E-Business: A Western View

Surveys of Western literature identify eight key factors deemed essential to the successful adoption of e-business: law, infrastructure, tax, payment processes, consumers, suppliers, education and business culture.

Law Related to E-Business

A legal framework is required to support e-business. It can enhance or inhibit the development of electronic trading. Legal issues include: support for the use of digital signatures and digital certificates in virtual transactions; ease of licensing; and the degree of regulation governing conduct of online transactions. The legal and regulatory environments required to support growth in the digital economy are significantly different to those needed to support traditional enterprises (IDA Singapore, 1998). This presents specific challenges to the government, who must also adapt both national policy and international strategy to effectively deal with the new digital economy. The government must provide transparent, market-favorable regulation and legislation. Suitable environments must be set in place to support security, secrecy and non-repudiation of digital transactions. Existing regulations must not be allowed to interfere with the growth of new or existing markets over the Internet. New regulations should be flexible enough to cater for global policy shifts and further changes in technology.

E-Business Infrastructure Requirements

E-business infrastructure can be defined according to network connectivity, logistics, transportation, telecommunications structure, and the standards, guidelines, components and services required to support e-business activities. E-business cannot function without adequate telecommunications and Internet infrastructure (Sowinski, 2001). Global e-business requires a modern, seamless and reliable global telecommunications network. Research in this area reveals that in many countries, delays in the establishment of sound telecommunication policies has affected the development of advanced digital networks (IITF, 2000).

Tax Related to E-Business

Taxation of e-business is a difficult area to address. The global nature of electronic business raises issues of international tax legislation that should be examined by both national governments and international bodies. According to the National Computer Board (Mauritius, 2001) most international tax authorities believe that current tax systems and structures, founded on basic principles of neutrality, fairness, certainty and simplicity, will continue to be appropriate to cater for the changes brought about by electronic transactions. In May 1998, members of the World Trade Organization (WTO) agreed to refrain from applying customs duties on electronic products and services delivered electronically across national boundaries.

Payment Process of E-Business

Payment and logistics systems form the backbone of e-business transactions. E-business requires the support of secure, reliable and efficient electronic payment mechanisms including those for handling online credit card transactions (Sowinski, 2001). Security is the most discussed e-business issue and concerns the confidentiality and protection of sensitive information. Electronic payments represent a new form of payment and doubts have been raised regarding the potential risks and lack of security associated with such transactions. Credit cards are the most common form of payment on the World Wide Web (WWW). Securing e-business transactions, however, involves more than simply encrypting the transactions. Businesses must also ensure that sensitive consumer information, such as credit card numbers, cannot be abused by employees and that unencrypted credit card information is stored on a secure system (Hong Kong Productivity Council, 2001).

Consumer of E-Business

The Internet presents new challenges to business by providing new ways to find, develop and interact with customer bases. The Internet has enabled customers to access information on products and services from vendors around the world. Information from competitors is now readily available to customers to allow them to make more informed purchase decisions.

It is therefore important that organizations involved in e-business understand what the needs of their customers are and how to respond to these needs as they arise. To be successful in e-business, organizations must be able to clearly define who their e-customers are and be aware of the changes that the World Wide Web has brought to marketing. They must also be educated in successful on-line interaction methodologies and understand the best ways to market products and services to their e-consumer base (Agarwal, 2001).

Vendors of E-Business

Companies involved in conducting business internationally have to deal with clients from different cultures. Successful e-business providers rely on their ability to satisfy the requirements of their customers, provide secure transactions, and deliver goods in a timely and reliable manner. The usability and personalization of their web sites is also an important consideration.

Education

E-businesses require their customers to have the ability to navigate the WWW. It follows, therefore, that a country's level of education and literacy determines the number of people with the necessary skills to navigate the web and, consequently, utilize e-business. Education and literacy are a necessary pre-condition to e-business uptake. Education and training are also important factors in ensuring that entrepreneurs, managers and employees, both present and future, have the necessary skills to perform successfully in an electronic business environment (National Computer Board-Mauritius, 2001).

Business Cultural

Merrill Lynch & Co, Inc. (2001) stated that gaining a clear understanding of global business culture. was essential in operating a high quality e-business. Culture is defined as the sum of learned beliefs, values and customs that guide the behavior of members within a society. Business culture can exist at both a national level, as well as at various other levels within a country (Pornpitakpan, 2000). As e-business is global in nature, cross cultural business issues must be addressed. Ignoring alternate ways of thinking can seriously impede successful business negotiations. Kammeyer (2001) believes business cultural differences are significant and are often the most troublesome variables in business negotiations. Acquiring a good knowledge of intercultural/cross-cultural business issues and etiquette through training can mean the difference between business success and failure. Failure in e-business may not be due to technical or professional incompetence, but rather a lack of understanding of cross-cultural business issues and the inability to adjust accordingly. Cultural fluency is the term most often used to describe a person's ability to understand the traditions, assumptions and values of other cultures. Failure to identify and account for the cultural issues associated with e-business can lead to the development of culture shock and the possible failure of the business enterprise. Understanding the importance of managing business cultural differences is therefore a key to building a successful global e-business.