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E-business has many definitions, but it is essentially "the use of networks and information technology to electronically design, market, buy, sell and deliver products and services worldwide". E-business is in its "infancy" and that it is currently taking its first steps which are "tentative" and "unsure". This is perhaps a little dated in some respects because the e-business rate of change would suggest that it is growing up quickly, albeit with ethics trailing behind somewhat. There is still a great deal of excitement and buzz about e-business, perhaps due to its unregulated nature - "a free marketplace for the exchange of ideas and products" (Maury & Kleiner, 2002).
All businesses operate in a climate of insecurity, be that financial or otherwise, and are under increasing pressure to report on the 'triple bottom line' - "in which financial performance must be matched by environmental sustainability and social responsibility…and so on" (Longstaff, 2003). In traditional businesses, an element of trust is apparent -from dealing with other businesses, to suppliers and even customers. The notion of trust is tied to the ethical framework of the business because trust implies individual morality and values and a business is made up of individuals. To have trust in an individual and to be trusted in return is a part of society's expectations.
With the speed at which e-business is developing, "trust is becoming increasingly harder to establish and maintain" (Daughtrey, 2001). The lack of face-to-face interaction in transactions and the anonymity of the Internet result in an impersonal style of business where trust must be implied but is not necessarily there. Daughtrey (2001) notes that deliberately falsified information is also more difficult to detect.
Again on the subject of trust in e-business, Daughtrey (2001) refers to the conditions consumers expect when conducting business with or purchasing from the Internet:
- Generalised reputation or perception of supplier.
- Customer expectations for security, privacy and confidentiality.
- Assurances provided by supplier (such as certifications or guarantees).
- Reports of other customers. If the customer has a history of prior transactions, additional factors may be:
- Accuracy of order fulfilment.
- Timeliness of order fulfilment.
- Nature of any interactions with customer relations.
- Resolution of any disputes.
- Subsequent communications from the supplier.
- Any communications from other suppliers with whom customer information was shared.
Also, good media and the 'name' and 'logo' can be valuable for building trust (such as magazine promotions, etc.) wherever there is a third party advising customers - this can be a huge trust indicator. Amazon.com quickly became the leading on-line book retailer because it was referred to by the media and articles were written on its success. Also, successful on-line businesses are those that were once traditional businesses; that is, they have already built the business and are now transferring to the new business environment - these companies have a head start in terms of consumer/ customer trust.
The level of insecurity regarding on-line transactions is interesting given that many face-to-face transactions are just as insecure, if not more. Take a restaurant bill for example; when a credit card payment is made the receipt kept by the establishment has both the credit card number and the signature included. While these receipts are often kept in secure locations, a great deal of trust is required in the establishment to ensure the details are not used fraudulently. On some occasions and with certain e-businesses, it may even be safer to transmit payment information on-line due to the security measures in place (encryption, secure web sites, etc.). To further highlight this advantage, consider the postage of cheques and money orders in the 'snail' mail and consider the number of potential dangers that mail will encounter during its delivery.
The use of credit cards is a perfect example, as mentioned above, where there has been much concern about giving credit card details over the net. On this note, it is safe to say that credit card fraud tends to happen in every business environment - it is not particularly an Internet issue alone. For example, credit card numbers appear on shop receipts and so does the signature. This allows the risk of a staff member or customer potentially having access to the details. Again, as mentioned above, transmitting this kind of information over the Internet is possibly safer than the traditional method of handing over the card. There is talk now of assigning pin codes to credit cards for Internet transactions, so credit card fraud is being addressed. Also, due to security concerns, many businesses will continually monitor security and increase security measures as any fraudulent actions could potentially cripple the business in terms of consumer trust.
Methods for dealing with on-line security: without delving into technical detail, e-businesses are constantly dealing with new security risks and hence having to develop advanced methods of minimising these risks. Actions taken include encryption, and developing digital certificates or signatures (to identify the consumer so he or she can proceed to enter data). The Australian Taxation Office now allows tax returns to be lodged on-line (called e-tax). In order to ensure the lodger is the person they claim to be, questions are answered to which only the ATO should be able to verify. In this way, the return can then be lodged with confidence.
E-businesses who apply good ethical principles are aware of the notion of trust implied in on-line transactions and business dealings. Keeping up to date with privacy and security issues and ensuring good authentication practices are maintained on the web site indicate that the e-business is an ethical one. It would be too simple to say that the company is merely trying to reduce the likelihood of financial loss. The author believes that a company that puts into place these elements is behaving ethically.
It may be worth adding that there are other factors involved in building trust in on-line environments. Consider web site design and layout; often a very attractive and well planned web site gives the indication that the company is around for good and invests in good communication methods, hence trust is implied. Even for companies with excellent reputations, a poor web site can actually repel customers.
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