Essay Sample on E-Commerce: Focus on the Core Elements

Posted on February 12, 2008

Many factors contribute to a company’s success or failure. Company is defined by more than just its product or service. An effective organisation has much strength in its favour to remain competitive. Factors such as: flexibility, creativity, openness to use of technology and innovations, a balance between core and context, communication across the organisation and talented employees are a must for competitive advantage (Wignaraja 2004). It is an organisation’s ability to adjust to changing times that creates a foundation for the public to admire. Integrity is crucial. Upholding the company’s value system and word to the public remains a key facet for success. Building any strategy or campaign on this premise presents the best possible and true corporate image to the public and allows for a great amount of trust to form. This paper will explore the notion that an organisation has greater ability to focus on the core when it utilises available technologies and resources to handle its context. This may mean outsourcing some of their processes in order to gain greater optimisation. First, the organisation must have the ability to value technology and innovation. Today’s telecommunication is a triumph for human ingenuity and spontaneous order. In some parts it embodies leading edge technology like Asynchronous Transfer Mode but really it is the use of new technologies combined with older ones that makes the Internet so fascinating and vital to business. Specifically the Internet ends distance limitations and it empowers individuals in important new ways to create new enterprise (Gasman 2005, p. 2). The Internet is relatively vast in its freedom. Unlike the traditional telephone, the Internet is not charged by the mile or any distance. This brings people together.

With these technologies, makes outsourcing and seamless work flow possible (Grandt 2005). Once a company is able to focus on the core, more attention can be paid to what it values most. Literature suggests that in order to have a balance between context and core, values must stand out (Porter 1985 & Bennis 1989). This paper will examine how technology allows an organisation to focus on valued core elements like leadership and communication both of which play a large role in how well technology works for the organisation. Without effective leadership and communication, the outsourcing and logistics that utilise technology would be a skeleton in function. Core values add the flesh, the culture that makes an organisation great.

In recent years, the Internet Boom has taken over the way people see business being done. In fact, we live in a trailblazing time when everything about life is changing because of technology. Part of the job of focusing on core is to embrace technology at the core. Geoffrey Moore elaborates that in order to focus on core an organisation must “differentiate as much as possible and to assign one’s best resources to that challenge” (2000, par. 3). This action, however, can be time consuming to take away from the core. In order to complete the task, one must understand the difference between core and context. Moore points out that many companies do not know what is important, only making share holder stock go higher. What is one organisation’s core may be another’s context (Rowley 2002). He also writes, “core and context interoperate to create equality, and both are fundamental to every organisation’s effectiveness” (2000, par. 6).

Organisational success is about finding balance and in today’s age of e-commerce and enterprise, it seems that it is expected that technology will aid in creating this balance. It is believed once the balance is achieved that one can focus on the core including continued maintenance of the balance between context and core. By challenging certain tasks to technology and outsourcing, an organisation can focus on elements of competitive advantage like leadership and communication. Below will be examples of how Countrywide Financial Corporation and other entities like Global Home Loans achieve this balance through technology and data re-sourcing allowing management to focus on its culture and employee growth.

As the act of doing business becomes more innovative due to new technologies and high levels of communication, it is surprising that doing business become more complicated and expensive. Is it the factor of elevated expectation and competition from global markets, it is a lack of understanding your own organisation and its cores? Angelo Mozilo believes that outsourcing creates room for improved focus upon core values and it is with the implementation of high speed communication and data systems that enables people to better interact with each other (2002, par. 3). It allows for context to be processed outside the core, only to return when needed. Outsourcing is much like a double-edged sword, it can be seen as a negative as much as a positive. Many believe that it is stealing from American jobs to use cheaper labour sources in countries like India. Timothy Smith surmises that outsourcing has three functions in making organisations more efficient, effective and reduces costs. “Outsourcing enables organisations to reallocate resources” (Smith 2001, par. 3). This in turn allows the organisation to spend less time on those tasks, saves it money in labour and location by changing focus from survival to enhancing competitive advantage. An organisation can only do this when it becomes people focused (Ahmed & Sharma 2002).

Exporting organisations are also seeking ways to lower costs while increasing customer service. A relatively new approach is supply chain management (SCM). Supply chain management differs from traditional materials and manufacturing control in several ways (Burn & Hackney 2003). First, SCM views the supply chain as a single process. Second, SCM requires strategic decision-making due to its impact on overall costs and market share. Third, supply chain management regards inventories as a mechanism of last resort. Finally, it requires an integrated approach to systems. Integration results in reduced inventory and significant cost benefits (Trunick 2005). The success of SCM usually involves implementation of an information management system.

Still the model is evolving to include new innovations being used as tools. The Amorphous type of chain changes as the company introduces new strategies. This type of model best reflects the continuous flow of ideas and possibilities within the e-commerce construct or Internet medium specifically. It helps anticipate future occurrences. This aids a company’s tracking of Internet use especially when applied to advertising and promotions, as it is known “the number of businesses utilising the Internet for e-business purposes was significantly low at 28% though an further 33% were actively considering the implementation” (Ritchie & Brindley 2002, p. 2). The function of procurement within the logistics process is moving to a new plane of sophistication due to new technologies to make the job simpler. Much of it is moving to the platform of the Internet to maximise efficiency and productivity. E-Procurement is now moving from easy-to-automate tasks like invoicing generations to more complex concerns such a E-marketplace implementation, operation and electronic collaboration. Literature suggests that currently focus in on technologies that support E-procurement of direct goods that are mission critical. Also because raw materials that go into production of the finished product many account for “80 percent of a company’s expenses, the saving derived from implementing E-procurement is compelling” (Thierauf & Hoctor 2003, p. 250). In other words, E-procurement technology offers lower purchase prices to faster fulfilment cycles as well as lower administrative overhead to better control. As a result, companies realise broad, measurable benefits from the implementation of E-procurement. Companies stand to gain even more impressive results from coming generations of the technology that includes connecting to trading exchange with their own industries. This also enables a customer better informed purchases as a company learns to manage production on a daily basis. This means the capability for the supply chain to extend beyond customers and suppliers improves. This also improves the ability for the company to communicate with the customer and the supplier. This leads to new ideas and knowledge about the process as companies and suppliers work in a join environment.

Sometimes organisations look to sourcing inventory as a way to cut costs and speed up the process. GHL will find that by using the Internet as e-strategy that they can achieve multitasking on new levels, allowing for many lines of communication as once. The Internet will allow GHL to tap into a bigger supply base to ensure dependable supply and backup sources. This in turn will reduce the amount it takes to secure shipment of new products. Enterprise Resource Planning (ERP) systems are particularly valuable in new product introduction because it acts as a means of sharing information. Enterprise Resource Planning (ERP) systems are software packages that attempt to integrate the information flow within a company, solving the problem of incompatibility between systems and operating practices. The ERP system will streamline the GHL’s data flows and provide management with direct access to a wealth of real-time information. This is facilitated by the used of database technologies which will link applications together and pass relevant data between them as necessary. Any new information added to one of the system updates the other systems automatically, thus creating complete integration between them (Soh 2002 and Grandt 2005). Directory services and middle ware are used in order to connect the applications and provide an infrastructure for users to communicate with each other and connect to the sources of information. There are many benefits and drawbacks to using this method of data transportation. It is important to analyse rather not this will be good fit for a company like GHL. “A key difficulty is that departments distrust the information provided by another department, be it via an information system or some other mechanism. Therefore checking and cleaning the data should be made an integral part of the implementation” (Bonner 2002, par. 5). If ERP is integrated with the organisation’s decision-making structure, ERP can begin to deliver business benefits, impacting data delivery levels. Still its success can only be measured by the attitude of the user.

Management is a highly contested area of theory and practice. Essentially, there is a difference between theory and practice (Boddy 2002). It can be easy to confuse the two concepts of management and leadership on an organizational level. In today’s company, the role of management also involves leadership within a team structure. Managers have the responsibility to set goals, maintain moral, aid in training and communicating corporate objectives. However, this does not mean a leader cannot be a subordinate. If a company is smart, it will encourage leadership by example across the board. This instils in the employee a sense of pride and motivates them to achieve goals. A good leader like Angelo Mozilo provides vision and clarity for the team of employees. Such a leader will be able to communicate and create a rapport with their team. This connection begins at a fundamental level of human sociology where the use of story is central. Howard Gardner reflects, “the ultimate impact of the leader depends most significantly on the particular story that he or she relates or embodies, and the receptions to that story on the part of the audiences” (1995 p. 14). By telling stories, allows for a certain level of openness or vulnerability on the part of the leader and makes them human. By opening the line of communication, gives the employee knowledge of their environment and develops trust.
For managers who actively keep and open dialogue are putting their people first. They are more focused on nurturing and training. Research suggests leaders are more interested in mentoring and training their team rather than focusing on output of numbers or turn around time. This once again acts a mini-strategy to manage communication within the team. This development in team building allows for “providing people opportunities to learn from their work rather than taking them away from their work to learn” (Hughes 2004, p. 4). A healthy culture inspires options and the innovations that grow out of creativity. Still one cannot ignore times of fear.

Management sometimes creates fear on purpose or misuses it to work employees harder. This does not create positive outcomes but promotes conflict and an unstable team (Demb 2004). In other words, creates dysfunctional dialogue and a lack of communication. It is clear for management to be successful, it must communicate its vision but also create positive reinforcement. Once key members understand people’s needs, then action can be taken to improve management’s role. Only then will a leader be taken seriously. Recognising positive traits in a team member builds trust, integrity and also meets an important need while building a team. Communicating these facts actively also keeps open the dialogue and in turn, makes people more comfortable and management less unapproachable (Stowell 2005).

The leader’s role is to sell the idea of commitment within a culture even if conflict exists. Robbins defines conflict as being “a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about” (2002, p.384). The traditional school of thought believes that conflict should be avoided at costs where as a modern way of thinking takes into account human relations and how human relations form over time within the organizational construct. With conflict comes the chance communication between employees will become more difficult or fail completely. Every person behaves differently when presented with conflict and the response can create dysfunctional situations. This dysfunction can hinder group performance and make everyday details difficult to see (Demb 2004).

Communication can lead to misunderstanding but so does lack of action. Sometimes it is not evident that taking action could have changed the outcome. What is important to an organization is that they follow through with every possibility (Miller & Whitney 1999). This is where employees pick up on non-verbal communications from management. If a leader appears not to be concerned, then more than likely the team members will not be either. Internal cues, both verbal and non-verbal are extremely important to not only success but just day-to-day functioning. In order to avoid a complete break down in communication, one recommendation is to institute effective, reliable leadership because that will build trust and communicate skills (Stowell, 2005). First leadership must be put in place then a change of policy can be put into place. There must be consistency with the chain of command where both the product and the use of the product are concerned. Everyone must have the same perception of the organisation’s objective. Everyone within the organization must be on the same page. If new information should become available, there must be a policy in place where employees do not fear speaking up or sharing this information. It must be openly communicated across the board. By having a trusting, open door policy with people creates an atmosphere of safety where communication can take place. It is only when people fear retaliation or negative outcomes, that they keep important facts to themselves. Even those who did stand up are labelled whistle-blowers and this has a negative dysfunctional outcome. So it is important for the health maintenance of the organisation to implement a policy of open communication where everyone stays on the same page. Also another idea is to have a program of due diligence where people back each other up and support each other through periods of conflict (Body 2002). This will enable teams to have not just one chain but multiple chains of communications where information is double-checked and triple checked before put into use. This will ensure that any new issues or mistakes are found and addressed before they are put into real-world situations. This can also lead to teams thinking outside the box to create new innovative ideas to fix the problems. By building this type of culture, allows the organisation to maintain a high level of integrity with the public but to also remain competitive within the market.

Competition is brutal and the market continues to shrink due to communication technologies. It is important in leadership to embrace change and stick to a vision. By having leadership skills one can “recogise the physical and mental signs of our feelings/emotions before we can act on them meaningfully and constructively” (Eby Ruin 2004, par. 20). It is by recognising these attributes that one can build an effective team structure. A leader acts as a coach to not only reinforce the game plan with directions but also encourage creativity, new ideas and acquiring new skills. This paper explored the notion that an organisation has greater ability to focus on the core when it utilises available technologies and resources to handle its context. This paper examined how technology allows an organisation to focus on valued core elements like leadership and communication both of which play a large role in how well technology works for the organisation. Without effective leadership and communication, the outsourcing and logistics that utilise technology would be a skeleton in function. Core values add the flesh, the culture that makes an organisation great.

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