation of Traditional Firms

Li Haijian 1, Tian Yuexin 1 and Li Wenjie 2

1 Institute of Industrial Economics, the Chinese Academy of Social Sciences (CASS), Beijing, China
2 Business School of Bangor University, Northern Wales, the UK

Abstract:  The Internet and mobile Internet have made the transaction of a huge number of products and services possible in ways previously unimaginable, exerting an extensive and profound influence on commercial, industrial, financial and even medical enterprises, universities and government agencies. All of this wide variety of transformations can be distilled into the concept of “Internet thinking.” This paper poses that Internet thinking consists of the following three levels. First is Internet spirit, i.e., openness, equality, collaboration and sharing. Second is Internet philosophy, including interconnection between virtual and real entities, elimination of restrictions of time and space, modularization, personal imperialism, crowdsourcing and user-centered approaches. Third is the Internet economy, featuring long-tail theory at a technical level, market equilibrium theory at the level of transaction structure and consumer sovereignty theory at the level of transaction performance. According to Internet thinking, traditional firms must be transformed towards smart organizations characterized by network-based ecosystem, global integration, platform-based operation, users as contributors, borderless development and self-organizing management. As rightly pointed out by the CEO of Haier Group Zhang Ruimin, “There is no such a thing as a successful firm; there are only firms defined by their times.” Adapting to the times is key to the survival of all firms.

Keywords: Internet era, Internet thinking, smart organizations

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