Effects of Electronic Business on Management in the Global Markets - Term Paper Example

? Effects of E-Business on Management in the Global Markets Effects of E-Business on Management in the Global Markets First, this paper will expound on effects of electronic business on management in the global markets, an overview of electronic business foundation and challenges related to e-business. When it comes to electronic business commonly known as the e-business, business people apply information and communication technologies to support the overall activities of their business. E-business came into being in 1996 when the marketing and internet teams of IBM coined it into their external activities. It uses tools that include online banking solutions, supply chain management software, electronic mail, websites, and web-based customer relationship management. In addition to the outlined e-business foundation, this paper will give a spectrum of the potential performance of electronic business, rang of applications of e-business, as well as innovations and implementations. Evolution of E-business on Management Evolution of globalization and competition brought about new opportunities coupled with challenges. Firms strived to discover valuable and effectual models and applications of electronic business to contribute to their growth, sustainability, innovation, and implementation. Agreeably, this is an imperative moment for successful inclusion of electronic business into global management society. The explosive growth of internet and its functions has led to creation of a network that connects people and businesses globally. It is not possible to ignore the growing importance of electronic business in this light of the prevailing dynamism of technological surroundings. Introduction of electronic commerce revolutionized markets as people can purchase goods and services online (Shaw, 2003). Corporate companies that engage in millions of transactions per annum can now interchange data. Today, electronic business has expanded to include other processes of business transactions that require electronic enhancements. Introduction of these entire internet related activities are posing serious challenges on global management. However, before looking at the opportunities electronic business poses on management globally, it is worth putting down its relevance into writing. Managers categorize electronic business as a major trend in stipulations of investment and awareness. Generally, this does not stand for a mega trend or gig trend. Overly, evaluation of relevance of electronic business depends on indicators like performance potential. In this phase, the relevance of e-business determines the benefits of its efficiency whereby this involves shifting from the existing business or traditional channels to internet. The success of electronic business initiative of a company relies heavily on the readiness of suppliers and buyers to engage in electronic interactions. This means that, every component of electronic business must align with enabling technology and strategic initiatives. Importance of E-business in the Global Markets and Its Effects on Management The key managerial system of a business trading globally is participation. Nowadays being an industry manager means being the determinant of tomorrow’s success. Therefore, in order to keep a competitive advantage and achieve the determined industrial success, managers of established companies must take on the challenges that come along with applications of electronic business. Electronic business acts as a leveraging importance of using information technology to its limits and changes the employees and administration’s way of thinking and working to a completely different level. Electronic business tools influence the initiatives taken by managers on a global scenario. Certainly, e-business application tools like intranet, internet, and extranet affect each initiative in the global market (Shaw, 2003). Management integrates these application tools into their overall global initiative to achieve rapid technological strategies that coincides with their information technology strategies. According to Moodley (2003) with e-business, companies are no longer chained to specific geographical area but global markets are unfolding and brewing up stiff competition. Managers are developing effective information technology strategies that can enable their companies compete effectively in the global market. Business competition in the international arena opens gates to not only information technological challenges, but also to other challenges that include political issues, culture, geo economic issues, and the likes. However, due to availability of personal computers and telecommunication networks, managers now have computing power and information resources that enable their companies initiate trade policies that execute firm’s objectives efficiently. These challenges associated with e-business present highlights effects on roles and initiatives of management in the global arena. Information technology is shaping how management initiates electronic business applications to overcome cultural challenges, reengineer operations, and use competitive, conservative, and aggressive strategies to administer integration. For the last thirty years, information technology has been the hallmark of economic development globally. The swift fruition of the internet as a medium of exchanging information and communication globally is a vital aspect resulting to that technical process of change. Business analysts put across that there is a close, strong, and positive correlation between information technology and national prosperity. Additionally, econometric studies show a close statistical based relationship between productivity, diffusion of information technology, competitiveness for firms and industries. Cognitively, global management is theoretically using internet to offer intent on following industry centered, export oriented, and market driven development trajectory (Moodley, 2003). This is because, internet has the most visible manifestation of economic network shift and has the potential of revolutionizing companies and firm’s way of functioning and competing in the global market. Management uses electronic business applications to acquire requisite connectivity and become global market players via worldwide sourcing and marketing. Since e-business depends heavily on internet, which is based on an open system of network, managers use this opportunity to initiate manufacturing and production advantages in order to cope with global competition. For instance, managers in the less developed countries have an added advantage over e-business and globalization. They can skip the processes and costs incurred in developing electronic business applications and catch up or forge ahead to development and initiation of these tools to achieve global market integration stratagem. Their new imperative effect on management is global connection of value of chains. However, there are global policy challenges such as facing marginalization and extreme cases that can lead to total exclusion from the economic mainstream of development. Therefore, for third world manufacturers to cope with global management related procedures, they must initiate global market consolidation, leverage, and deepen their management links with the global economy and take advantage of the potential wave of globalization (Worst, 2009). Companies that want to do business with clients in the countries faced by adversities such as poverty, managers undergo challenges that are extreme and difficult to overcome. Such cases happen in business transactions between the United States and East African countries like Kenya for instance. Nonetheless, in this era of trade liberalization and global production systems operating via information communication and technology dominated international and inter-firm networks, managers are terming effects of marginalization and exclusion as unlikely. Global management incorporates aspects of value chains within the firm into global scale where they can achieve paramount importance that is vital for fostering rapid economic growth through accessing the leading edge technology, viable global markets, and practices. Electronic business in the global markets is influencing global management initiatives since information technology has become an internationally competitive and knowledge intensive tool suitable for simultaneous integration of global production systems. Presently, the geographical distribution of internet connections and information, communication and technology diffusion favors heavily global management initiatives. There are socio-economic disparities that exist among management systems in different countries. Digital divide is the most acute product responsible for global e-business initiation. Through e-business, the new millennium has witnessed unimaginable changes in the system of business management in general as well as through electronic business such has been the given importance of free trade. In this new era of e-business, different companies have initiated diverse measures whereby they have achieved competition via the process of deregulation. Furthermore, e-business has led to privatization, which has played a vital role in answering questions of ownership, performance, and efficiency of several industries not only in the Eastern Europe, but also in Oceania, South East Asia, and Western Europe (Worst, 2009). Meanwhile, through technology the growth of some business is tremendous as depicted by growth indicators such as total revenue per annum. Countries taking part in the e-business are obtaining comparative advantages in commodity production based on cost advantages such as virtual market where previously unprofitable markets are being worth considering. Nowadays, global trade demands active companies, adaptive, as well as valuable chains of supply. The capability to achieve connection with a number of changing distributors and suppliers that can support rich multimedia transfer of information requires an evolutional extra step in order to incorporate connectivity. One of such environment is China. Chinese economy is currently growing at an average rate of 7-10 percent per annum. This is agreeable that China will be becoming a global economic powerhouse in the near future. Documented evidence reveals that, emergency of rich global network has played a big role revolutionizing the economic growth of this country. The effects of e-business in a global spectrum of management are congruent. Introduction of global interconnectedness is influencing the way managers achieve overall management initiatives. E-business has changed how business individuals interact with one another, how businesses conduct their affairs, and how governing bodies provide services to their prospective clientele. This international system of interaction has bred a very interesting and challenging angle of business activities in the global arena. The challenges posed by e-business differ with traditional system of conducting businesses, as electronic commerce requires individual based characteristics such as trust. E-business requires utmost level of trust among those involved in the whole spectrum, users, providers just to mention a few. As e-business models continue to develop, the structure of global management is triggering a dramatic transition of roles of customers in the chain of production and delivery process. Customers are no longer passive recipients of products and services but today they major in leading roles of global trading. E-business has resulted to potential transition of customer roles as being a patron to co-producer of goods and services. As a result, this new impact is bringing forth new light of solving existing problems in the global business management spectrum (Zaman, 2011). For instance, global market players are now able to solve the apparent conflict between firms’ pursuit of profit and productivity and the quality of services it provides to its potential clients. Concept of customer efficiency is the key alternate to these conflicts. E-business has provided companies with the relevant tools for transforming their system of administering activities from customer relationship management to customer efficiency management. E-business presented many different organizations with an opportunity of transforming the nature of management. It should be borne in mind that some governments in the developed countries are using e-business models to facilitate financial activities through technology. For example, the UK government embarked on a program whose aim was to ensure that this country became the global leader in knowledge economy revolution. As such, the government developed three arms of e-government, e-commerce, and e-communications. Through e-government, the UK government was able to ensure quality and efficiency while injecting government services through transformed methods that involved use of electronic delivery. It developed a policy that carried out taxation via e-commerce whereby the government was able to clarify negative issues pertaining taxation and deal with them by use of advanced technical measures (Zaman, 2011). In so doing, the UK government has been able to explore actively ways in which e-business techniques and tools can assist taxpayers in their daily activities with government departments but most importantly, taxpayers are now able to submit their tax returns via online services. Apart from the benefits e-business brings, it is worthwhile noting that it also comes along with hindrances to managerial activities of a company trading in the global market. E-business has brought stiff business competition, which has led to increased pressures business propositions that involve complex vertical and horizontal value creation processes. Initially, vertical and horizontal business propositions used to bring traditional linear value creation whereby that traditional economy viewed technology as mainly an efficiency tool (Zaman, 2011). Nonetheless, upon entry of e-business, global economic environment revolutionized and technology is just an enabler. Thus, getting excited on e-business while the proposition at hand does not necessarily or potentially benefit the firm is not worthwhile. In a global market, e-business poses serious challenges to management since the crucial aspects of businesses lie under this roof. Companies expect the management system to give ideal analytical response of market size with regard to profit margins. Adversaries of E-business in the Global Markets and Effects on Management The nature and shape of global market competition is intense. There are forces of global competition punching global market players both direct and indirect from all sides. Understanding customer dynamism in order to appreciate sustainability is also an obstacle when it comes to demand. E-business is posing challenges for accountants in a manner that is indispensable. Currently, technology is advancing vastly making it increasingly easier to transact and this is compelling accountants to provide high-leveled services for them to stay relevant. Interestingly, it is possible that at some point within this decade eliminating the finance department would be imaginable (Pride, 2011). Companies will be outsourcing payroll and purchase ledger as e-business replaces transaction processes. As such, traditional balance sheet accountants would have no choice but to resolve to collaborate with line managers, transfer into line positions, and end up educating non-financial individuals within the organization. The bottom line is, no sooner than later, accountants will be facing unemployment in some sectors. Moreover, e-business contributes to complexity in the global market since it requires high management expectations. This calls for greater visibility of management within an organization whereby failure to provide it can result in serious consequences. The process of implementing e-business initiatives is highly disruptive to staff as it involves turning almost every activity within the company. When business organizations such as marketing resolve to e-business, customer relations department must change and adapt to e-business protocols. In this case, there is severe time pressure while implementing such protocols given the idea that work does not end with the initial implementation however, e-business activities have to continue expanding and adapting. E-business breeds new e-commerce software whereby it will continue to evolve, as the project is underway. This may influence the products (Pride, 2011). New products create opportunities coupled with challenges. These challenges give notable impacts and limits of e-business success within the global market place. There is also the most notable barrier of e-business, which is language barrier. Even though e-business uses English as official communication language, majority of people globally do not speak it. There is cultural barrier, economic disparity issues, and personal computer ownership. In summary, the modern information communication and technology did away with border operations and opened up unsuspected possibilities and opportunities in creating new business relationships, management, control, and performance of business operations and processes. E-business has brought about key skills in the purpose of realizing the value of economy that is necessary for life and management system in the modern innovation oriented society through application of electronic business principles whereby venture is certainly a way of information literacy, thinking, and mathematical competence. Additionally, with e-business there have been improvements in teamwork, collaborative network, management of effective knowledge, and introduction of re-learning possibility together with continuous innovation. This paper has shown how management integrates e-business applications into their overall global initiative through incorporation of various social and cultural competences whereby organizations improve their commitment to the set objectives and customer satisfaction. References Moodley, S. (2003). The Promise of e-business for less developed countries (LDCs). International Journal of Electronic Business.1(1). Pride, W., et al. (2011). Business. Ohio: Cengage Learning. Shaw, M., (2003). E-business management: Integration of web technologies with business models. New York: Springer. Worst, J. (2009). Virtual enterprises: The impact of e-business on European construction industry. Retrieved from http://www.mbaworld.com/blr-archive/issues-64/3/index.pdf Zaman, M., et al. (2011). E-business technology and strategy: International conference, CETS 2010, Ottawa, Canada, September 29-30, 2010. Proceedings. New York: Springer. Read More