An important benefit of the density of information which physical propinquity allows
is that knowledge flows more easily. One respondent bemoaned the demise of the “City
lunch” which was seen as a powerful way of ensuring people knew what the key
developments in the market were. Another respondent explained:
You want to be able to meet with your biggest customers over lunch - take the head of
x out to lunch and see what he thinks - and it’s being able to say to someone - look
I’m going to be walking past your building this morning. I’ll just pop in and see what
you’re doing about this, that and the other - again it boils down to human contact - if
you want to keep your finger on the pulse and in the loop - you can’t get that from the
trade press and so ... actually a lot of that comes from dinner parties and cocktail
parties - its informal but that’s what you miss if you’re not in the loop.
Another benefit of dense interaction is that people become socialized in the sense that
they absorb norms of doing business as well as the language in which business is done.
There is a significant tendency for accounting, and to a lesser extent legal firms, to rate
their complementary expertise as being important. Somewhat surprisingly, no fund
management firm rated this factor as being important or very important. There are also
significant differences in the frequency with which firms rate ease of communications due
to a common understanding of the business as being important, with banks and to a lesser
extent insurance and legal firms rating this factor as being important more frequently and
investment banks and fund management firms rating it as being less important. There is
some tendency for the ability to build and maintain personal contacts to be rated as very
important more frequently by banks and legal firms. The ability to have face-to-face
contact tends to be rated as very important most frequently by insurance firms as indicated
by the following remarks:
Lloyds is still very much a little village where everybody communicates with each
other and in insurance generally. All the badge players have to know each other and
have to know what they’re doing or they’re going to go out of business.
The importance of personal relationships is reflected in Table 6 which contains the
most highly ranked group of factors. It might appear at first blush that the fact that
telephone and e-mail are the most highly scored ways of having important interaction with
staff in other companies belies the need for physical proximity. However, taking these
responses together with those in Table 5 casts doubt on this conclusion, since important
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