Utilizing E-business at Ocean King Transportation Co., Ltd.

Literature Review

Factors Affecting E-Business Success

Factors which tend to inhibit small businesses from making full use of electronic communications include the cost of implementation, lack of funds available for the effort, and lack of in-house expertise and experience.  On the other hand, small businesses also have advantages in venturing into e-business.  They tend to be more flexible, can implement changes quickly and efficiently, and their centralized decision-making often gives them an edge in implementing major organizational shifts (Karjaluoto & Huhtamaki, 2010).

Probably the single greatest factor in successful implementation of e-business strategies is the role of the owner/manager of small firms.  When the owner/manager is entrepreneurial in nature, he or she tends to be innovative open to risk, flexible, and willing to make changes. When the owner/manager is more conservative in nature, some or all of these characteristics may be missing, making it more difficult for substantive changes in structure and organizational orientation to be implemented with ease. Other key characteristics of the manager that contributes to e-business success include what level of skills and motivation the management has, plus whether the management perceives the benefit of e-business for the organization.  Critically, evidence shows that lack of awareness of the benefits of e-business may be one of the greatest barriers to its implementation in a small business environment.  Furthermore, the more technologically competent the management, the more likely it is that establishing a successful e-business presence will be a priority for the organization. The bottom line is that evidence demonstrates that the approach the owner or manager has toward technological change in particular, that is, whether he or she is proactive or reactive—is the most decisive single characteristic that determines e-business success (Karjaluoto & Huhtamaki , 2010).

Other aspects of the owner/manager of a small business can affect success also. Many owners lack any specific technological training before starting their business, which can control their attitude toward technological changes. There are also gender differences with women being concerned about customer response to any e-business implementation; men tend to be more concerned about any perceived difficulties in implementation (Karjaluoto & Huhtamaki , 2010). In terms of resources, Karjaluoto & Huhtamaki ( 2010) noted that the lack of resources, both financial and labor, can limit e-business implementations. The limited availability of human resources for implementation tends to also limit how much training and employee development can be done.  Furthermore, the overall cost of implementation in terms of set-up, vendor training and customization, and ongoing maintenance of software solutions can put e-business solutions out of reach for smaller firms. With that said, however, costs are falling substantially for quality e-business software, and outsourcing some or all of the e-business solutions can lower the technological barriers too (Karjaluoto & Huhtamaki , 2010).  Figure 2 illustrates how these various factors interact with various levels of e-business applications.

Another key influence  in success in e-business is whether the organization has a market orientation, which considers not only what customers want, but also what competitors are doing.  Such a market-orientation tends to increase the likelihood of the organization and its management of being interested in and committed to e-business development  (Karjaluoto & Huhtamaki , 2010).

Other studies confirm the conclusions of Karjaluoto and Huhtamaki regarding the critical nature of the CEO in e-business implementation success.  In case studies of e-business implementations of small organizations in Korea, Jeon, Han, and Lee (2006) noted key success factors for success in that environment. The factors identified by these authors included (Jeon et al., 2006):

  • How much knowledge the CEO had of IT and e-business;
  • Relative advantages and benefits of e-business for that company;
  • How much government support the company had;
  • The company’s overall globalization strategy; and
  • Korea-specific factors, primarily derived from North Korea’s impact.

These authors also noted that some factors commonly ascribed as important had little impact on success or failure of e-business implementations in Korea. These included the size of the business, how much it cost to adopt an e-business solution, and the impact of pressure from competitors in the industry (Jeon, et al., 2006).
Jeon, et al. (2006) concluded that one of the critical factors that would increase e-business implementations in Korea would be increasing the availability of highly trained and competent e-business professionals. A second issue would be to educate CEOs and other management of small firms on the importance of implementing effective e-business applications. A third issue is whether the government can increase the availability and the quality of the infrastructure required by e-business. (Jeon, et al., 2006).

As an interesting side note, Jeon, et al. (2006) note that increasing the e-business success in small and mid-sized companies might well have substantial political benefit by improving the communications and cooperation between firms in North and South Korea. The authors believed that such electronic and IT cooperation might well be the best hope for easing political tensions between the two countries (Jeon, et al., 2006).