Page 419 - Introduction to Electronic Commerce and Social Commerce
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Key Terms                                                                                       407

              incorrect or no justification. In its simplest form, justifica-  EC.  These  protections are needed  because  the theft or
              tion looks at revenue minus all relevant costs. Analysis is   replication of intellectual works on the Internet is both
              done by defining performance and comparing actual per-  simple and inexpensive. These actions violate or infringe
              formance to the desired metrics and KPI related to organi-  upon copyrights, trademarks, and patents. Although the
              zational goals.                                   legal aspects seem clear, monitoring and catching viola-
             2.  Issues in global EC. Going global with EC can be done   tors remains difficult.
              quickly and with a relatively small investment. However,   7.  Privacy, free speech, defamation, and their challenges.
              businesses must deal with a number of different issues in   B2C companies use CRM and depend on customer infor-
              the cultural, administrative, geographic, legal, and eco-  mation  to  improve  products  and  services.  Registration
              nomic dimensions of global trading.               and cookies are two ways to collect this information. The
             3.  Reasons for EC success and failure. Products, indus-  key privacy issues are who controls personal information
              tries, sellers, and consumer characteristics require differ-  and how private it should remain. Strict privacy laws have
              ent metrics of EC value.  With the growing worldwide   been passed recently that carry harsh penalties for any
              connectivity to the Internet, EC economics will play a   negligence that exposes personal or confidential data.
              major role in supporting buyers and sellers. Like other   There is ongoing debate about censorship on the Internet.
              innovations, EC is expected to go through the cycle of   The proponents of censorship feel that it is up to the gov-
              enormous success, followed by speculation and then   ernment and various ISPs and websites to control inap-
              disaster before the reality of the new situation sets in.   propriate or offensive content. Others oppose any form of
              Some EC failures are the result of problematic website   censorship; they believe that control is up to the individ-
              design, lack of sustained funding, and weak revenue mod-  ual. In the United States, most legal attempts to censor
              els.  Success  in  EC  has  come  through  automating  and   content on the Internet have been found unconstitutional.
              enhancing familiar strategies, such as branding, morph-  The debate is not likely to be resolved any time soon.
              ing, building trust, and creating value for all trading part-    8.  The future of EC. EC is growing steadily and rapidly,
              ners by enriching the human experience with integrated   expanding to include new products, services, business
              and timely information. EC investments can go beyond   models, and countries. The most notable areas of growth
              the traditional business models by creating digital options.   are the integration of online and off-line commerce, mobile
              To ensure success, complementary investments must be   commerce (mostly due to smartphone apps), video-based
              made in managing change and responding to cultural dif-  marketing, and social media and networks. Several emerg-
              ferences among EC users.                          ing technologies, ranging from intelligent applications to
             4.  Small and medium-sized businesses and EC. Depending   wearable devices, are facilitating the growth of EC. On the
              on the circumstances, innovative small companies have a   other hand, several factors are slowing down the spread of
              tremendous opportunity to adopt EC at little cost and expand   EC such as security and privacy concerns; limited band-
              rapidly. Being in a niche market provides the best chance for   width, and lack of standards in some areas of EC.
              small business to succeed. A variety of Web-based resources
              are available for small and medium- sized business owners
              to get help to ensure success.                    KEY TERMS
            5.  Understanding legal and ethical challenges and how to
              contain them. The global scope and universal accessibil-  Business ethics
              ity of the Internet create serious questions as to which ethi-  Copyright
              cal rules and laws apply. Ignoring laws exposes companies  Copyright infringement
              to lawsuits or criminal charges that are disruptive, expen-  Cost–benefit analysis
              sive, and damaging to customer relations. The best strat-  Digital rights management (DRM)
              egy is to avoid behaviors that would expose the company  Ethics
              to these types of risks. Important safeguards are a corpo-  Fair use
              rate code of ethics stating the rules and expected behaviors  Intellectual property (IP)
              and actions and an Internet acceptable use policy.  Intellectual Property Law Key performance indicator (KPI)
             6.  Intellectual property law. EC operations are subject to  Opt-in
              various types of intellectual property (IP) laws, some of  Opt-out
              which judges have created in landmark court cases. IP  Patent
              law provides companies with methods of compensation  Platform for Privacy Preferences Project (P3P)
              for damages or misuse of their property rights. IP laws  Spyware
              passed by Congress are being amended to better protect  Web analytics
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