The document provides a comprehensive overview of electronic commerce (e-commerce), tracing its development from the Berlin airlift to the modern internet era. It identifies key drivers such as technological, social, economic, and political factors, and outlines the significant impact of e-commerce on various business areas, including marketing and finance. The document also discusses the benefits of e-commerce for organizations and consumers, along with its limitations.

1. Foundation of e-commerce-basic introduction
Electronic commerce( e- commerce) is a relatively new area of business management and information
technology and is continually changing with the technological advancement. E-commerce has four driving
factors- social, technological, economic, and political and impact upon a wide range of different areas.
“Electronic Commerce (EC) is where business transactions take place via telecommunications networks,
especially the Internet” (Turban et al., 1999).
Originating from the electronic transmission of messages during the Berlin airlift in 1948, the next stage in the
development of e- commerce was electronic data interchange (EDI). In the 1960s, the first attempt at common
electronic data formats was made by cooperation between industry groups. However, the formats were only
used for purchasing, transport and financial data and were mainly used in intra- industry transactions. It was
not until the late 1970s that national standards for electronic data exchange (EDI) began to work, which
developed well into the early 1990s.
Reference:
E. Turban, J. Lee, D. King and H.M. Chung, Electronic Commerce: A Managerial Perspective. Prentice Hall, 1999.
According to Vladimir Zwass, editor- in- chief of the International Journal of Electronic Commerce, ‘electronic
commerce is sharing business information, maintaining business relationships and conducting business
transactions by means of telecommunications networks’.

3. Originating from the electronic transmission of messages during the Berlin airlift in 1948, the next stage in the
development of e- commerce was electronic data interchange (EDI). In the 1960s, the first attempt at common
electronic data formats was made by cooperation between industry groups. However, the formats were only
used for purchasing, transport and financial data and were mainly used in intra- industry transactions. It was
not until the late 1970s that national standards for electronic data exchange (EDI) began to work, which
developed well into the early 1990s.
With the advent of Internet, the term e- commerce has gained a broader concept that includes:
• Electronic trade in physical goods and intangibles such as information.
• All the steps involved in trade, such as on- line marketing, payment ordering and delivery support.
• Electronic services, such as after- sales support or legal advice online.
• Electronic cooperation support for companies such as collaborative online design and engineering or virtual
business consulting teams.

4. Key Drivers of e-commerce:
These key drivers can be measured against a number of criteria that can highlight the progress of e- commerce
in each of the countries concerned.
Technological factors– The extent of advancement of telecommunications infrastructure that provides business
and consumers with access to new technology.
Social factors– Incorporate the level and progress of IT education and training that will enable potential buyers
and employees to understand and utilize the new technology.
Economic factors– Include and contribute to factors, the nation’s general wealth and commercial health.
Political factors– Include the role of the government in the development of government legislation, initiatives
and funding to support the use and development of e- commerce and IT.
Impact of Electronic Commerce:
E-commerce impacts on many business areas and business management studies disciplines.

5. Marketing– Online publicity issues, marketing strategies, consumer behavior and cultures. Direct marketing is
one of the areas in which it has an impact.
Computer sciences– development of different network and computer technologies and languages to support
e- commerce and e- business, e.g. connecting front and back office legacy systems to web- based technology.
Finance and accounting– online banking; transaction cost issues; accounting and auditing implications where'
immaterial' assets and human capital need to be tangibly assessed in an increasingly knowledge- based
economy.
Economics– the impact on local and global economies of e- commerce; understanding the concepts of a digital
and knowledge- based economy and how it fits into economic theory.
Production and operations management– The effects of online processing have reduced cycle times.
Production systems are integrated with the marketing of finance and other functional systems, business
partners and customers.
Reference:
V. Zwass, ‘Structure and macro-level impacts of electronic commerce: from technological infrastructure to
electronic marketplaces’, http://www.mhhe. com/business/mis/zwass/ecpaper.html.
Video link: https://www.youtube.com/watch?v=mZ7Vefzh2hU

6. Key Points
1. Key drivers of e-commerce
• Technological factors
• Social factors
• Economic factors
• Political factors
2. Major areas that e-commerce impacts-
• Marketing
• Computer sciences
• Finance & accounting
• Economics
• Production and operations management
• Management information systems
• Human resource management

7. • Business law and ethics
3. Benefits of e-commerce to organizations-
• International marketplace
• Operational cost savings
• Mass customization
• Reduced inventories
• Lower telecommunication cost
• Digitization of products and processes
• 24-hour availability
4. Benefits of e-commerce to consumers-
• 24/7 access
• More choices
• Price comparison

8. • Competitive environment
5. Limitations of e-commerce-
• Lack of adequate system safety, reliability, standards and protocols.
• Ever-increasing competition
• Problem of flexibility with older and newer technology
• Cost of access to Internet
• Cost of computing equipment
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