Economics, Management, and Financial Markets

Volume 6(2), 2011, pp. 194–199, ISSN 1842-3191

CHALLENGES OF MANAGING E-COMMERCE

NATALIŢA MARIA SPERDEA

natalita-maria.sperdea@ucv.ro
MARIA ENESCU
maria.enescu@ucv.ro
MARIAN ENESCU
marian.enescu@ucv.ro
University of Craiova

ABSTRACT. The main objective of this paper is to explore and describe the type
and location of e-commerce transitions, opportunities for new commercial arrangements
for transactions, participants and constraints in the e-commerce environment, the
strategic impact of e-commerce on an organization, and the use of the Internet and
its successors for e-commerce. The paper generates insights about the fundamentals
of e-commerce fraud-prevention techniques, commercial fraud-prevention services,
key elements of an e-commerce performance improvement system, the effectiveness
of e-commerce system, and the security requirements for e-commerce. These findings
are consistent with a number of prior observations.
JEL: L81, L86, H55

Keywords: e-commerce environment, Internet, transaction, market conditions

1. Introduction

In the present paper, we focus on the advent of electronic commerce and the
internet, the security and certainty of electronic commerce, the regulation of
electronic commerce, legal problems arising through the use of electronic
commerce, and the eruption of the law of electronic commerce. The mainstay
of the paper is formed by an analysis of the development of e-commerce
services in response to changes in market needs, the adoption of the Internet
for e-commerce, changes in supply chain management introduced by e-
commerce, the international dissemination of e-commerce, and the advent
of electronic commerce. The findings of this study have implications for the
regulation of the electronic commerce environment, the dramatic rise in
electronic commerce, the global internet commerce system, the development
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of shared policy on electronic commerce procedures, and transparency in
electronic commerce. The purpose of this article is to gain a deeper under-
standing of the emergence of m-commerce, the evolution of e-commerce on
the Internet, the development of e-commerce applications, the concepts and
relationships of the e-commerce domain, and the infrastructures of internet-
based e-commerce applications. This paper begins to fill this gap by exploring
the globalization enabled by e-commerce, the importance of fulfilment in
achieving e-commerce success, the dynamics of international commerce,
changes in market conditions as a result of e-commerce, and the suitability
of the Internet for e-commerce. The objective of this paper is to emphasize
the role of governments in promoting e-commerce, challenges of managing
e-commerce, the role of government organizations in promoting and regulating
e-commerce, the growing importance of e-commerce, and the potential for
further growth in e-commerce.

2. The Development of E-commerce Services

in Response to Changes in Market Needs

Montague claims that e-commerce refers to the sale of goods and services
online. The e-commerce space is showing significant year-over-year growth.
Credit cards are the dominant players in e-commerce transactions. Encrypted
digital signatures are widely used in e-commerce and regulatory filings.1 On
Feigenbaum et al.’s reading, the increase in e-commerce has coincided with an
erosion of consumer privacy.2 Hinz and Eckert say that search and recom-
mendation tools play a crucial role in e-commerce: the consumer can easily
scan huge assortments with the help of search technology.3 Davidson points
out that the development of security protocols has aided the expansion of
electronic commerce. Public key cryptology has revolutionized electronic
commerce, and parties must consider the risks of electronic commerce. Elec-
tronic commerce raises questions regarding security of transactions, standards
and protection in an international context. Forms of etiquette emerge in social
and commercial situations, and commercial parties have at their disposal
numerous methods of communication virtually.
Importantly, this means that the majority of electronic commercial situations
can be resolved using existing legal principles. Davidson argues that the
operation of electronic commerce in cyberspace results in new circumstances.
Crimes involving electronic commerce involve the use of computers and
telecommunications. Trade organizations recognize the significance of the
electronic commerce revolution and the need to provide rules and guidance.
Electronic commerce is inherently trans-border.4
Bruce et al. insist that the rapid growth in e-commerce affects state and
local economies. The development of digital technologies and e-commerce
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has had profound effects on the U.S. economy. The greatest implications of
e-commerce have been on the ways that businesses work with each other.5
Carr focuses on use of electronic data interchange for commercial transactions.
Electronic communications are an inevitable part of modern day commerce.
The Internet provides a ready platform for commerce to flourish. Carr notes
that self-regulation should be the guiding force in the e-commerce arena,
and e-commerce uses a variety of communicative techniques. International
commerce is dependent on information technology, and a legal framework
to facilitate e-commerce is essential. “The global significance of e-commerce
is a fact, and it is important that divergent approaches to legislation and the
resulting uncertainties do not curtail the growth of e-commerce.”6 Carr
insists that criminalization of computer misuse reduces commercial risks or
dangers. The lack of a uniform liability regime for multimodal transportation
affects commerce. “The late 1990s witnessed the electronic commerce ex-
plosion widely predicted to be a vital contributor to global economic growth.
Along with other legal issues, such as recognition of digital signatures and
electronic bills of lading, providing arbitration online caught the imagination
of information technology lawyers and the net community.”7

3. The Growing Importance of E-commerce

Blanco-Fernández observes that the evolution of information technologies

consolidates recommender systems as essential tools in e-commerce. “Tradi-
tional recommender systems do not fully meet the needs of e-commerce
settings in which the users are not focused on the kind of items that may be
offered to them.”8 Du and Ruan claim that it is a challenge for the proliferation
of electronic commerce services to provide performance guarantees under
extreme overload: an electronic commerce server may be simulated as a
multi-tank system. The electronic commerce servers are a complex and vital
resource for many critical business applications. “When the electronic com-
merce server dynamics are complex and poorly modeled, or when the per-
formance specifications are particularly stringent, no solution is forthcoming.
High-performance electronic commerce server should undergo drastic changes
in their application. It cannot be modeled as a constant and handled by
constant-gain feedback control.”9 Chircu et al. assert that new technologies
for electronic commerce on the Internet have changed the spectrum of
possibilities for making transactions in the marketplace.10 Barnes et al.
contend that e-commerce businesses need to pay attention to the content of
their Web sites. “Established organizations with successful e-commerce offer-
ings may tend to be mature users who have embraced the Internet whole-
heartedly rather than as a bolt-on to their current organizational form, i.e.
they pursue advanced levels of process integration.”11 Barnes and Scornavacca
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emphasize that mobile e-commerce (m-commerce) allows e-commerce busi-
nesses to expand beyond the traditional limitations of the fixed-line personal
computer. M-commerce is a powerful way to communicate with customers.
M-commerce applications are device and carrier dependent. The boom in e-
commerce applications is due to the widespread use of PCs. the delivery of
m-commerce applications relies on private wireless communications carriers.
Mobile databases are a primary factor of m-commerce success.12
According to Hunaiti et al., e-commerce has led to many of the in-
novations in business practice. “The most important benefit of e-commerce
to society is that it keeps people in their homes, which reduces the risk of
traffic accidents and cuts pollution by reducing traffic on the roads.”13 Gkout-
zinis puts it that the contribution of electronic commerce to international
economic integration is substantial. The value of e-commerce in financial
services lies in the power that it affords to consumers. “The benefits generated
by cross-border electronic commerce in financial services justify bold insti-
tutional reforms with the overarching objective to achieve legal certainty,
less but more efficient regulation and regulatory competition.”14
Bloomfield and Fischer consider how disagreement influences the cost
of capital: it influences the cost of capital by altering the investors’ ability
to predict subsequent prices. Different forms of disagreement have different
effects on the cost of capital. The steady-state quality of disclosure has off-
setting effects on the cost of capital. “Aggregation can result in a lower cost
of capital if its primary effect is to thwart perceived errors of commission.
Disclosures that provide information about periods further in the future reduce
the cost of capital, regardless of the nature of disagreement, by reducing the
present value of the variance-increasing effects of uncertainty resolution and
perceived commission errors.”15

4. The Advantages of Electronic Commerce to Commercial Parties

Chaffey states that management of e-commerce involves prioritizing buy-

side and sell-side activities. E-commerce is a subset of e-business. Business
adoption of e-commerce is driven by benefits to different parts of their
organization. E-commerce refers to both informational and financial trans-
actions through digital media. For consumer e-commerce, the Internet is
important in identifying online suppliers. “Effective e-commerce requires a
delicate balance to be struck between the benefits the individual customer
will gain to their online experience through providing personal information and
the amount and type of information that they are prepared for companies to
hold about them.”16
What is important here is that online shopping through transactional e-
commerce can have environment benefits, while developing a new e-commerce
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strategy can be a daunting experience. According to Chaffey, e-commerce
provides new opportunities for the marketer to vary the marketing mix. The
low-value, high-volume orders are suitable for e-commerce transactions. E-
commerce servers are tailored to the needs of site owners running an e-
commerce store, while a contribution to business profitability is the ultimate
aim of e-commerce. “Delivering service quality in e-commerce can be
assessed through reviewing existing frameworks for determining levels of
service quality. Those most frequently used are based on the concept of a
‘service-quality gap’ that exists between the customers’ expected level of
service (from previous experience and word-of-mouth communication) and
their perception of the actual level of service delivery.”17

5. Conclusions

The current study has extended past research by elucidating the potential of
global e-commerce, the growing phenomena of global e-commerce, the
utilization of the web among multinational organizations, the importance of
electronic commerce in the provision of financial services, and international
governance of cross-border electronic commerce. The overall results provide
strong evidence for the advantages of electronic commerce to commercial
parties, the mind share in e-commerce business, the natural growth of Internet
commerce, the rise of the e-commerce world, and the emergence of e-com-
merce. The goal of the present study was to determine if there are relation-
ships between organizational structures for e-commerce, types of organizational
structures for e-commerce, the benefits of e-commerce, challenges of managing
e-commerce within an organization, and challenges of implementing and
managing e-commerce. This paper has provided a literature review on the
growth of mobile e-commerce, traditional Internet-based commercial activities,
the nature and trend of m-commerce applications, the rapid growth of e-
commerce, and the effects of m-commerce in the business-to-consumer value
chain. The current study set out to identify the global nature of e-commerce,
the positive effects of e-commerce for the economy, the transnational charac-
acter of electronic commerce, the Internet as an information and communi-
cations medium, and the information technology (IT) revolution in the form
of the Internet.

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© Nataliţa Maria Sperdea et al.

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