ITGS Syllabus

Monday, February 13, 2006

Topic 29

Increased globalization, for example, EFT, EDI, e-commerce by Aditya Kumar

Electronic commerce (also referred to as EC, e-commerce or ecommerce) consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. It can involve online marketing, supply and also electronic funs transfer (EFT), inventory management systems; automated data collection systems and electronic data interchange (EDI). As per Forrester Research, electronic commerce generated sales worth US $12.2 billion in 2003.1

General Pros

Electronic data exchange eliminates costs that are usually incurred as a result of publishing, printing or producing hard copies of something. This is can promote unethical behaviour in that it is simpler to engage in piracy with electronic information rather than hard copies. This is because it is difficult without fairly sophisticated equipment and expensive software to ‘electronify’ data from hard copies. Another benefit of globalization in the form of electronic data transfer is efficiency as a result of minimal time wasted. Through quick processors, data can be transferred quickly and also no time is wasted in printing information. Another way that this technology can save time is because one has the power to track the origin of the information which they are receiving thereby reducing time spent corresponding with the sender of the information.


Companies also adopt this technology as a means to save money. For example, a company probably will save money in the long run by saving on publishing, shipping, and handling costs. Two parties can communicate with each other quickly, being efficient, and also clarify information that they receive to be true. Another reason why companies might embrace this technology is because it might aid in the sales of their products. A customer needn’t go through the hassle of going to a shop. He is satisfied just sitting at his computer and making his purchase. Firewalls and encryption tools make electronic transfer of information reliable and secure. It is a smart way to keep customers satisfied and hungry for more.

Instance of problems with technology

According to Wikipedia, the set up of networks to engage in the electronic transfer of information can work out to be quite expensive. Also, another disadvantage is that the high speed of electronic data interchange can result in the reception of an invoice before the actual reception of a good. This might work out to be cheating someone else because one is forced to pay for something he is not yet sure he has received.

Ethical problems

E-commerce could also be through the form of advertising a product on the web. A flaw with this is that anyone can post any information on the web and can misinform people about a product. This is unethical in that a consumer can be conned into buying the product which is not truly what it claims to be. By doing this, one stems the sales and channels business to itself. Also unfair is that data can be manipulated by anyone who can manage to hack into a server. Also, is the question of funds exchange over the internet. Many times, companies like E-bay, which co-ordinate the selling of goods by one person to another, refuse to take responsibility for sellers who con people. Sometimes packages are delivered without any contents.

Also, the refusal to take responsibility allows for people to cheat one another often and without difficulty. Another flaw with this is that people are required to pay for a good with their credit card before actually receiving the shipment and checking to see the contents of the package being shipped to you. Since it is easy to change information on web pages, someone with access can very easily modify electronic data without being tracked. Also done by some is to fraud others by finding a credit card number, lying that it’s secure and using that number to buy products from somewhere else. This is of-course not done by reputed companies.

Some people might not be able to fight the urge to intercept data and use it to their advantage. A way to combat this might be encryption but in a rivalry between two large companies such as Apple and Microsoft, both probably have encryption battling algorithms in their arsenal allowing for one to profit from the other’s innovations. So essentially, globalization in the form of electronic commerce has both its pros and cons when it comes to ethics.

1Definition and data from Forrester Research on e-commerce according to Wikipedia


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