1. Running head: SUCCESSFUL BUSINESS PERFORMANCE 1
The Two Keys behind Successful Business Performance:
Globalization and the Adoption of E-commerce
Sarah T. Fleihan
Lebanese American University

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Abstract
Two major powerful social and economic trends are globalization and the widespread
adoption of ICT. They have created a new global economy determined by knowledge,
motorized by technology and operated by data. These two trends are diligently related,
both being driven by other shared forces, and each boosting the other in an accelerative
manner. The process of globalization creates new challenges and opportunities for firms.
Globalization has many positive, innovative and dynamic aspects, which have led to
greater income and employment opportunities. E-commerce is being used by the firms to
deliver their services at the locations convenient. ICT adoption fosters globalization by
reducing the cost of transaction and coordination and creating new and expanded markets
with economies of scale. The relationship between globalization and e-commerce is
complex and varied. Globalization has differential effects on business to business and
business to customer e-commerce. The global firms use the technology more intensively,
engaging in a wider variety of e-commerce activities than less global firms.
Keywords: E-commerce, ICTs, Globalization, B2B, B2C, Performance

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The Two Keys behind Successful Business Performance:
Globalization and the Adoption of E-commerce
In today’s fast-paced work environment, a new phenomenon is manifesting itself
as the dominating business model of the century. Companies are now being formed with
no physical address to adhere to, but at the same time, these companies have a global
outreach so massive that was virtually impossible a mere thirty years ago. Nowadays we
know of huge companies with a market capitalization that reaches hundreds of billions of
dollars while having no physical stores or an actual location to which client or customer
might be physically present in. Companies like Amazon.com (which at the time of this
writing had reached a staggering 177 billion dollar market cap) or Alibaba (209 billion
dollar market cap), have redefined globalization through their revolutionary e-commerce
system (Letven, n.d). Globalization and the adoption of e-commerce have created a new
global economy that changed and affected the firms’ performance.
Globalization has turned into the buzzword of the last twenty years. The rapid
increase in the interchange of knowledge and trade worldwide that is determined by
technological innovation, from the ICTs (information and communications
technologies) to shipping containers, shoved globalization into the limelight (Charrif,
2015). Koh, Fichman, and Kraut (2012) state that globalization is well-defined by the
financial substances, control in global markets and economic linkage. Globalization is a
concept of the worldwide political economy that proposes and considers fundamentally
that the entire economic motion has to be directed within an outlook and approach that
continually is global and internationally in its range. E-Commerce is an extensive variety
of online corporate businesses for merchandises and services. It is the exchange of

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services and goods among four wide clusters through the Internet. E-Commerce lessens
correspondence costs, as well as expansions adaptability in placing exercises. Global-
exchange has expanded after some time, with one theorized reason being the utilization
of advancements, for example, e-trade (Tonotci & Manshady, 2012).
Globalization
The effects of globalization have produced apprehension all around the world
concerning the course that society is moving upon. Globalization is not only about
getting rid of technical barriers and lowering operational costs; it also involves human
communication across national borders and cultures (Kreamer, Gibbs, Dedrick, 2002).
It defines the function and purpose of the national state, stressing its tactical part in
managing the adoption of divergence among the inquisitive reallocating nations,
precisely after World War two. Globalization induces the rising flow of merchandises
and persons. It also allows the diversification and expansion of fiscal and monetary
activities. Moreover, it triggers the improvement of networks, communication,
relationships and information (Tonotci & Manshady, 2012).
Moreover, globalization demonstrates an important alteration of the structure, and
nature of any international firms’ commerce. Advocates of free trade argue that it
generates new opportunities in developing, poor and wealthy nations. Globalization has a
direct and indirect effect on the firm’s performance where it impacts the firm’s e-
commerce activity levels and nature which as well has an impact on of the operations of
the running businesses. By letting each country offer its resources in the global
marketplace, free trade leads to lower prices, more employment, and improved standards
of overall living ( Crown, 2013). Welch (n.d) (chairman and CEO of General Electric

5. SUCCESSFUL BUSINESS PERFORMANCE 5
between 1981 and 2001) stated in one of his interviews: “Globalization has changed us
into a company that searches the world, not just to sell or to source, but to find
intellectual capital - the world's best talents and greatest ideas.”
E-Commerce
Totonci and Manshady (2012) define e-commerce as a segment of a superior
business model that allows an individual or firm to conduct business transactions through
electronic networks, specifically the internet. E-commerce is an electrifying and
groundbreaking adjustment to the means that trade is nowadays conducted. The
approaches of conducting business are shifting rapidly and the total number of businesses
directed on the internet is rising and will remain to flourish. E-commerce embraces any
marketable action that straightly takes place between a business, its customers or its
associates by a blend of communications and computing technology (Letven, n.d).
E-commerce has altered the practice, timing, and technology of Business to
business (B2B) and Business to customer (B2C) markets, affecting everything from
transportation patterns to consumer behavior. Business-to-Business e-commerce is much
more complex than B2C e-commerce, but it is vital to understand because it is expected
to expand B2C business in size (Koh, Frichman & Kraut, 2012).
1. B2B businesses: They can be separated into two groups: across many businesses
and within an industry. Horizontal companies which are the first type enable the
sale and purchase of services and goods among a wide-range of businesses. When
it comes to vertical B2B companies, the operations are dissimilar; they wish to
grab as many sellers and buyers in a precise industry. As more sellers and buyers
are interested in the business they offer, the B2B firm will flourish. Furthermore,

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some vertical companies plan to attract the sellers and buyers in more than one
industry. Amazon.com is an example of a vertical B2B business that offers
vertical entries vending videos, music and books. Some of the compensations that
Kreamer, Gibbs and Dedrick (2002) assured to users of B2B e-commerce
comprise:
a. Shorter transaction and fulfillment cycles
b. Lower gain of managerial costs
c. Abridged working expenses
d. Augmented business profits
e. Better inventory management performance
2. B2C businesses: There are presently several B2C e-commerce websites with
upcoming new ones all the time. Some innovative businesses show the possible
use of e-commerce to increase the trade in services and goods that will improve
environmental awareness and sustainable development to consumers.
Furthermore, some of these businesses will as well boost the drift of trade from
developing countries to developed countries. One example of an organization that
benefits from these advancements is the B2C business, “Greenbuilder.com” that
was formed to offer guidance documents and online information on how to "build
green". (Crown, 2013)
The growth of e-commerce has lowered the customers’ search costs by a huge
margin, placed downward pressure on many consumer prices, and maximized profits
through the removal of third party middle man and removed the need to spend money on
costly brick and mortar offices or stores. Due to the automation of online transactions, it

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is predicted that e-commerce will result in lower coordination and transaction costs. It is
estimated that E-commerce will expedite the expansion do existing markets or entry into
new markets and the incorporation of systems with customers and suppliers. Thus, it is
expected that the adoption of e-commerce by the firms to lead to performance
improvements of specific types. Some people view e-commerce as a more advanced and
more interactive form of catalog purchasing. MEA’s (Middle East Airlines) online
ticketing service is a form of e-commerce that removes the middle man (travel agencies),
reduces cost and has brought in over 150 million dollars in revenue in 2014 alone
(Charrif, 2014). There is also innovative indication that the internet and e-commerce may
cause a decrease in air pollution. This may aid countries reach their production targets.
Deviations that the internet has on the performance of the business may have large
positive effects for the environment. For example, each minute used up driving to the
mall uses more than 10 times the energy of a minute spent shopping on line. Online
shopping evades car tours and decreases congestion. Moreover,” The subsequent energy
savings from processes and conservation alone are 53 billion kilowatt hours per year - the
production of more than 21 average power plants - and 67 trillion BTUs value of regular
gas (67 billion cubic feet), stopping the release of 35 million metric tons of greenhouse
gases into the air.40 million metric tons of greenhouse pollution and another 10 power
plants value of energy are saved when the construction of all of these buildings is avoided
( Brynjolfsson & Smith, 2000).
Globalization and adoption of a-commerce
As global firms can achieve economies of global scale reach (the ability of the
industry to have customers in many different parts in the world), these firms are

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considered to be in a better position to make use of e-commerce. The macroeconomic
latest researches demonstrate that economies that go global devote higher rates of ICT
implementation. Because most likely companies make the investments, it is expected that
international businesses would embrace technologies such as the e-Commerce and the
Internet. Improved performance is as result of the extensive use of e-commerce by the
highly global firms; this explains the indirect effect of globalization on performance
through e-commerce of global scale reach. The internet being the fastest growing form of
information technology in modern times has managed to achieve instant communication
among economies all over the globe. Globalization with its adoption of e-commerce has
paved the way for internet companies like Amazon, Alibaba, Cyanogen Mod and even
phone companies like Xiaomi and One plus who never had a physical existence for 5
years despite managing to sell millions of mobile phones and accessories (Letven, n.d).
It has been speculated, based on theory and confined empirical findings, that B2B
versus B2C e-commerce adoption is differently affected by globalization, with B2B being
more engaged with highly global companies and B2C with less global companies.
Business-to-business (B2B) e-commerce is an example of globalization that is facilitated
by ICTs– where customers and traders worldwide exchange merchandises and services
by means of Information Communication Technologies, such as online interactions using
Internet. These connections collect, mark, and simplify marketplaces, and aid firms to
sidestep traditional supply networks and spread globally (Tontonci & Manshady, 2012).
In worldwide B2B e-commerce, many exchanges offer third-party confirmations of
dealers, sellers, and web closures, to ensure the perception of building trust signals. Such
signals can take very important parts in ensuring the trust between the seller and the

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buyer. Business to business interactions naturally upholds low-slung entry charges for
traders to raise their group of suppliers and increase the liquidity and movement levels
between the exchanges’ operators. The expenses for sellers to become part of a trade that
can be a free membership or a paid one that ranges between 300 to $700 US. B2B e-
commerce compromises the vast majority of ecommerce activity. The advantage of local
firms in B2C would be dwarfed with the high level of B2B executed by global firms; thus
leading to the adoption of the high overall commerce by the global firms ( Letven, n.d).
Reasons globalization and e-commerce are turned down by firms
As e-commerce and globalization become more tangled, buyers and sellers are
increasing their connectivity and the speed with which they conduct sales transactions.
However, globalization has a destructive effect on small businesses in developing
countries because the opening of the borders means corpus migration and extensive
competition. This denotes that the country waists some of its finest business talent, which
in turn could mean that small businesses have minor pools of human resources to select
from. Moreover, small businesses have to deliver or sell their products at a lower cost
because that is the only way that they can compete, as a result, affecting their profitability
negatively (Charrif, 2014). But it is important to denote that globalization with the
corporation of the Internet has made it easier to sell and manufacture things and widened
the opportunities to make alliances which means a small business can access expertise,
technology and products that otherwise might miss out on. Undeveloped countries have
to benefit for their natural resources and use them as a power plant to compete in the
international market (Koh, Fishman, Kraut, 2012).

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While e-commerce may have negative impacts on some international trade and
the environment aspects (electricity consumption, hazardous substances, electronic
wastes…), there are on the other hand "green" companies who are viewing e-commerce
as a tool that has a positive impact on the environment and trade. Such companies have
advanced business simulations that carry environmentally-friendly goods to businesses as
well as consumers. There are other expected environmental assistances to be extended
from the progress of e-commerce for example a drop in the need for retail store rooms
and warehouses, and a further decrease in the need for the related materials, land and
energy disbursed by these structures (Brynjolfsson & Smith, 2000)
Conclusion
The amplification of tourism, trade actions, and private financial investment are
all financial and economic indicators of globalization, the increase in the connectivity to
Internet and e-Commerce is redesigning businesses in an internationally angled
marketplace. Globalization and e-commerce have a very strong correlation as they are
supplementary components of each other. It is vital to review social-economic features in
the cooperatives’ countries when it comes to globalized business e-commerce.
Developing countries should take advantage of the technologies in the developed
countries by connecting with the developed countries through e-commerce in order to
improve their overall national GDP ( Brynjolfsson & Smith, 2000). As a company scales
up its e-commerce adoptions, it is also scaling up its revenue potential and profitability
potential, as well as its globalization efforts. When an entire economy increases
ecommerce adoption, its global outreach will by default be increased as well, thereby
increasing the impacts of globalization proportionally.

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