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C H A P T E R 4
E-environment
Table of contents
Learning outcomes 49
Management issues 49
Chapter at a glance 50
Learning outcomes
After completing this chapter the reader should be able to:
Identify the different elements of an organisation macro-environment that impact on an
organisations digital business and digital marketing strategy
Management issues
The issues for managers raised in this chapter include:
What are the constraints such as legal issues which should be taken into account when
developing and implementing a digital business strategy?
How can trust and privacy be assured for the customer while seeking to achieve marketing
objectives of customer acquisition and retention?
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Chapter at a glance
Main topics
Social and legal factors
Environmental and green issues related to Internet usage
Taxation
Focus on
E-commerce and globalisation
Case studies
4.1 The implications of globalisation for consumer attitudes
Suggested teaching and learning approaches
These are some of the key topics that can be covered with the aid of this chapter:
The importance of macro-environment factors in constraining strategy and implementation
Activity 4.1 shows how these may directly impact students.
How consumers are influenced by using the online channel
It is useful to introduce Googles ZMOT framework for how purchase is influenced online.
Figures 4.3 and 4.4 are relevant to this.
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Practical activities on cookies (Box 4.4) are helpful since they illustrate information collected on
individuals, which many students are concerned about, but perhaps do not know the detail.
Case studies
Case study 4.1 The implications of globalisation for consumer attitudes
Question
Based on this article and your experiences, debate the statement: Site localisation is
essential for each country for an e-commerce offering to be successful in that country.
A good example to illustrate this case is Durex (www.durex.com), which offers varying degree
of localisation according to the size of the market. A further example is Dell where localisation is
mainly based on language.
The answer can start by describing what needs to be localised:
Local contact points (minimum)
Arguments for localisation are as follows:
Differing cultures require different copy and content to appeal to them
Arguments against localisation are as follows:
Simple cost
It follows that localisation should be driven by the importance of the market and the perception of
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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Questions for debate
Debate 4.1 How far should opt-in go?
Companies should always use an opt-in private policy for:
(a) emailing prospects and customers;
Summary of arguments for are as follows:
May be required by law in future, if not now
Summary of arguments against are as follows:
Reduce audience for future marketing campaigns
Exercises
Self-assessment questions
1. Why is environmental scanning necessary?
2. Give an example how each of the macro-environment factors may directly drive the
content and services provided by a website.
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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3. Summarise the social factors that govern consumer access to the Internet. How can
companies overcome these influences once people venture online?
Cost of access technology
4. What actions can e-commerce managers take to safeguard consumer privacy and
security?
5. What are the general legal constraints that a company acts under in any country?
Table 4.2 includes:
Consumer data protection and privacy laws
Copy promoting goods
6. How do governments attempt to control the use of the Internet?
7. Summarise adoption patterns across the continents.
Refer to a source such as the International Telecommunications Union (www.itu.int) for the
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8. How should innovation be managed?
Essay and discussion questions
1. You recently started a job as e-commerce manager for a bank. Produce a checklist of
all the different legal and ethical issues that you need to check for compliance on the
existing website of the bank.
Suggested approach:
2. How should the e-commerce manager monitor and respond to technological
innovation?
Suggested approach:
Best to base around the concept of diffusion of innovation.
3. Benchmark different approaches to achieving and reassuring customers about their
privacy and security using three or four examples for a retail sector such as travel,
books, toys or clothing.
Suggested approach:
4. Internet access levels will never exceed 50% in most countries. Discuss.
Suggested approach:
Data in Figure 4.2, p. 187, shows that only in developed countries will the level of access be
high, for example. The International Telecommunications Union (ITU) (http://www.itu.int/ti/
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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5. Select a new Internet access technology that has been introduced in the last two
years and assess whether it will become a significant method of access.
Suggested approach:
6. Assess how the eight principles of the UK Data Protection Act
(www.dataprotection.gov.uk) relate to actions that e-commerce managers need to
take to ensure legal compliance of their site.
The personal data must be:
1. Fairly and lawfully processed:
2. Processed for limited purposes:
3. Adequate, relevant and not excessive:
4. Accurate:
5. Not keeping longer than necessary:
This is difficult to interpret what does necessary mean in this context? A company
6. Processed in accordance with the data subjects rights:
7. Secure:
Suitable security such as firewalls and log-ins should be used to prevent access to
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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8. Not transferred to countries without adequate protection:
Examination questions
1. Explain the different layers of governance of the Internet.
Dyson (1998) describes different layers of jurisdiction or governance. These are as follows:
Physical space comprising individual countries where their own laws such as those
governing taxation, privacy and trading and advertising standards hold.
2. Summarise the macro-environment variables a company needs to monitor.
These are referred to as the Social, Legal, Economic, Political and Technological (SLEPT)
factors in this chapter:
Social social trends in levels of access and what is acceptable ethical use
3. Explain the purpose of environmental scanning.
4. Give three examples of how websites can use techniques to protect the users
privacy.
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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5. What are the three key factors which affect consumer adoption of the Internet?
Cost of access device
6. The significance of the diffusionadoption concept to the adoption of new
technologies to:
(a) Consumers purchasing technological innovations.
(b) Businesses deploying technological innovations.
7. What action should e-commerce managers take to ensure compliance with ethical
and legal standards of their site?
Activity answers
Activity 4.1 Introduction to social, legal and ethical issues
List all the social, legal and ethical issues that the manager of a sell-side e-commerce
website needs to consider to avoid damaging relationships with users of his or her site or
which may leave the company facing prosecution. You can base your answer on current
issues which may concern you, your friends or your family when accessing a website.
The following answers are a small selection of what may be suggested. They are covered in
more detail later in the chapter:
Cookies
Are we limiting access to information from certain sections of society (social exclusion)?
Privacy of personal information entered on a website
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Activity 4.2 Understanding enablers and barriers to consumer adoption
Access a recent survey of attitudes to the Internet in your country. In particular, you
should concentrate on reasons why customers have used the Internet or have not used the
Internet at all.
1. Summarise and explain the reasons for the levels of usage of the medium for different
activities.
These are the main observations:
Using email for communication remains the main online activity.
2. What are the main enablers and barriers to higher levels of adoption of these different
activities and which actions should organisations take to increase adoption?
The main driver for use is identification of need and benefit marketing communications can be
Activity 4.3 Attitudes to behavioural ad targeting
Imagine you are a web user who has just found out about behavioural targeting. Use the
information sources provided by the industry to form an opinion. Discuss with others studying
your course whether you believe behavioural ad targeting should be banned (as has been
proposed in some countries) or whether it is acceptable. Suggested information sources:
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Google Interest-based advertising: How it works (www.google.com/ads/preferences/
html/about.html), which explains the process and benefits as follows:
Many websites, such as news sites and blogs, use Googles AdSense program (a
network of publishers using advertising through Google) to show ads on their sites. Its our
Activity 4.4 Government and company monitoring of electronic
communications
Write down the arguments for and against each of these statements, debate individually or
as a group to come to a consensus.
1. This house believes that organisations have no right to monitor employees use of
email or the web. Use Moreover (www.moreover.com) to research recent cases where
employees have been dismissed for accessing or sending emails or web content that is
deemed unsuitable. Is this just used as an excuse for dismissing staff?
Arguments for:
Protects companies from employee fraud.
Protects companies from time wasting activities (see the Lois Franxhi constructive
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Arguments against:
individuals privacy.
2. This house believes that governments have no right to monitor all Internet-based
communications passing through ISPs. Use Moreover (www.moreover.com) to
research action taken by the government of your country to monitor and control
Internet communications.
What action do you think managers should take with regard to monitoring employee
access? Should laws be set at a national level or should action be taken by individual
companies?
Arguments for:
Can alert them to terrorist activities.
Activity 4.5 Overcoming SME resistance to international e-commerce
For each of the four barriers to internationalisation given in Table 4.7, suggest the
management reasons why the barriers may exist and actions that governments can take to
overcome these barriers. Evaluate how well the government in your country
communicates the benefits of e-commerce through education and training.
Table 4.5 Issues in SME resistance to exporting
Barrie
r
Mana
g
ement issues How can barrier be overcome?
1. Psychological Will the investment be recouped? Do we
have the human resources?
Success stories of companies who
have become exporters can show
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3. Organisational Do we have the right structure and
responsibilities?
Do we need to open new overseas
sales offices?
Provide training on best practice
for organisational structure and
employee development.
4. Product/market Which market do we target?
Do products or packaging require
modification for overseas markets?
Benchmarking from other
countries can help address these
issues.