Organizational Structure of E-Business

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Before we plunge into researching the topic of my choice, we need to understand what E-Commerce and E-Business mean.

1.1 E-Commerce- It is defined as any transaction accomplished via a computer-mediated network that creates an exchange of goods or services for a certain sum of money.

1.2 E-Business, it is an all-encompassing business setup that is carried out over the internet. Carrying out a business online implies that all the processes that make up a business are carried out via the use of the internet, factors such as inventory management, risk management, hiring and working of the employees are done over the internet.

The ever-growing use of the internet that has reduced the world to a global village has allowed for the creation of such a network which makes it easy to carry out all the processes over the internet possible with some basic knowledge of the intricacies of the world wide web.

Creating an E-Business that allows E-Commerce has to have the following features to it. Having a site that is consumer friendly with positive feedback and reviews helps to give that push start to eCommerce. Having a successful E-Business to cater the eCommerce needs of the firm involves developing a user-friendly website.

Moreover, E-Commerce that has been enabled by building E-Business has also impacted how the consumers buy products and what impacts their choices. A product which happens to be a crowd favorite may be able to attract more buyers as compared to the one that has negative or low ratings.

Coupled with the factor of convenience, i.e. everything is readily available by one click and is available for consumption within 48 hours without having to undergo the hassle of searching various stores to fit our bill, has allowed E-Commerce to grow rapidly.

This concept of eCommerce and E-Business was first adopted and developed by Jeff Bezos for Amazon in July 1995, (Essays, 2013) with a handful of staff. This website alone changed the landscape of shopping through the internet and how the firms create strategies to reach out to as many consumers as possible through the internet.

It’s supply chain management and the storage ideas that allow goods to be stored at a number of locations rather than one single central storage area has reduced the burden of inventory handling significantly.

2. Organizational Structure (Periasamy, et al., 2002)

Organizational structure is “the formal system of task and reporting relationships that control coordinates, and motivates employees so that they cooperate and work together to achieve an organization’s goals.” (George & Jones, 1999). Made up of five elements:

Reporting Relationship

Span of Control

Departmentalization

Allocation of Responsibilities

Coordination

The configuration is done with reference to the following three basic organizational structures: functional, divisional, and matrix (George & Jones, 1999)

2.1 Functional Structure:

In this, the employees are grouped according to their functional specialization, i.e. Marketing, Human resources, etc. It allows for stability and productiveness in the organizational structure. However, it enables the functional distinctions to grow separate identities and at a later stage may refuse to work with each other satisfactorily.

2.2 Divisional Structure:

It is for organizations that have uncertain demands and employees work when there is an actual demand for the product. It has small flexible divisions those can be easily managed and diverted as per the need. However, it leads to duplication of resources that it is the wasteful utilization of them.

This approach is useful when the immediate reaction is required depending on the geographical location or region. It is beneficial in case of a company having a number of products that are served at various locations.

2.3 Matrix Structure:

It is a combination of both the teams that have a combination product and functional specialists, which allows for a high-level integration between these two.

In these, the team members have more power to take decisions as per the needs that may arise at any given time. It uses a lot of resources and implementing it in large organizations would require tremendous planning.

2.4 Flat Structure:

It is something along the decentralization of power where there is no boss. Each and every employee is his own boss and creates plans as per the peer interaction groups.

This kind of structure has to develop special top-down structures when certain projects are being undertaken and create an effective work environment and push the people towards working in a team.

3. Importance of this project.

In the era of globalization, E-Commerce has the potential to improve the overall industry functioning standards and the ease of doing business with developed countries as well. (Chowdhury, 2003)

This is visible through the rapid growth seen the way businesses have been handling their operations in the Western countries. The reach of the consumer has allowed small-time owners to ship their locally sourced and manufactured products far and wide, allowing them to grow their market along with the profits earned.

However, both small and big companies face a major challenge with respect to the organizational structure prevalent in those companies and major overhaul that is needed in order to make them more internet friendly. “A genuine E-Business strategy, on the other hand, seeks to ‘foster conversations’ with customers throughout the organization (actually or figuratively), with all employees having a direct electronic link.” (Jackson & Harris, 2002)

The aim of this case study is to understand how E-Business and e-commerce affect the organizational structure of the companies in the 21st century. This has also increased the value of investments for the countries from foreign institutions, that has pushed them in the direction of a major overhaul.

The plan of this case study is to explore how E-Business and e-commerce have made the organizations the way they are in the present.

Creating optimum business solutions has also become the focus of the organizations in order to have better consumer outreach and the websites are created in a manner that gives the buyer the best experience possible.

In this study, we try and understand how these solutions are created and what factors are kept in mind while they are framed.

4. Primary Sources of Data

4.1 Academic:

I. The Impact of Website Information Convenience On E-commerce Success Of Companies Farhang Salehi, Bentolhoda Abdollahbeigi, Atefeh Charmchian Langroudi, Forouz Salehic (https://ac.els-cdn.com/S1877042812046630/1-s2.0-S1877042812046630-main.pdf?_btid=ddce9c8c-101c-11e8-907f-00000aab0f26&acdnat=1518457868_6063412907de14cd25dd917434a2f09b

II. THE EVOLUTION OF E-COMMERCE RESEARCH: David Kuechler (https://pdfs.semanticscholar.org/c2d2/e63b14f9f7cfd81ecad52d795033a9441238.pdf)

III. Consumer Perceptions Regarding E-commerce and Related Risks Katherine Taken Smith (https://www.westga.edu/~bquest/2011/ecommerce11.pdf)

IV. E-Commerce Sorting Out the Environmental Consequences Klaus Fichter (https://engineering.dartmouth.edu/~d30345d/courses/engs171/eCommerceConsequences.pdf)

V. E-Commerce Adoption in Developing Countries Sherah Kurnia (http://people.eng.unimelb.edu.au/sherahk/Papers/SISC_developing%20countries_Final.doc).

4.2 Contextual:

I. The Complete E-Commerce Book - Janice Reynolds

II. Electronic Commerce - Efraim Turban, Michael Chung, Jay Lee

III. One-click - Richard Brandt

IV. Electronic Commerce - Gary P. Schneider

V. Chaffey, D. (2007). E‑business and e‑commerce management – Strategy, implementation, and practice. Third Edition. Pearson Education Ltd.

5. What is your research question?

How has E-Commerce and E-Business evolved in the 21st century?

How did companies cope up with the change and manage their structure?

The above-mentioned research questions aim to fulfill SMART objectives as it will encompass the following:

Specific as it aims to understand how with the evolution of the internet and its use by the organizations to reach out to customers in faraway locations have an impact on its organizational structure to facilitate E-Commerce through its E-Business platform.

Measurable in a manner that it will compare the organization structure when businesses were limited to brick and mortar stored to sell their products and the organizational framework now in place when online shopping has replaced shopping in the traditional sense, giving access to the consumers via the online catalogs.

Achievable answers will be looked at for throughout this case study as we have ample evidence of migration of organizations handling of operations to allow more business to be done over the internet than that is achieved via the brick and mortar stores.

A relevant study in the sense that is focused on the current trends in the industry. In order to understand how an industry functions, we need to know how it operates. The operations of any organization are the process that allows for smooth turning of wheels with the least possible amount of friction. To understand E-Business and its impact on the organizational structure in order to stay updated with latest managing trends, this study becomes all the more relevant.

Time-frame based questions and setting a time limit will allow us sufficient time to explore our case study along with making it a high priority study which has to be completed in the chosen time frame in order for it to remain relevant.

If the study does not observe any of the guidelines mentioned above, it implies that there was no clear sense of direction before the case study was taken up. The whole idea of the study is to do it in a manner that allows us to increase the basic understanding of the topic in a time frame that is relevant to the topic being discussed.

Keeping a study relevant and being able to answer all the questions that may arise during the course of this study successfully is just a reflection of how well planned and executed was the method taken up.

6. What is your Hypothesis?

The proposed explanation for this case study ever since the use of internet has become commonplace with people having access to information 24/7 through various mediums, it has led to an overall increase in the awareness that is being displayed by the consumer before they invest in any product or service.

If the consumer can be aware of what is good and what is best suited for his needs it becomes the responsibility of the firms serving the people to keep up with the industry demands and give the consumer what they need.

Busier time schedules and option to choose from a virtually never-ending list of products, the companies have moved to serve their consumers through the internet.

Having to serve the buyer through the virtual stores have moved the focus from brick and mortar stores and the traditional ways in which the companies built their organizational structure to serve the buyer by the means of these stores. Moving towards the internet-oriented business setup has also changed the overall dynamics of the organizational structure in place in these firms.

The hypothesis of this study is to understand the impact of E-business and E-Commerce and who has it impacted the most. Why is that E-Business has become the keyword when defining the operations of any firm and strategies are created in a manner that keeps the online consumer in focus.

The organizational structure has also undergone major revamp due to the shift in the operations. Our hypothesis will also test whether this is really true or is it just a word that is floating around and have the organizations really changed in a manner that they function.

7. Methodology?

7.1 Testing if the hypothesis is true.

Hypothesis testing which is the main purpose of this study in order to understand the impact of E-Business and E-Commerce on the organizational structural changes in the 21st century will be done by understanding the organizational structure when brick and mortar stores were used to service the customer and comparing it with the organizational structure followed to serve the consumers through the firms’ online marketplace.

For this data will be collected which will elaborate the changes that have taken place in the way companies recruit and train their resources to create an environment that allows for online commercial activities.

How these have evolved over the time will be understood along with keeping in the mind what factors have pushed them in this direction. Testing of the hypothesis will involve not only reading upon the material that explains how new age online stores, e.g. Amazon, continue to function without any real world and what their organizational structure looks like but also how stores those who have traditionally been known to exist as shops only achieved this migration and worked in the online environment.

Thus, testing of the hypothesis will involve studying all the facets that are associated with online shopping and how companies continue to give a wonderful experience to the shoppers.

7.2 Primary data collection.

Primary data collection will be based on the material that is available online regarding the shift regarding the organizational structure ever since the companies decided to opt for creating the virtual stores.

This will include the case studies undertaken by stores those which were in existence before the dot-com boom and those that were created by this boom. A comparison between the organizational structure in place for these firms would be understood.

Along with this, the data will be collected from the independent published studies that have shown the impact of E-Commerce and E-Business in terms of how the company policies are formulated and what impacts the organizational structure.

The primary data for this case study will have to be derived from the previously done researchers, both independent and company sponsored, as the impact of E-Business and E-Commerce is far and wide, and being able to see how it has affected the way in which company functions has been understood through the work of company giants or researches are done to further simplify the process.

Thus, data collection will not be done through surveys, questionnaires, etc, but we will rather employ the studies already done in this field to serve our purpose.

References

Botha, A., Kourie, D. & Snyman, R., 2008. Coping with Continuous Change in the Business Environment. Oxford, England: Chandos Publishing.

Chowdhury, A., 2003. Information Technology and Productivity Payoff in the Banking Industry: Evidence from the Emerging Markets. Journal of International Development,, 15(6).

Essays, U., 2013. The Amazon Marketing Success Marketing Essay. [online]. [Online]

Available at: https://www.ukessays.com/essays/marketing/the-amazon-marketing-success-marketing-essay.php?cref=1

[Accessed 23 February 2018].

George, J. & Jones, G., 1999. Organizational Behavior. NY: Addison-Wesley.

Jackson, P. & Harris, L., 2002. eBusiness and Organisational Change: Reconciling Traditional Values with Business Transformation, s.l.: s.n.

Periasamy, K. P., Ho, W. L., Poh, W. M. & Bok, C. W., 2002. ORGANIZATIONAL STRUCTURE FOR ELECTRONIC COMMERCE: A QUALITATIVE INVESTIGATION. Gdańsk, Poland, s.n., pp. 596-610.

October 30, 2023
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Business

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