Technology (MIT) Japan Effectiveness Training course, can be helpful in this regard.


The Internet and the Web are great equalizers in proximity and global presence, providing equal opportunities for suppliers large and small, foreign and domestic. A presence on the Web is becoming increasingly important for many SMEs because it can deliver the corporate message to a global audience and increase business opportunities. It can also increase risk, however. Advertising the latest capabilities, product features, and prices informs both customers and competitors. Requests for product samples may come from potential customers or, either directly or through third parties, from low-cost competitors in countries with scant regard for intellectual property rights.

Because most SMEs are not in a position to locate plants near each of their customers, they must find other ways to deal with the issues of proximity. Some of the problems of distance can be overcome by means of electronic systems, such as e-mail, electronic data exchange, and video conferencing, which can provide some of the benefits of proximity at lower cost. Supply chains in the computer industry, for instance, are typically geographically scattered and have little organizational or cultural proximity, but they do have close electronic proximity. However, no matter how advanced the communications system, true geographic proximity always provides an advantage because there is no substitute for face-to-face contact. "Take the look in the customer's eye when you tell him a new price," says Thomas W. Malone of the MIT Sloan School of Management. "That's very useful information" (Washington Post, March 6, 1999).

Recommendation. Because Internet technologies and modern transportation capabilities enable suppliers from low-wage areas to compete effectively with U.S. small and medium-sized manufacturing enterprises (SMEs), pressure on SMEs to improve their cultural, organizational, and geographic proximity to their customers and suppliers has increased. Even SMEs with limited resources can respond to some of these challenges at low cost through increased cultural education and use of the Internet and Worldwide Web.

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement