The Impact of E-business on Employment Characteristics - Case Study Example

A critical evaluation of the impact of e-business on employment characteristics over the past 5 years for the UK Course Name University Name Professor’s Name 18th March, 2014 Outline: Introduction Discussion Conclusion References Introduction E-business or electronic business, involves the operating of business on the internet. The operations include buying, selling, serving customers and collaborating with the business partners (Amor 2009, p. 83,). With the technological advancement many businesses have resulted to the web to purchase and sell their merchandise, carry out sales promotions and even undertake market research that relate to their clients. The emergence of social media has accelerated the e-business and the marketing on the web has been made much easier. According to Badger (2013, p. 8) the e-business gives a firm the much needed convenience, availability and global reach because many potential customers have access to the internet. Examples of the companies that have already exploited the e-business successfully include the, Ebuyer of UK, Amazon.com and Dell computer. The business sectors reaping benefits of e-business include the travel companies, many airlines have with models that allow their passengers to book flights online and subsequently pay for the flights over the web. The e-business has been experiencing growth due to the new security measures which ensure that the transactions being carried on the web are secure. The emergence of digital certificates which can be accessed by both individuals and firms has ensured there is adequate security for transactions on the web. This paper discusses the aspects of e-business design, access, management and e-business models and further the impact of e-business on employment characteristics over the past 5 years for the UK. Design of e-business The aim of any businessman is to have a business that is growing and achieving its set goals. For the goals to be achieved there are strategies which are set to ensure that the business meets it objectives and reaches the targeted clients/customers. For this to be achieved the business environment need to favourable. In the e-business the same applies. For instance, there are many potential customers for the e-business on the internet, reaching these customers needs a good business design that aligns the operations of the business, promotes the acceptance of the business to the customers and fosters confidence among the clients which helps the business to trade virtually (Timmers 2008, pp. 3-8). According to Afuan and Tucci (2010, p. 264) a business design is the architecture of the business and its network of partners in the creation of market and ensuring value for its customers in order to ensure the business realises profit and remains sustainable. Afuan and Tucci (2010, pp. 269-271) argue that for an e-business to remain sustainable and profitable, the design should comprise of the following components: Product Customer relationship Network (infrastructure management) Financial aspects Product A business design should first start by setting up the product which is to be sold in the virtual market. The product is the value the business wants to offer to its customers. For example the product of Amazon.com a renowned e-business company is the books. To come up with the product the various components of the market mix (price, promotion) are considered. The value of the product is done through value preposition and customisation of the product to reach the intended clients (Paul 2007, pp. 37-41). Customer relationship After establishing the product and its value preposition, there is a need to get a feel of the customer, serve the customer and establish a long lasting relationship (Afuan & Tucci 2010, p. 271). Many e-businesses assume this component due to mentality that the internet is flooded with many potential customers. Through the customer relationship, the firm should set its own brand and develop an online interaction platform. Today the interaction between the firm and the customer has been made easier by the social media such as facebook, twitter and other social sites. Thus a firm needs to open a social site where it can interact freely with its customers. The social sites are also great for marketing and sales promotion. Infrastructure management In the e-business a good network infrastructure should be developed which will ensure easy interaction of the firm and its customers. According to Afuan and Tucci (2010, p.274) the infrastructure involves the value system configuration that aides in the delivery of the value preposition. In e-business the infrastructure involves a business website that is detailed and allows easy use and at the same time being secure. The infrastructure should be convenient for posting a request and subsequent processing and closing of the transaction. Financial component The aim of business is make profit by selling its products to the customers. There is the need of the firm to translate the value of its products into money and thus generate incoming revenue streams. The firm in e-business should set up an appropriate pricing mechanism and payment medium in order to ensure that the business gets revenues. E-business Access and Management The e-business is anchored on the technological developments of the internet technology, the World Wide Web, intranet, extranet and other internet technologies. The concept of e-business surfaced first in 1997, this was according to IBM when it termed the e-business as a core to the transformation of the business processes using technologies of internet. Technological advancements imply that there is access to information on the internet which makes it a good market place for businesses (Martinez, 2008). It is this concept of internet that has resulted to the e-business models have cropping up. Over the internet there are e-shops, e-malls, e-procuring, e-auctioning and virtual communities of users and consumers. In general, the e-business is the process of buying, or exchanging products and services through computer network. Thus the access of the e-business is through the web, the internet, intranets and extranets or combination. Electronic payment systems have also been set which ensure the parties can engage in an online transaction which is fast and safe. The basis of e-business is the transactions of goods and services taking place through either business to the consumer or business to business interactions. E-business models The e-business models describe the way an organization creates and delivers its product to the customer. Some of the most commonly used models in the e-business include: Storefront model Auction model Portal model Dynamic pricing model Storefront model This is an e-business model that enables buyers to purchase goods and services from the sellers on the web. The storefront models provides a platform where the buyer can request for a product, then a transaction processing takes place and security checks are made on the net (Paul 2007, pp. 39). After that an online payment takes place. Under this model, there are two technologies applied to ensure that smooth transactions take place. They include the shopping cart technology and online shopping malls. Under the shopping cart, there is an order processing technology which allows the customer accumulate the list of the items they intent to buy as they shop. This means that there is a product catalogue, a database technology and server for the merchant. The other technology under this model is the online shopping malls. This technology allows the customer to have a wide selection of products and services that are under one shop. After the selection the processing of the request and payment is effected online, online shopping malls offers convenience as customers can make multiple purchases in one transaction. Auction models The auction models are online e-businesses which provide a forum on the web; internet users meet online and assume the role of bidder or seller (Timmers 2008, p.6). The sellers post items or the products they are willing to sell and wait for potential buyers to bid. If the seller accepts the bid price of the bidder a transaction takes place. The buyers then pay for the product and the shipping charges through a MasterCard or any other accepted mode of payment. The product is then shipped to the buyer. Portal model These are sites which the buyers can visit on the internet; the portal model of e-business gives the buyer the chance to look virtually everything they want at one place. After getting the products they desire, the order is processed, payment made and the delivery procedure initiated. The e-models provide the means through which a transaction can be completed. The main challenge with the models is when it comes to the payment. There have no set standard of payment and some payment procedures take a long time to be completed which may delay the transaction. Despite of the models, the issue of trust and security has been a major impediment to the e-business. To overcome this challenge, FedEx a global leader in logistics has come up with a model that allows clients to monitor the shipment of the items. This has boosted their customers’ confidence. Other e-businesses need to set mechanisms which will foster the confidence if the businesses are to thrive. Impact of e-business on employment characteristics in UK Over the last five years, the e-business in UK has been accelerating; the reason behind the growth has been due to the easy access to the online market that has wide world reach and the ability of the buyers to have a quick shopping without having to walk from one outlet to the next. Over the last five years the e-business has improved the trade balance and matching of skills between the employment and labour force in UK. It has led to the UK’s economy reaping the benefits productivity in the industries that the e-business has had major influence (Badger 2013, pp. 17-19). The overall effect of the e-business on the employment in the UK has been a creation of balance of new jobs that have been created directly and indirectly and job losses that have been lost due to some employees and workers e.g. retailers being replaced by the e- business. The e-business has had a mixed effect on the employment. There have been arguments that the e-business has led to many people losing their physical employment due to the virtual trade, this argument may have some grounding as some of the sectors have been affected and some jobs have been replaced however, the effect of e-business on employment in UK cannot be substantially pointed to having led to loss of jobs, e-business has also resulted to new businesses which have employed many people (Badger 2013, pp. 18-19). For instance some sectors e.g. financial sector, advertising, travel and transport and the related sectors have been affected by e-business, as a result some of the employees have become redundant and have consequently lost their jobs. On the other hand, the e-business has led to expansion of ICT related sectors and as a result created more jobs, these sectors include the businesses related to content, goods and services that relate to the information, entertainment, software and digital products, these sectors have created employment. This means that job losses have been experienced in some sectors while other sectors have created the jobs, hence striking some balance. E-business has had both direct and indirect effect on employment. There are many businesses outfits being started to engage on e-business and offline business, these businesses create new job opportunities both online and offline as the two can be carried out simultaneously. E-business creates new markets and even extends the market beyond the traditional borders; this means that there is enlargement of market and expansion of the firm which directly has a positive effect on the jobs. The e-business has also resulted to indirect effects on the employment in UK. The indirect effects have a lot of trickle down effect on employment due to different channels followed by e-business (Benjamin & Wigand 2009, pp.107-112). For instance, the intermediate goods traded on the web create jobs indirectly based on the volume of electronic transactions. The price elasticity that is being experienced due to the transactions has led to increased demand of industries such as software, publishing, music and online services in UK. The expansion of these industries has led to a multiplier effect to the industries that are interlinked to them. The inter-sectoral linkages and the growth opportunities in the e–business have had an overall growth in the employment. In the UK, the media related industries, computing technology industries and the telecommunication industries have resulted to an integrated supply chain that is involved in the production and subsequently delivery of the multimedia and information substance. Both the direct and indirect employment that is related to e-business in UK revolves around these content sector industries and the internet infrastructure (Badger 2013, p. 17). In the political circles and mass media in UK, growth of these industries has been considered as great hope when it comes to job creation. In the past five years, the e-business has partly displaced traditional markets, it has also resulted to changes in the production function and made production less labour intensive, which means that that some people losing their jobs e.g. in the financial intermediaries such as banks. The e-business may have displaced the traditional markets but at the same time it has created new markets which are less labor intensive but whose multiplier effect has created more jobs. Examples of jobs cut by the e-business include jobs in the travel agents, postal services and physical distribution jobs. Conclusion E-business is a new revolutionary way of conducting business over the internet. It entails setting up of business design, strategies and ways to access the goods and services through different models over the internet. The e-business has resulted to customised products and reduced the long chains of supply. It has affected large sectors of economy in UK such as communication, finance and retail trade. Generally the e-business has had an immense impact on the employment characteristics in UK over the past five years, some jobs have been lost and others created due to the emergence of the e-business. References Afuah, A. and Tucci, C. 2010. 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