Business The Electronic Commerce Way example essay topic

INTRODUCTION The point to ask oneself before embarking to discuss the role of entrepreneurship in electronic commerce is what is entrepreneurship and what is electronic commerce? Once this question has been answered and understood, then digging deeper into the two terms is recommended for further understanding of the concepts. Longenecker et al pg. describes an entrepreneur as "those individuals who discover market needs and launch new firms to meet those needs". While Hindle, Legge (1997) pg. 80 describes entrepreneurship as "a managerial process of opportunity realisation through a creative approach to resource control". In essence, therefore, entrepreneurship is all about pursuing opportunities by providing or creating innovations that possess a market niche or market potential.

Longenecker pg describes electronic commerce as "the paperless exchange of business information via the internet. It is the means of conducting business transactions that traditionally have been carried out by telephone, mail or face to face in brick and mortar establishments". Emergence of new technology has led to new and various ways of conducting business especially now in the 21st century. Thus, the purpose of this paper is to separately view entrepreneurship and electronic commerce and then view how electronic commerce affects entrepreneurship. ENTREPRENEURSHIP It is known that an entrepreneur takes charge of a certain project that will deliver valuable benefits and bring it to completion.

He or she also manages risk in that he or she reduces the risk that the other stakeholders if any would bear. By this, we see that the entrepreneur has some advantage. By this, we mean that the personal risk that the entrepreneur carries is less than the risk any other stakeholders would have had to achieve the same result. Many people have been attracted to entrepreneurship by very many various reasons. The most common reason is the issue of one becoming independent, their own boss. This is usually so because people want to do or run things their own ways, set up their own schedules, make their own decisions and reap their own rewards.

Another reason is making money. This can be because they are not satisfied with the wages that they receive when working for someone else. Another reason is having or gaining personal fulfilment. That is, they view their newfound work or business as fun, they end up being respected by the community and peers if that was their intention.

This need for independence, making money and personal fulfilment has led to various varieties of entrepreneurship as identified by (Longenecker). Some of these are entrepreneurs such as women entrepreneurs, founder entrepreneurs, administrative entrepreneurs, plural entrepreneurs, artisan entrepreneurs and many others. With this brief overview of entrepreneurship, therefore we now look at electronic commerce. ELECTRONIC COMMERCE As stated above, electronic commerce is the communication or doing of business via the Internet. This means that electronic commerce is generated from the Internet. So, what is the Internet?

According to Longenecker pg this is "one huge, loosely connected computer network that links smaller networks all over the world through modems, phone lines, satellite links and other communication models". As cited by (Ka lakota, Robinson 1999) technology has now been regarded as the actual cause and driver in forming business strategy in the 21st century. This means that electronic commerce now poses as the most significant challenge to the business model. This is because technology is being used to innovate, entertain and enhance an entire experience surrounding a product. The evolution of electronic commerce has led to many benefits to the small firms as described by (Longenecker). Some of these benefits are like offering firms opportunities to compete with bigger businesses in terms of geographic area.

This is because electronic commerce allows any business to access customers almost anywhere. Another benefit is enabling small firms to build upon their customer relationships. This is through an electronically based system that emphasizes on customer relationships specially customized for firms. Electronic commerce has also led to evolution of various business models. This includes business-to-business models where businesses do businesses with each other, that is, they are each other's customers. Business to consumer models where businesses do business with the final consumers or customers of the product or service and auction site models where businesses offer participants both final consumers and businesses the ability to list products for bidding by potential buyers.

With this brief overview of electronic commerce, its benefits and models, this paper will now focus on how the evolution of electronic commerce has affected and still affects entrepreneurship. GLOBAL ELECTRONIC COMMERCE Electronic commerce is important in the 21st century because the economic process is characterised by a strong internalization of markets, globalisation of corporate strategies and increasing mobility of capital and know how thus becoming more and more an important part of the global economy and is currently representing according to research done more that 2% of business worldwide. The success of the wireless Internet access that was pioneered in Japan points to the potential that this technology holds for bringing the population online. With this medium already out in the market and rapidly evolving, the door is wide open to limitless possibilities for electronic commerce to the agile entrepreneur. Access to the network is useless without the appropriate skills to run it and the knowledge to use it. Internet literacy is still a challenge thus the importance of integrating computer-training skills in the businesses for the potential to be achieved.

According to (Mansell 2001) awareness is one of the biggest barriers to electronic commerce adoption by micro and small firms. Thus there is a need to urge the governments to make special efforts to encourage the use of the internet and electronic commerce by small and medium sized firms by using awareness and assist initiatives aimed at increasing access information, training and other skills. Young entrepreneurs with increased awareness to electronic commerce, right knowledge and skills of using electronic networks are well placed to act as agents of change in development. According to (Arroyo 2001) fostering a digital culture is usually driven by a range of factors such as effective entrepreneurship, protection of intellectual property rights, active capital markets, access to high level and strong research infrastructure and also a regulatory environment that promotes innovation and investment. This will in turn make technology the backbone of economic development.

Strategies, which strengthen entrepreneurship and up-and-coming firms, could have a remarkable impact on initiatives for development. (Chowdhurry 1998) has identified this by claiming that this can be done by linking up local and national entrepreneurship programmes to international data sources on technologies, funding sources, markets and trade practices. This in turn leads to how the business sector can get involved in such strategic initiatives. BUSINESS SECTOR INVOLVEMENT A supportive business climate is a key element to promoting entrepreneurship.

If the business sector is supportive of new initiatives, this in turn augurs well with encouraging entrepreneurship. (Chowdhurry 1998) considers this a good thing because entrepreneurs end taking risks in the pursuit of higher incomes for themselves and high-value jobs for the employees they hire. The business sector can provide a supportive environment by ensuring entrepreneurs have appropriate access to capital, skills training, knowledge of market systems, cheap access to basic internet applications like e-mail and web browsing, developing new and lower cost products that provide these basic application and that use alternative means of connecting to the net. They can also assist small enterprises to get on-line and participate in global electronic commerce, that is, by these enterprises becoming suppliers or retailers of the big firms' products.

Also by developing local content, that is, creating websites on information about the country's needs for example number of people looking for employment, geographical areas that have potential for certain products, tourist attractions, and many others. ENTREPRENEURS AND ELECTRONIC COMMERCE Globalisation has allowed for the transfer of technologies across national borders, the rapid setting up of new technologies, and the large-scale movement of financial capital in support of the circulation of new technologies. However, worldwide forces need to be placed in the service of ability structure for sustainable development. Job creation and equal chipping in by all are steps towards this goal.

Entrepreneurs are key broadcasters of technological change because technological change consists of devising new goods and new ways of producing existing goods and services thus leading to economic development. (Chowdhurry 1998) views one traditional role of entrepreneurship especially in developing countries is the transfer of technology. This is by identifying technology that can easily be incorporated and adapted to various situations. He goes on further to say that the traditional strategy has been to identify entrepreneurs who are willing to receive technology from elsewhere and equipping them with appropriate and proven technology. Electronic commerce has significant impact on support of young entrepreneurs and in the maintaining of small firms.

This is in terms of long distance learning and assisting young entrepreneurs and small firms engage in various different activities at low costs. Such activities include entrepreneurial skills, technology transfer, access to sources of finance as well as knowledge about markets and trade regions. Looking at business in a global context, we see that networks bring about partnerships of manufacturing and service firms that are held together by some common interest. Which bring about relationships of trust among them thus enabling them gather and share information and resources.

This leads to the understanding of what a network is all about. Chowdhurry (1998) describes it as "a locus or space in which the circulation of free information is fostered, the information is filtered and adapted to the requirements of the different network members. It is one organised into a relatively formal partnership, the network provides access to shared information". A good example identified is an Internet site (web page) for entrepreneurs, a discussion group called ENTER-L (web). This site contains relevant information for young entrepreneurs. (Chowdhurry et al, 1998).

These young and small firms face various barriers when it comes to doing business the electronic commerce way. This can be like lack of time, skilled specialist staff and financial resources to access the large quantities of collective information available in and outside the market. Thus such sites as the one mentioned above come into good use or are advantageous when it comes to issues like financial resources that is lack of money for creation of extra departments like research and development. Small firms would save on costs by just accessing such networks when they only need information occasionally and when the need arises. In addition, as young and up coming entrepreneurs cannot afford to take big risks, networks create a manageable operation room in which these entrepreneurs can monitor information flows as well as potential changes and risks in the business environment. Thus being able to access and do business on the Internet, training and experience are necessary to an effective search for and use of information technology.

(Chowdhurry 1998) has shown that these knowledge breaks are becoming more and more available on-line from the entrepreneurial on-line community. Electronic networks are not just settings for effective information gathering, but rather extend various advantages. Chowdhurry (1998) has identified some of these advantages as that they are more cost-effective communication strategies, very important for technology transfer and other exchanges (business wise), an excellent setting for entrepreneurial and small firm capacity building, used for distance learning, product research and as a collaborative workspace. There is always a bad side to every good side thus there are various disadvantages of such networks.

(Mansell 2001) has identified several of them. One of them is the protection of individual privacy in terms of use of specialised software for tracking and auditing business deals as a result creating the prospective for amassing of detailed user profiles presenting a threat to individual privacy. Another is consumer protection whereby the Internet is of borderless nature therefore creating challenges to the putting into action of traditional consumer laws, policies and practices. Another major disadvantage facing electronic commerce is on-line fraud. The importance of electronic commerce for the global economy is increasing as the value and quantity of data is growing as a result these data is becoming vulnerable to unauthorised access and use, misappropriation, alteration and destruction. These disadvantages have led to various ethical values that entrepreneurs need to follow.

Some of these values have been identified by (Legge, Hindle 1997). The most important value that has been emphasised on is honesty! honesty! honesty! This means making an active effort to avoid dishonesty whether by outright lie or concealed fact. This is because when doing business on the Internet there is the belief of doing business with a faceless person thus no personal feelings towards the other party. This value is not only to be extended to customers and suppliers but to employees and competitors as well. Another value raised is trusting strangers and foreigners.

This does not mean being carelessly indifferent to the risk of fraud and deceit. Having a background check on a potential customer is being prudent, thus approach the potential customer with a possibility of creating an important business relationship. If there are no grounds for a business relationship, then the potential customer has become a contact because of the politeness displayed. An additional ethical value is not attacking or sabotaging competitors. This can be by destroying competitors through vandalizing of their websites or by soiling their reputation in society. Competition is to be done on an even playing field thus if one sees that their competitors are better at satisfying customers, then one must set a standard that they must rise to.

Another vital ethical value is by one being optimistic, that is, being optimistic globally but pessimistic about details. This is to say that entrepreneur's global optimism is that the business can succeed but whenever risks can be avoided or reduced by judgement and planning, they must be. With all this then we can summarise by saying that when electronic commerce obstacles are dealt with, then it can provide new and vast opportunities for businesses to essentially streamline their business processes through transformation of raw materials, components, products and services. CONCLUSION To conclude therefore, we see that for electronic commerce to be integrated into entrepreneurship or in a nutshell into doing business then the government can create a favourable environment by reducing red tape that hampers people from starting their own businesses. The government can also provide access to capital for entrepreneurs and emphasising on the importance of using new information and communication technologies to starting and doing business. There should also be an emphasis on training people about entrepreneurial business enterprises by the use of various electronic settings or networks.

With the world moving into the dot. com era the more widespread the reach of the global digital economy, the greater will be the opportunity for individual firms, entrepreneurs, small firms to grow and profit with a thriving and well working global community.