Economics, Management, and Financial Markets Volume 6(2), 2011, pp.

194199, ISSN 1842-3191

CHALLENGES OF MANAGING E-COMMERCE

NATALI A MARIA SPERDEA natalita-maria.sperdea@ucv.ro MARIA ENESCU maria.enescu@ucv.ro MARIAN ENESCU marian.enescu@ucv.ro University of Craiova ABSTRACT. The main objective of this paper is to explore and describe the type and location of e-commerce transitions, opportunities for new commercial arrangements for transactions, participants and constraints in the e-commerce environment, the strategic impact of e-commerce on an organization, and the use of the Internet and its successors for e-commerce. The paper generates insights about the fundamentals of e-commerce fraud-prevention techniques, commercial fraud-prevention services, key elements of an e-commerce performance improvement system, the effectiveness of e-commerce system, and the security requirements for e-commerce. These findings are consistent with a number of prior observations. JEL: L81, L86, H55 Keywords: e-commerce environment, Internet, transaction, market conditions

1. Introduction In the present paper, we focus on the advent of electronic commerce and the internet, the security and certainty of electronic commerce, the regulation of electronic commerce, legal problems arising through the use of electronic commerce, and the eruption of the law of electronic commerce. The mainstay of the paper is formed by an analysis of the development of e-commerce services in response to changes in market needs, the adoption of the Internet for e-commerce, changes in supply chain management introduced by ecommerce, the international dissemination of e-commerce, and the advent of electronic commerce. The findings of this study have implications for the regulation of the electronic commerce environment, the dramatic rise in electronic commerce, the global internet commerce system, the development
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of shared policy on electronic commerce procedures, and transparency in electronic commerce. The purpose of this article is to gain a deeper understanding of the emergence of m-commerce, the evolution of e-commerce on the Internet, the development of e-commerce applications, the concepts and relationships of the e-commerce domain, and the infrastructures of internetbased e-commerce applications. This paper begins to fill this gap by exploring the globalization enabled by e-commerce, the importance of fulfilment in achieving e-commerce success, the dynamics of international commerce, changes in market conditions as a result of e-commerce, and the suitability of the Internet for e-commerce. The objective of this paper is to emphasize the role of governments in promoting e-commerce, challenges of managing e-commerce, the role of government organizations in promoting and regulating e-commerce, the growing importance of e-commerce, and the potential for further growth in e-commerce. 2. The Development of E-commerce Services in Response to Changes in Market Needs Montague claims that e-commerce refers to the sale of goods and services online. The e-commerce space is showing significant year-over-year growth. Credit cards are the dominant players in e-commerce transactions. Encrypted digital signatures are widely used in e-commerce and regulatory filings.1 On Feigenbaum et al.s reading, the increase in e-commerce has coincided with an erosion of consumer privacy.2 Hinz and Eckert say that search and recommendation tools play a crucial role in e-commerce: the consumer can easily scan huge assortments with the help of search technology.3 Davidson points out that the development of security protocols has aided the expansion of electronic commerce. Public key cryptology has revolutionized electronic commerce, and parties must consider the risks of electronic commerce. Electronic commerce raises questions regarding security of transactions, standards and protection in an international context. Forms of etiquette emerge in social and commercial situations, and commercial parties have at their disposal numerous methods of communication virtually. Importantly, this means that the majority of electronic commercial situations can be resolved using existing legal principles. Davidson argues that the operation of electronic commerce in cyberspace results in new circumstances. Crimes involving electronic commerce involve the use of computers and telecommunications. Trade organizations recognize the significance of the electronic commerce revolution and the need to provide rules and guidance. Electronic commerce is inherently trans-border.4 Bruce et al. insist that the rapid growth in e-commerce affects state and local economies. The development of digital technologies and e-commerce
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has had profound effects on the U.S. economy. The greatest implications of e-commerce have been on the ways that businesses work with each other.5 Carr focuses on use of electronic data interchange for commercial transactions. Electronic communications are an inevitable part of modern day commerce. The Internet provides a ready platform for commerce to flourish. Carr notes that self-regulation should be the guiding force in the e-commerce arena, and e-commerce uses a variety of communicative techniques. International commerce is dependent on information technology, and a legal framework to facilitate e-commerce is essential. The global significance of e-commerce is a fact, and it is important that divergent approaches to legislation and the resulting uncertainties do not curtail the growth of e-commerce.6 Carr insists that criminalization of computer misuse reduces commercial risks or dangers. The lack of a uniform liability regime for multimodal transportation affects commerce. The late 1990s witnessed the electronic commerce explosion widely predicted to be a vital contributor to global economic growth. Along with other legal issues, such as recognition of digital signatures and electronic bills of lading, providing arbitration online caught the imagination of information technology lawyers and the net community.7 3. The Growing Importance of E-commerce Blanco-Fernndez observes that the evolution of information technologies consolidates recommender systems as essential tools in e-commerce. Traditional recommender systems do not fully meet the needs of e-commerce settings in which the users are not focused on the kind of items that may be offered to them.8 Du and Ruan claim that it is a challenge for the proliferation of electronic commerce services to provide performance guarantees under extreme overload: an electronic commerce server may be simulated as a multi-tank system. The electronic commerce servers are a complex and vital resource for many critical business applications. When the electronic commerce server dynamics are complex and poorly modeled, or when the performance specifications are particularly stringent, no solution is forthcoming. High-performance electronic commerce server should undergo drastic changes in their application. It cannot be modeled as a constant and handled by constant-gain feedback control.9 Chircu et al. assert that new technologies for electronic commerce on the Internet have changed the spectrum of possibilities for making transactions in the marketplace.10 Barnes et al. contend that e-commerce businesses need to pay attention to the content of their Web sites. Established organizations with successful e-commerce offerings may tend to be mature users who have embraced the Internet wholeheartedly rather than as a bolt-on to their current organizational form, i.e. they pursue advanced levels of process integration.11 Barnes and Scornavacca
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emphasize that mobile e-commerce (m-commerce) allows e-commerce businesses to expand beyond the traditional limitations of the fixed-line personal computer. M-commerce is a powerful way to communicate with customers. M-commerce applications are device and carrier dependent. The boom in ecommerce applications is due to the widespread use of PCs. the delivery of m-commerce applications relies on private wireless communications carriers. Mobile databases are a primary factor of m-commerce success.12 According to Hunaiti et al., e-commerce has led to many of the innovations in business practice. The most important benefit of e-commerce to society is that it keeps people in their homes, which reduces the risk of traffic accidents and cuts pollution by reducing traffic on the roads.13 Gkoutzinis puts it that the contribution of electronic commerce to international economic integration is substantial. The value of e-commerce in financial services lies in the power that it affords to consumers. The benefits generated by cross-border electronic commerce in financial services justify bold institutional reforms with the overarching objective to achieve legal certainty, less but more efficient regulation and regulatory competition.14 Bloomfield and Fischer consider how disagreement influences the cost of capital: it influences the cost of capital by altering the investors ability to predict subsequent prices. Different forms of disagreement have different effects on the cost of capital. The steady-state quality of disclosure has offsetting effects on the cost of capital. Aggregation can result in a lower cost of capital if its primary effect is to thwart perceived errors of commission. Disclosures that provide information about periods further in the future reduce the cost of capital, regardless of the nature of disagreement, by reducing the present value of the variance-increasing effects of uncertainty resolution and perceived commission errors.15 4. The Advantages of Electronic Commerce to Commercial Parties Chaffey states that management of e-commerce involves prioritizing buyside and sell-side activities. E-commerce is a subset of e-business. Business adoption of e-commerce is driven by benefits to different parts of their organization. E-commerce refers to both informational and financial transactions through digital media. For consumer e-commerce, the Internet is important in identifying online suppliers. Effective e-commerce requires a delicate balance to be struck between the benefits the individual customer will gain to their online experience through providing personal information and the amount and type of information that they are prepared for companies to hold about them.16 What is important here is that online shopping through transactional ecommerce can have environment benefits, while developing a new e-commerce
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strategy can be a daunting experience. According to Chaffey, e-commerce provides new opportunities for the marketer to vary the marketing mix. The low-value, high-volume orders are suitable for e-commerce transactions. Ecommerce servers are tailored to the needs of site owners running an ecommerce store, while a contribution to business profitability is the ultimate aim of e-commerce. Delivering service quality in e-commerce can be assessed through reviewing existing frameworks for determining levels of service quality. Those most frequently used are based on the concept of a service-quality gap that exists between the customers expected level of service (from previous experience and word-of-mouth communication) and their perception of the actual level of service delivery.17 5. Conclusions The current study has extended past research by elucidating the potential of global e-commerce, the growing phenomena of global e-commerce, the utilization of the web among multinational organizations, the importance of electronic commerce in the provision of financial services, and international governance of cross-border electronic commerce. The overall results provide strong evidence for the advantages of electronic commerce to commercial parties, the mind share in e-commerce business, the natural growth of Internet commerce, the rise of the e-commerce world, and the emergence of e-commerce. The goal of the present study was to determine if there are relationships between organizational structures for e-commerce, types of organizational structures for e-commerce, the benefits of e-commerce, challenges of managing e-commerce within an organization, and challenges of implementing and managing e-commerce. This paper has provided a literature review on the growth of mobile e-commerce, traditional Internet-based commercial activities, the nature and trend of m-commerce applications, the rapid growth of ecommerce, and the effects of m-commerce in the business-to-consumer value chain. The current study set out to identify the global nature of e-commerce, the positive effects of e-commerce for the economy, the transnational characacter of electronic commerce, the Internet as an information and communications medium, and the information technology (IT) revolution in the form of the Internet.

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REFERENCES 1. Montague, David A. (2011), Essentials of Online Payment Security and Fraud Prevention. Hoboken, NJ: John Wiley & Sons. 2. Feigenbaum, Joan, David C. Parkes, and David M. Pennock (2009), Computational Challenges in E-Commerce, Communications of the ACM 52(1): 7074. 3. Hinz, Oliver, and Jochen Eckert (2010), The Impact of Search and Recommendation Systems on Sales in Electronic Commerce, Business and Information Systems Engineering 2(2): 6777. 4. Davidson, Alan (2009), The Law of Electronic Commerce. New York: Cambridge University Press. 5. Bruce, Donald, William F. Fox, and LeAnn Luna (2009), State and Local Government Sales Tax Revenue Losses from Electronic Commerce, State Tax Notes 52(7): 537558. 6. Carr, Indira (2010), International Trade Law, 4th ed. New York: Routledge, 136. 7. Ibid., 643. 8. Blanco-Fernndez, Yolanda, Martn Lpez-Nores, Jos J. Pazos-Arias, and Manuela I. Martn-Vicente (2009), Automatic Generation of Mashups for Personalized Commerce in Digital TV by Semantic Reasoning, in Tommaso Di Noia and Francesco Buccafurri (eds.), Proceedings of the E-Commerce and Web Technologies, 10th International Conference, EC-Web 2009, Linz, September 14. Berlin-HeidelbergNew York: Springer, 142. 9. Du, Bing, and Chun Ruan (2009), Real-Time Robust Adaptive Modeling and Scheduling for an Electronic Commerce Server, [8], 206. 10. Chircu, Alina M., Robert J. Kauffman and Bin Wang (2007), Beyond the eBay of Blank: Next Stage Digital Intermediation in Electronic Commerce, in Stuart Barnes (ed.), E-Commerce and V-Business Digital Enterprise in the TwentyFirst Century, 2nd ed. Butterworth-Heinemann,Oxford-Burlington, MA, 4378. 11. Barnes, Stuart, Eduard Cristbal, Frederic Marimon, and Richard Vidgen (2007), Assessing E-commerce Quality, [10], 117. 12. Barnes, Stuart, and Eusebio Scornavacca (2007), The Emergence of Mobile Commerce, [10], 157178. 13. Ziad Hunaiti, Raed (Mohd Taisir) Masadeh, Mohammed Mansour, and Ahmad Al-Nawafleh (2009), Electronic Commerce Adoption Barriers in Small and Medium-Sized Enterprises (SMEs) in Developing Countries: The Case of Libya, Ibima Business Review 2(5): 38. 14. Gkoutzinis, Apostolos (2006), Internet Banking and the Law in Europe: Regulation, Financial Integration and Electronic Commerce. New York: Cambridge University Press, 82. 15. Bloomfield, Robert, and Paul E. Fischer (2011), Disagreement and the Cost of Capital, Journal of Accounting Research 49(1): 43. 16. Chaffey, Dave (2009), E-business and E-commerce Management: Strategy, Implementation, and Practice, 4th ed. Harlow: Prentice Hall, 210. 17. Ibid., 536. Natali a Maria Sperdea et al. 199

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