Effects of Ecommerce on Business, Government and Society

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Introduction

Studies conclude that half of the Internet users all over the world have bought a product or a service online. Evidence that online buying is on the rise is found in the research and reports of eBay addicts and online recreational shopping. As a matter of business, government and society concern, online shopping behaviors defy normal consumer choice processes.

It also inflates consumer prices while aggravating abuse of consumer credit, all of which have significant social (Coupey, 2004). This paper seeks to take a comprehensive look at the legal and ethical issues relating to ecommerce. It will outline the relationship of ecommerce to business, government and society.

The current ethical issues and legal viewpoints in relation to ecommerce will be discussed. Finally, the paper will give suggestions for corrective action pertaining to ecommerce. This paper supports the hypothesis that ecommerce promotes unregulated or uncontrolled buying.

Learning theory models of buying

The fundamental cause of compulsive, impulsive and addictive buying is lack of self regulation in a consumer. Learning theory has been employed to explain the path taken by these disorders as they evolve from impulsive, then to repetitive and finally to compulsive behavior. Impulse buying is spontaneous, unreflective and immediate buying of products after learning about them.

It is the kind of buying behavior exhibited by most online shoppers. In the view of classical learning theory, this is caused by emotional response to thoughts. This has the effect of temporarily suppressing the thought of negative consequences (Black, 1996).

The negative consequences are replaced with the thought of satisfaction, pleasure and excitement. Compulsive buying is created by continued neglect of long term impacts as a consumer starts to suppress anxiety and depression with increased buying.

As a result, life problems continue to mount and shopping continues to be used as a relief for compulsive buying. Addictive buying is close to compulsive buying and the two result to a major lifestyle problem. In learning theory, buying is termed as addictive when a consumer increasingly craves for the relief that comes as a result of buying.

Sociocognitive theory of buying

This theory extends classical theory by asserting that consumers are aware of their shopping behavior and the consequences and are therefore able to control their buying behaviors. The theory continues to suggest that that these addictions may be controlled or abandoned through personal regulation. The self control mechanism is possible through personal observation, personal judgment and personal reaction.

Personal observation is monitoring your personal behaviors in order to understand the effects of those behaviors. Personal judgment compares personal behavior against self-standards of success or in comparison to norms, social groups and previous behavior.

Personal reaction functions by rewarding oneself with incentives for good behavior and self respect. It is engaged after observation, judgment and deviation from social or personal conducts (Black, 1996).

Controlling buying behavior

Unregulated buying behavior is caused by deficiency in self-regulation. Generally, disregarding the results of unregulated buying can be viewed as avoiding the personal reactions. The most significant phenomenon of buying disorder is giving away already purchased goods, hiding, returning or reselling. This may be explained by disruption of self reactive function.

The phenomenons are means of avoiding the personal observation produced by unregulated buying that has produced goods that are not in line with the budget or are not in the needs list. These actions also neutralize guilt that will play a good part in regulating the behavior (Cucuzza & Cherian, 2001).

Stopping or controlling buying behavior, just like Internet addiction, is difficult. Nevertheless, the success of these efforts differentiates uncontrolled behavior from normal behavior and the means of healing the problem. The regularity of uncontrolled buying behavior may be decreased by recognizing the causes of addictive buying.

Uncontrolled buying behavior may be controlled by simple actions of leaving the cash and probably using a credit card. Internet addiction may be controlled by recognizing wrong personal justifications and neutralizing wrong judgments. Addicted buyers can set goals for changing their behavior, compose reminders regarding the adverse effects and motivate themselves using avoidance incentives (Coupey, 2004).

Ecommerce and unregulated buying

Ecommerce and other related online activities are self induced and therefore depends wholly on the person. Studies indicate that each person has the ability of reversing or stopping the addiction even without professional aid.

Nevertheless, external factors in the market atmosphere may become a major drawback since they are specifically designed to do that. Ecommerce is known for its ability to undermine personal regulation, and therefore encouraging unregulated buying (Wigand & Benjamin, 2005).

The characteristics of ecommerce websites may overcome personal regulation. These websites have attractive product stimuli like big and colorful photographs of products on sale, audio and video clips.

These are some kind of stimuli used by online marketers to change the buying behaviors of consumers. Some ecommerce websites have chat rooms that engage consumers on online chatting luring them to buy the products (Wigand & Benjamin, 2005).

Some websites are characterized by very effective e-mail exchanges that create a virtual environment for negotiating with a sales representative. Some websites contain promotion packages and online but tangible gifts. This takes away guilt that would otherwise control the uncontrolled buyer. According to existing theories of electronic marketing, ecommerce should encourage and reinforce personal control, but the opposite is true.

Ecommerce has supported itself with the fact that online buyers exhibit rational economic choice behavior. This means that they ecommerce offers an opportunity of cutting down the cost of transaction or even the expense associated with searching a product, but still, the consumers are able to get their products.

Most online buyers are impulsive; seek more variety, inconsiderate to risks and are not conscious to brand and price. In the US and UK surveys identified a considerate size of impulsive online shoppers.

The total number of impulsive buyers ranges from a quarter to three quarters of total online consumers. In this regard, ecommerce draws a lot of impulse buyers that eventually evolve to become compulsive and then addicted consumers (Chen, Ingraham, & Jenkins, 2004).

Research has not been conducted to provide empirical evidence relating compulsive and addictive buying with ecommerce. Nevertheless, Internet addicts have been found to have compulsive buying habits compared to the general population.

It is therefore my argument that those Internet shoppers are promoting unregulated buying. Internet has been found as one of causes of depression. This may disregard personal regulation and therefore ecommerce will promote unregulated buying (Coupey, 2004).

Impacts of ecommerce on business and the society

The ability of a company to conduct its business online or electronically is called ecommerce. Essentially, the company has an electronic shop, where products are displayed, advertized, sold and paid for electronically without human processing. Ecommerce has revolutionized the business atmosphere since products can be updated instantly, added and changed to match the needs of consumers.

The advantage of ecommerce is the convenience that comes with these websites. A customer can execute a secure shopping online within a short time with fast verification of credit card. This has caused an explosion within the ecommerce business since more consumers can be served within a short time. In essence, ecommerce is not about the technology, employing technology to run a business (Donthu & Garcia, 1999).

An advantage of ecommerce is accessibility to the global market in that a potential buyer is able to shop anywhere in the world without any geographical limitation. Ecommerce websites run for twenty four hours meaning that time difference between different geographical locations is no longer an issue.

Ecommerce has the tendency of cutting out the middlemen in that businesses are able to trade directly with consumers without involving the middlemen. The implication of this is that the customer is able to buy cheaper and the business is able to make a bigger profit (Donthu & Garcia, 1999).

Ecommerce is associated with an equal and fair playing field for businesses, both huge and small. All companies can place their products online with a small cost of designing and maintaining the website, and the rest is just business. Ecommerce provides a twenty four hour economy or as some would say a round the clock economy.

Processing of transactions is fully automated, a shop may be closed at night but a website is never closed. Ecommerce has a greater ability to satisfy the customer than a physical shop somewhere in town. Ecommerce websites allows customers to take charge of their transaction.

The customer can review the products, ask for assistance, view the product performance and this becomes a powerful tool for developing customer loyalty (Wigand & Benjamin, 2005).

Another global trend critical to ecommerce is online marketing. This can be incredibly great way of marketing through email, search engines and blog sites. The buyer is able to interact with the seller easily allowing the seller to keep the customer informed. The business is also able to advertise cheaply compared to other media. In addition, the business is able to benchmark itself against its competitors, this easily convinces the customers.

The business is able to analyze its customers by tracing their location details and the goods they are interested in. This gives the business an advantage of understanding its customers better and makes future business to be run easily.

The customer is also able to understand the supplier deeply. In addition, there is more of information that the customer can get from the website than what can be conveyed by the word of mouth or by a telephone conversation.

Ethical implications of ecommerce

Businesses or companies wishing to trade online through ecommerce will be faced by a number of ethical challenges. Businesses tend to overlook these ethical limitations after meeting some technical challenges. Ecommerce encourages sale of illegal goods in an unregulated manner.

This is because it has some privacy than going into a store to buy the goods. The people engaging in an illegal transaction converse in private online messaging and close sales (Cucuzza & Cherian, 2001).

Although it’s unethical to sell drugs, ecommerce provides an environment whereby drugs can be traded. It is hard to trace these kinds of transactions and therefore ecommerce can encourage occurrence of crime. When carrying out face to face transaction, it is not possible to sell alcohol and cigarettes to minors.

Ecommerce encourage unregulated environment that may encourage sale of alcohol and cigarettes to minors. Ecommerce to some extent should not be applied in tobacco industry (Mallor, Barnes, Bowers, & Langvard, 2010).

In pharmaceutical industry, ecommerce can pose a great threat to a lot of people. Pharmaceuticals need to apply a lot of moral and ethical issues to close sales. If such sales are conducted online, it is not possible to apply these ethical issues. This means that these goods may land into the hands of wrong people who might misuse the drugs.

This is a threat to the society because drugs should only be used when they are required, and they need to be accompanied by prescriptions from qualified persons. The urge to make money is always tempting and in an ecommerce environment, the urge becomes worse.

Although it is unethical to sell Viagra to a person with a high risk of heart attack or weight losing pill to already emaciated person, ecommerce allows these evils to be possible (Mallor, Barnes, Bowers, & Langvard, 2010).

Legal implications of ecommerce

The main concerns of government on ecommerce include the growth and evolution of ecommerce, the role of consumers and the issue of consumer protection. The government has to regulate ecommerce effectively and this has raised concerns over the strictness of the regulations and their effect on business.

Legal issues regarding security of people involved in ecommerce has been a government interest for sometimes now. Ecommerce sometimes requires consumers to give their personal details regarding their credit cards, physical residence. The confidential information exchanged between the transacting parties has to be protected from hackers (Donthu & Garcia, 1999).

Effects of ecommerce on business and government

Ecommerce is a revolution, just like industrial revolution, this means that it has dire effects on business and government. Ecommerce has been diffused and applied so rapidly on global scale that it has to be regulated.

The main effect on business is that high technology companies are on the winning edge, while low technology businesses are losing. On a positive note, studies conducted in UK and US assert that an information and communication industry has cut down on inflation and projections support the assertion (Black, 1996).

The cost of ecommerce is less, a factor that is encouraging its growth. The issues of security, language and payments in ecommerce business are another issue of concern by all the stake holders.

Government intervention in ecommerce will to some extent serve to cut down business in ecommerce. Lack of government intervention will risk the interests of consumers who are very eager to shop online (Chen, Ingraham, & Jenkins, 2004).

The role of government is of significance especially in dissemination of information. The government has to come up with national strategies that will protect the interest of consumers, today and in future. Education in information technology will enable the entire society to benefit from ecommerce.

To boosts the business in future, businesses should assist schools to produce an information technology society in future. Ecommerce should be adopted by the government in provision of government services to general population (Wigand & Benjamin, 2005).

Conclusion

There is a rising concern about uncontrolled purchase of products over the Internet. This business has been described as both compulsive and impulsive, and it has been confirmed that they might constitute an addiction behavioral in nature. An up to date explanation of uncontrolled buying has been proposed whereby depression reduces the strength of self regulation.

Ecommerce has established a new link between electronic media and consumers by aiding complete and transactions. Unregulated buying in this context is abnormal forms of consumer behaviors that may lead to personal problems in future. Ecommerce promotes unregulated or uncontrolled buying and this affects businesses, the government and the society.

References

Black, D. W. (1996). Compulsive buying: A review. Journal of Clinical Psychiatry , 57, 50-55.

Chen, Y. A., Ingraham, L. R., & Jenkins, J. G. (2004). Creating value through e-commerce. Strategic Finance , 44-49.

Coupey, E. (2004). Digital Business: Concepts and Strategies (2nd Edition). New York: Prentice Hall.

Cucuzza, T. G., & Cherian, J. (2001). The internet and e-business: Trends and implications for the finance function. Journal of Cost Management , 5-14.

Donthu, N., & Garcia, A. (1999). The Internet shopper. Journal of Advertising Research , 39, 52-58.

Mallor, J. P., Barnes, A. J., Bowers, T., & Langvard. (2010). Business Law: The ethical, global,and ecommerce environment (14th ed.). New York: Irwin/McGraw Hill.

Wigand, R. T., & Benjamin, R. I. (2005). Electronic commerce: Effects on electronic markets. Journal of Computer , 23-34.

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