EBay: Organizational Design - Case Study Example

However, this industry has growth increasingly competitive and with the recent "coopetition" trend whereby either closely aligned companies are co-operating with each other to let down the other competitors or competing to fight for the larger chunk of the market, an it is difficult to survive in this industry. Luckily, the industry barriers to entry are high due to the high levels of investment involved but the instance of Google's marketing strategies against E bay, and E Bays reaction by pulling out ads from Google show that it is a very difficult industry to survive in even though the returns on investment are high at this point in time.

At a business week blog, one of E-bay disgruntled customers has complained regarding their experiences with Paypal, which is an acquired company of E Bay. The customers complained Paypal's mismanagement of funds that eventually led to cash flow problems for the company and their clients for the upcoming year! Since 1997, Internet Fraud is another issue that the E commerce companies have to deal with and guard against. As stated in Answers.com, between January and October 1997, Internet Fraud Watch received 141 complaints about auction sites.

As Susan Grant of the National Consumers League told Internet World, "The problem basically is that auction sites really don't take responsibility for the sales if they go bad. They merely put the buyer together with the seller." (http://www.answers.com/topic/ebay'cat=biz-fin)An Ethical Situation Facing The Company and How To DealAlthough EBay claims no responsibility for the items sold, the company must monitor the items sold to ensure the company remains in compliance with state-wide laws and regulations as well.

EBay does not allow weapons to be sold but parts such as scopes can be purchased. Since the law requires a background check and waiting period before a gun can be purchased, if EBay allowed the sale of guns on the site, not only would they be breaking the law but could possibly be liable if someone purchased a gun and harmed someone.But if EBay was to allow these sales to take place on the site and someone was injured, it could open doors for lawsuits, not to mention violations of state and federal gun laws.

Recommendations to deal with these issues:It is an important for E Bay to deal with Internet crime and take more responsibility for the items that are sold on its website. For this purpose it is recommended that the legal matters should be outsourced completely to some law consultancy that specializes in cyber crime and is well acquainted PART II: JOURNAL QUESTION CHow might increased sales or increased revenue impact your organization's pricing strategy and market potential'After viewing the information found on the EBay website, I determined EBay uses activity-based costing system.

Since EBay is an online auction, and products, goods and EBay does not provide services, activity based costing could be the best method to use as opposed to operating-based costing. Because they are not completely service based. EBay has storefronts, which hold merchandise on consignment until sold. The fees associate with