Discuss the limitations of electronic mode of doing business. Are these limitations severe enough to restrict its scope?
Answers
Low personal touch : High-tech it may be, e-business, however, lacks warmth of inter-personal interactions. To this extent, it is relatively less suitable mode of business in respect of product categories requiring high personal touch such as garments, toiletries, etc.
Incongruence between order taking/giving and order fulfilment speed : Information can flow at the click of a mouse, but the physical delivery of the products takes time. This incongruence may play on the patience of the customers.
Need for technology capability and competence of parties to e-business : Apart from the traditional 3R’s (Reading, Writing and Arithmetic), e-busienss requires a fairly high degree of familiarity of the parties with the world of computers.
Increased risk due to anonymity and non-traceability of parties : Interest transactions occur between cyber personalities. As such, it becomes difficult to establish the identity of the parties. Moreover, one does not know even the location from where the parties may be operating. It is riskier, therefore, transacting through internet.
People resistance : The process of adjustment to new technology and new way of doing things cause stress and a sense of insecurity. As a result, people may resist an organisations plan of entry into e-business.
No, the above limitations are not severe enough to restrict its scope because websites are becoming more and more interactive to overcome the problem of ‘low touch’. Communication technology is continually evolving to increase the speed and quality of communication through internet.
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Answer:
e-business has its own limitations as discussed below
(i) Low Personal Touch e-business lacks the warmth of interpersonal interactions and personal touch for satisfaction of customer. Thus, it is relatively less suitable mode of business for product categories requiring personal touch for convincing the customers such as garments, etc.
(ii) Incongruence between Order Taking/Giving and Order Fulfillment Speed In e-business orders can be placed at the click of a mouse, but the physical delivery of the product takes time. Customers are sometimes not patient enough to bear with this incongruence. At times the users even get frustrated due to technical reasons when web sites take unusually long time to open.
(iii) Need for Technology Capability and Competence of Parties to e-business e-business requires the parties to be fairly familiar with computers and internet. The digital divide has thus limited the use of e-business.
(iv) Increased Transaction Risk Internet transactions occur between cyber personalities and it is difficult to establish the identity of the parties or know the location from where the parties may be operating. e-business is also risky due to additional hazards of impersonation and leakage of confidential information such as credit card details. Problems of 'virus' attacks and 'hacking' also pose security concerns in e- business.
(v) Resistance to Change The process of adjustment to new technology and new way of doing things causes stress and a sense of insecurity due to change. As a result, people may resist a change from traditional business to e-business.
(vi) Ethical Fallouts Companies use an 'electronic eye' to keep track of the computer files, e-mail account and the websites visited by their employees or others who use their network systems which is not considered right on ethical grounds. But most of the limitations of e-business discussed above are in the process of being overcome. Websites are becoming more and more interactive to overcome the problem of 'low touch.'
Speed and quality of communication through internet is being improved through communication technology innovations. Efforts are on to overcome the digital divide through setting up of community tele-centres in villages and rural areas with the involvement of government agencies, NGOs and international institutions.
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