As we know and understand, the world is undergoing a dramatic transformation into the Information Age, also referred to as the Wave. The First Wave represented the world transformation from a hunter-gatherer society to an agricultural society. The Second Wave trans formed the agricultural society into an industrial society. And, the Third Wave is now transforming industrial society into an information society. Each of the three waves is characterized by historic and unprecedented upheavals in the collective social, political, cultural, and economic fabric of civilization. The purpose of this paper is to discuss how information society may affect government reorganization. Most government institutions around the world were built on the understanding of the times one hundred years ago as the world created order for an industrialized society. The challenge today is how to transition from an industrialized model of big government--centralized, hierarchical, and operating in a physical economy--to a new model of governance, adaptive to a virtual, global, knowledge-based, digital economy, and fundamental societal shifts. Reduced information costs should produce dramatic changes in the comparative advantage of governance mechanisms and institutional arrangement. It is expected that information society could have impact on the following four dimensions; First, the efficacy of the market has increased relative to government provision and control. Technological change has also influenced the thrust of reform efforts in the field of social regulation. Advances in information processing have permitted a variety of public assets--ranging from clean water and air to fish to landing rights at airports--to be securitized and bought and sold, thereby making it possible to substitute markets for direct command and control regulation. Second, the efficacy of the market and other self-organizing systems has increased relative to hierarchically coordinated systems. Large organizations were products of the bureaucratic revolution. They were justified by economies of scale and scope. However, the computer is rapidly eroding economies of scale in administration production, and marketing and, thereby, the comparative advantage of hierarchy and bureaucracy. One of the most dramatic organizational alternatives to hierarchy and bureaucracy is the virtual proximity system used by IBM. It is designed to mimic a market-like, self-organizing system. Third, the efficacy of decentralized allocation of resources and after-the-fact control has increased relative to centralized allocation and before-the-fact control. Today most well-run firms try to delegate authority and responsibility down into their organizations. This means giving departmental managers the maximum feasible authority needed to make their units productive--or in the alternative, subjecting them to minimum constraints. Hence, delegation of authority requires operating controls to be stripped to the minimum needed to motivate and inspire subordinates. Ideally the budget of such an organization would contain a single number or performance target, or goal for each administrative unit. Fourth, the efficacy of process-oriented structures has increased relative to functional structures. decentralizing along project (product or program) rather than functional lines increases organizational speed and flexibility, Emphasis on speed and flexibility calls for a different approach to managing products. Under the old approach, the production process moved like a relay race, with one group of functional specialists passing the baton to the next group. Under new approach, products emerge from the interaction of a multidisciplinary team whose members work together from start to finish.