Electronic Commerce 2002: A Managerial Perspective / Edition 2

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This easy-to-read book describes what electronic commerce is: how it is being conducted and managed; and its major opportunities, limitations, issues, and risks. A blend of theory and practical applications integrates an up-to-date handbook structured around the notion that EC applications require certain technological infrastructures and other support mechanisms. Its six-part organization covers: the fundamentals and technology of EC, Internet marketing, business-to-business, other models and applications, system development and security, and implementing EC. For managers and professional people in any functional area of the business world.
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Product Details

  • ISBN-13: 9780130653017
  • Publisher: Prentice Hall
  • Publication date: 11/28/2001
  • Edition description: Older Edition
  • Edition number: 2
  • Pages: 914
  • Product dimensions: 7.84 (w) x 11.04 (h) x 1.60 (d)

Table of Contents

Pt. 1 A Real Revolution 1
Ch. 1 Overview of Electronic Commerce 1
Ch. 2 The Digital Economy 43
Pt. 2 B2C EC-Internet Marketing 83
Ch. 3 Retailing in Electronic Commerce (E-Tailling) 83
Ch. 4 Internet Consumers, E-Service, and Market Research 118
Ch. 5 Advertisement in Electronic Commerce 173
Pt. 3 B2B EC 215
Ch. 6 Company-Centric B2B 215
Ch. 7 E-Marketplace and B2B Exchanges 263
Ch. 8 B2B Support Services 308
Pt. 4 Other EC Models and Applications 351
Ch. 9 Dynamic Pricing: Auctions and More 351
Ch. 10 Service Industries, Online Publishing, and Knowledge Dissemination 391
Ch. 11 Intrabusiness, E-Government and More 435
Pt. 5 Building EC Systems 471
Ch. 12 Building E-Commerce Applications and Infrastructure 471
Ch. 13 E-Commerce Security 539
Ch. 14 Electronic Payment Systems 581
Ch. 15 Order Fulfillment, Logistics, and Supply Chain Management 632
Pt. 6 Implementing EC 673
Ch. 16 EC Strategy and Implementation 673
Ch. 17 The Regulatory Environment of Electronic Commerce 730
Ch. 18 E-Communities, Global EC, and Other EC Issues 785
Ch. 19 Mobile Commerce 823
Glossary 876
Index 891
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As we enter the third millennium, we experience one of the most important changes in our lives—the move to an Internet-based society. Almost everything is changed at home, in school, at work, in the government—even in our leisure activities. Some changes are already here, and they are spreading around the globe. Others are just beginning. One of the most significant changes is in the manner we conduct business, especially in how we manage the marketplaces and commerce.

Electronic commerce (EC) describes the manner in which transactions take place over networks, mostly the Internet. It is the process of electronically buying and selling goods, services, and information. Certain EC applications, such as buying and selling stocks on the Internet, is growing at a rate of several hundred percent every year. EC could have an impact on a significant portion of the world, on businesses, professions, and, of course, on people.

However, the impact of EC is not just the creation of Web-based corporations. It is the building of a new industrial order. Such a revolution brings a myriad of opportunities as well as risks. Bill Gates is aware of that, as Microsoft is continually developing Internet and EC products and services. Yet, Gates has said that Microsoft is always 2 years away from failure, that somewhere out there is a competitor, unborn and unknown, who will render your business model obsolete. Bill Gates knows that competition today is not among products, but among business models. He knows that irrelevancy is a bigger risk than inefficiency. What is true for Microsoft is true for just about every other company. The hottest and most dangerous new business models out thereare on the Web.

The purpose of this book is to describe what EC is; how it is being conducted and managed; and its major opportunities, limitations, issues, and risks. EC is an interdisciplinary topic and, therefore, it should be of interest to managers and professional people in any functional area of the business world.

This new edition, the 2002 edition,. is as different from the first edition as EC in 2002 is different from EC in 2000. Today, e-commerce is going through a period of consolidation, where instead of enthusiasm, careful attention is given to proper strategy and implementation. Most of all, people recognize that e-business has two parts, one of which is business, not just technology. These changes are reflected in the second edition.

In addition, people in government, education, health services, and other areas could benefit from learning about EC. This book is structured around the notion that EC applications, such as home banking, e-government, or auctions, require certain technological infrastructures and other support mechanisms. The applications are divided into business-to-consumer, business-to-business, and intrabusiness. The infrastructure is in the areas of hardware, networks, and software. The support services range from secured payment systems to logistics and legal issues.

This book is one of the first texts entirely dedicated to EC. It is written by experienced authors who share academic as well as real-world experiences, including an e-business lawyer. It is a comprehensive text that can be used in one-semester or even two-semester courses, or it can supplement a text on Internet fundamentals, on MIS, or on marketing.


Several features are unique to this book. They include:

  • Managerial Orientation. EC can be approached from two major aspects: technological and managerial. This text uses the second approach. Most of the presentations are about EC applications and implementation and are geared toward functional and general managers. However, we do recognize the importance of the technology; therefore, we present the essentials of system building and security in Chapters 12 and 13. We also provide some more detailed technology material in the appendices and on the book's Web site.
  • Interdisciplinary Approach. EC is interdisciplinary and we illustrate this throughout the book. Major related disciplines are accounting, finance, information systems, marketing, management, and human resources management. In addition, some nonbusiness disciplines are related, especially public administration, computer science, engineering, psychology, political science, and the legal field. Finally, economics plays a major role in the understanding of EC.
  • Real-World Orientation. Extensive, vivid examples from large corporations, small businesses, and government and not-for-profit agencies all over the world make concepts come alive by showing students the capabilities of EC, its cost and justification, and some of the innovative ways real corporations are using EC in their operations.
  • Solid Theoretical Background. Throughout the book we present the theoretical foundations necessary for understanding EC, ranging from consumer behavior to economic theory of competition. Furthermore, we provide extensive references, Web site addresses, and many exercises to supplement the theoretical presentations.
  • Most Current. The book presents the most current topics of EC, as evidenced by the many 2000 and 2001 citations. Topics such as e-marketplaces, e-government, e-strategy, Web-based supply chain systems, and EC economics are presented both from the theoretical point of view and from the application side.
  • Economic Justification. Information technology is mature enough to stand the difficult test of economic justification, a topic ignored by most textbooks. It is our position that investment in EC must be scrutinized like any other investment, despite the difficulties of measuring technology benefits.
  • Integrated Systems. In contrast with other books that highlight isolated Internet-based systems, we emphasize those systems that support the enterprise and supply chain management. Interorganizational systems are particularly highlighted, including the latest innovations in global EC and in Web-based Electronic Data Interchange (EDI); also, collaborative commerce is highlighted.
  • Global Perspective. The importance of global competition, partnerships, and trading is increasing rapidly. EC facilitates export and import, managing multinational companies, and trading electronically around the globe. International examples are provided throughout the book.
  • EC Failures and Lessons Learned. In addition to success stories, there are stories of EC failures and an analysis of their causes.
  • Comprehensiveness and Ease of Reading. All major topics of EC are covered. Furthermore, the book is user friendly, easy to understand and follow, and full of interesting real-world examples and "war stories" that keep the reader's interest at a high level.


  • Eight New Chapters. The 2nd edition has eight new chapters covering the following topics: the digital economy (Chapter 2), e-marketplaces (Chapter 7), EC services (Chapter 8), auctions (Chapter 9), e-government, C2C, and intrabusiness EC (Chapter 11), security (Chapter 13), order fulfillment (Chapter 15), and m-commerce (Chapter 19). In addition there is a hands-on, detailed storefront building guide (Appendix 12A).
  • Four Completely Revised Chapters. Four chapters have been completely revised, these include: Internet marketing (Chapter 3), company-centered B2B (Chapter 6), Web application development (Chapter 12), and strategy (Chapter 16). All other chapters were updated, reorganized, and streamlined. The regulatory chapter (Chapter 17) was updated by a lawyer, Dr. Matthew Lee.
  • New Two-Color Design. Vivid presentation in a new two-color design that better highlights text pedagogy.
  • Hyperlinks. Hundreds of hyperlinks that illustrate many of the applications and issues have been added to the text. These will be monitored and updated on the Web site.
  • More Exercises, Including Role Playing. The number of review questions, exercises, and Internet exercises has been doubled.


The book is divided into six parts composed of 19 chapters with five supplemental technology appendices.


In this part we provide an overview of the entire book as well as the fundamentals of EC and some of its terminology (Chapter 1) and a discussion of the digital economy (Chapter 2).


In this part we describe EC B2C applications in three chapters. Chapters 3 deals with e-tailing, Chapter 4 with Internet consumers and market research, ands Chapter 5 deals with EC advertisement, which is mostly related to business-to-consumer EC.


In this part we cover the one-to-many model (Chapter 6, including auctions), many-to-many model (Chapter 7, including exchanges), and business-to-business; services (Chapter 8).


This part begins with detailed description of online auctions (Chapter 9), then it moves to service industries online (travel, stocks, banking, etc.) (Chapter 10). In Chapter 11 we cover e-government, intrabusiness applications, and consumer-to-consumer EC.


This part of the book opens with an overview of EC application development (Chapter 12). This is followed by security (Chapter 13) and payments (Chapter 14). Appendix 12A provides step-by-step instructions on how to build a storefront. Chapter 15 closes this part with order fulfillment and supply chain management coverage.


Starting with e-strategy (Chapter 16), this part deals with implementing and deploying EC. The legal environment is the subject of Chapter 17. Chapter 18 gives a glance at electronic communities as well as at several other issues, such as global EC, small businesses and EC, and EC research. This chapter also provides an overview of future EC directions. The text concludes with Chapter 19 on mobile commerce (m-commerce).


We developed a number of learning aids including:

  • Chapter Outline. Detailed outlines, "Contents," at the beginning of each chapter provide a quick indication of the major topics covered.
  • Learning Objectives. Learning objectives at the beginning of each chapter help students focus their efforts and alert them to the important concepts to be discussed. Role playing exercises were added.
  • Opening Vignettes. Each chapter opens with a real-world example that illustrates the importance of EC to modern corporations. These cases were carefully chosen to call attention to the major topics covered in the chapters.
  • Managerial Issues. The final section of every chapter explores some of the special concerns managers face as they adapt to doing business in cyberspace.
  • Key Terms. All boldface terms introduced within the chapter appear in a list at the end of the chapter and are defined in the glossary at the end of the book.
  • Chapter Summary. The chapter summary is linked one-to-one to the learning objectives introduced at the beginning of each chapter.
  • End-of-Chapter Exercises. Different types of questions measure students' comprehension and their ability to apply knowledge. Questions for Review ask students to summarize the concepts introduced. Discussion Questions are intended to promote class discussion and develop critical-thinking skills. Exercises are challenging assignments that require students to apply what they have learned, the exercises also include about 200 hands-on exercises send students to interesting Web sites to conduct research, investigate an application, download demos or learn about state-of-the-art technology. The Team Assignments are projects designed to foster teamwork.
  • Application Cases. In-text cases highlight real-world problems encountered by corporations as they develop and implement EC.
  • Real-World Cases. Each chapter ends with a somewhat more in-depth Real-World Case. Case questions follow each case study.


The following material is available to support this book:

  • Instructor's Resource CD-ROM. This convenient Instructor's CD-ROM includes all of the supplements: Instructor's Manual, Test Item File, Windows PH Test Manager, PowerPoint Lecture Notes, and Image Library (text art).
  • Instructor's Manual with Test Item File (Test Bank). This manual includes answers to all review and discussion questions, exercises, and case questions. The Test Item File includes multiple-choice questions for each chapter. An electronic version of the Test Item File is available in the form of the Windows PH Test Manager.
  • PowerPoint Lecture Notes. An extensive set of Microsoft PowerPoint lecture notes, oriented toward text learning objectives, is available for each chapter. Lecture Notes can be downloaded from the text's Web site and can be found on the Instructor's CD-ROM.
  • MyPHLIP Web Site. The book is supported by a MyPHLIP Web site that includes:

    a. Chapter Updates posted periodically to help both students and instructors stay up to date with what's happening in E-Commerce and E-Business today and how it relates to chapter material.
    b. A password-protected faculty area where instructors can download the PowerPoint Lecture Notes and the Instructor's Manual.
    c. URLs for all the major topics in the book with links to other sources.
    d. Links to a large number of case studies, including customer success stories and academically oriented cases.
    e. Links to many EC vendors' sites.
    f. Longer cases from several countries and links to many cases.
    g. Appendices A-D covering infrastructure for EC, Web page design and creation, Web programming, and intelligent agents.
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