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This story appears in the January 2002 issue of Entrepreneur. Subscribe »

Manuel Castells, dubbed "the first significant philosopher of cyberspace" by no less than The Economist, says the Net's influence on commerce has only just begun. The Internet will, he says in his book The Internet Galaxy (Oxford University Press, $25), allow organizations to be both as tightly focused as traditional hierarchies and as adabtable as networks. The payoff: Faster growth, easier change and tighter interaction with customers and suppliers.

The essential commercial entity of this world will be what Castells calls the networked enterprise. From the outside, a networked enterprise looks much like any e-commerce company that conducts the majority of its sales through a well-designed e-commerce Web site where customers specify products, place orders and arrange shipping. But, behind the scenes, a truly networked enterprise feeds that information into manufacturing. There it's used to engineer products that better meet customers' needs. It also winds up in the databases of a global system of suppliers, who can use it to improve the systems and services incorporated into the end product. Such networked structures, he says, can help companies of any size shine brightly in the new Internet galaxy.

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