Page 418 - Introduction to Electronic Commerce and Social Commerce

406 12 Implementation Issues: From Globalization to Justification, Privacy, and Regulation

MANAGERIAL ISSUES panies, or products on websites or blogs can lead to
charges of libel—and libel can stretch across countries.
Some managerial issues related to this chapter are as follows: Issues of privacy, ethics, and legal exposure may seem
tangential to running a business, but ignoring them puts
1. Which investment analysis method should we adopt for the company at risk of fines, customer dissatisfaction, and
EC justification? The precise estimation of total cost of disruption of an organization’s operations. Privacy pro-
ownership is a good starting point for financial investment tection is a necessary investment.
analysis. If an intangible benefit such as enhanced cus- 6. How can intellectual property rights be protected when
tomer service and quality assurance of purchased material it comes to digital content? To protect intellectual prop-
is the primary contributor to productivity increase, man- erty rights such as video, music, and books online, we
agement has to include it in the analysis. However, if the need to monitor what copyrights, trademarks, and patents
benefit can be measured quantitatively, such as creation of are infringed upon over the Internet. Portal sites that allow
new revenue and/or reduced purchase cost, the net present pirated video and music files should be monitored. This
value and ROI can be computed with tangible benefits and monitoring may require a vast amount of work, so soft-
costs. Based on the investment analysis, the intangible fac- ware agents should be employed to continually inspect
tors may be considered additionally for managers’ multicri- any pirated material. The risk to the business that can be
teria judgments. Since there is high uncertainty in estimating caused by the infringement and the possibility of legal
future revenue creation, the best or worst case analysis may protection as well as technical protection by current regu-
supplement the most likely analysis. lation and potential new common law should be analyzed.
2. Who should conduct the justification? For small proj- Consider settling any suit for damages by negotiation.
ects, the project team, possibly in cooperation with the 7. How can a patent in EC be purchased? Some people
finance department, can do the analysis. For a large or com- claim that patents should not be awarded to businesses or
plex project, an unbiased outside consultant may be used, computer processes related to EC (as is the case in some
although it may be expensive. The justification should European countries). Therefore, investing large amounts
include both tangible and intangible benefits and costs. of money in developing or buying EC patents may be
However, some vendors may provide ROI calculators as financially unwise in cases where patents may not be
part of a proposal that might fit with your application with- granted or protected properly. Some companies that own
out extra charge. many business model patents have been unable to create
3. How can EC go global? Going global with EC is a very business value out of these patents.
appealing proposition for companies of all sizes, but it may 8. What is the ethical principle of protecting the privacy
be difficult to do, especially on a large scale or for SMEs of customers? To provide personalized services, compa-
that lack the necessary resources. Companies need to iden- nies need to collect and manage customers’ profile data. In
tify, understand, and address the barriers to globalization practice, the company has to decide whether to use spy-
such as culture, language, and law, as well as customers ware to collect data. Collecting data may make customers
and suppliers. An e-business needs to decide on a localiza- unhappy (as in the cases of Google Street View or Face-
tion strategy. Some companies, such as eBay, acquire or book privacy settings). The company needs well- established
establish local companies to support local customers, principles of protecting customer privacy: Notify custom-
whereas other companies only support the English lan- ers before collecting their personal information; inform and
guage site. In B2B, a business may create collaborative get consent on the type and extent of disclosures; allow cus-
projects with partners in other countries. tomers to access their personal data and make sure the data
4. What legal and ethical issues are of concern in an EC are accurate and securely managed; and apply some method
initiative? Key issues to consider include the following: of enforcement and remedy to deter privacy breaches. In
(1) What type of proprietary information should we allow this manner, the company can avoid litigation and gain the
and disallow on our site? (2) Who will have access to long-term trust of customers.
information that visitors post on our site? (3) Do the con-
tent and activities on our site comply with laws in other
countries? (4) What disclaimers do we need to post on our SUMMARY
website? (5) Are we using trademarked or copyrighted
materials without permission? Regardless of the specific In this chapter, you learned about the following EC issues as
issues, an attorney should periodically review the website they relate to the chapter’s learning objectives.
content, and someone should be responsible for monitor-
ing legal and liability issues. 1. The need for EC justification. Like any other investment,
5. What are the most critical ethical issues? Negative or EC investment (unless it is small) needs to be justified.
defamatory articles published online about people, com- Many start-up EC companies have crashed because of