It is quite obvious that start-up ventures today have more than the bottom line to satisfy. Various issues, be it legal, ethical, or otherwise, need to be addressed in order for the company to prosper in the long run. According to one expert (1) the following need to be addressed:
Thus, a successful company needs to address each of these and set specific rules as to how to deal with these critical issues.
It is quite obvious that e-commerce is not fundamentally much different from other forms of commerce. Here, we still recognize that all of the steps in a business relationship and transaction procurement need to be met and acceptable risks need to be undertaken. However, e-commerce enterprises present themselves with unique capabilities that may be either leveraged to one’s benefit, or serve as an impediment.
E-commerce still depends on building business relationships with other organizations. But one observes that the underlying framework for this activity changes drastically when commerce is conducted via this revolutionary medium. One observes that:
This new framework also creates distinct needs that need to be fulfilled. A business needs to, at the very least;
Fundamentally, these tasks rely on establishing one’s reputation and building trust.
Let us compare how a traditional, off-line business accomplishes such a task and compare it with an Internet business.
These enterprises create a trusting relationship via:
In contrast, e-commerce ventures are different because:
Here, one needs to understand that behavioral norms (boundaries) are well-defined. For example:
In contrast, one notices that in this medium:
According to one expert, (2) an online trust model can be represented in the following fashion:
| trust model | contents include |
| company info | basic identifying information |
| viability and credentials | indicators of company stability and reputation; references |
| information security | business background, years in business, credit risk score, and financial information |
| Confidentiality | policies and practices relating to the electronic collection, use and access, and security of audit and verification of personal info, intellectual property, or trade secrets |
| specialized models for buyers, sellers, or e-marketplaces | transaction performance history, policies and practices relating to buyer or seller terms, e-marketplace operation, vertical market credentials and partners opinions about buyers and sellers. |
Under the Online Trust Model, e-markets with global reach are rich with information and provide the greatest advantage for both buyers and sellers. This richness of information about trading partners, their products and their business practices has value as a competitive trading tool and ought to be used to one’s advantage, as well as for one’s protection.(2)
The e-marketplace is rich in information. There are five distinct types of information one can obtain:
All these sources play an important role in the model, as they all can be used to establish a firm’s credibility, reputation, and eventually trust.
The Online Trust Model relies on no one single data source. Instead, the model works by obtaining and comparing data from multiple sources and determining its credibility. This, combined with continuous updates and full integration with transaction settlement and risk data, makes the model quite effective. (2)
Utilizing the Online Trust Model, GeoTrust facilitates the establishment of credible business relationships on the World Wide Web. GeoTrust helps establish a business’s corporate identity, utilizes a scalable, secure, authenticated, ongoing registration process, and serves as a trusted authority. Let us examine each of these in closer detail. (2)
GeoTrust accomplishes this task through three tasks. The company:
The company undertakes this task in four ways:
The company effectively links these credentials to financial services and other enablers. Additionally, a paper trail is established, involving all historical actions and various audits, as well as legally necessary information and dispute resolution data. Finally, all the information is integrated into the e-market and helps perform due diligence. (2)
The organization helps to fulfill attributes necessary to establish a business identity on the World Wide Web by helping with authentication, keeping transaction records, and creating a deep, rich profile of a given business. (2)
GeoTrust serves as a fast reliable way for companies to verify the identity and credibility of their on-line trading partners. It fulfills this task by keeping online and continuously updated business-specific information, keeping an open architecture for partner sites, utilizing an actionable data object built on industry standard technology, authenticating, and serving as a basis for business analytics, scoring, and decision making. (2)
The company keeps an expansive assortment of legally binding records, such as:
Combined, all these sources of information serve to create a "True Record" for a given business. (2)
In the end, it takes an complete eco-system to adequately support trade on the World Wide Web. More than a small e-market is needed and trading eco-systems need to be connected among each other. In other words, such systems need to be expected of various business conducting business on the Internet, and not simply seen as a positive but rarely used arrangements. (2)
The following are some of the most critical issues that need to be addressed in order to create online trusted parties:
Nowhere is the need for ethical business practices greater than in DotComs. Because of this unique medium, customers need to rely on businesses and trust them completely. According to one expert (1) the greatest inhibitor of e-commerce today is uncertainly and the lack of trust. As a subset of this concern, three issues need to be addressed:
Given the unique structure of the Internet, most of these need to be addressed by the business, as the legal, political, and regulatory climate varies across different jurisdictions.
Most business realize the importance of dealing ethically with customers and other businesses and know that this is the only way to do business in the long term. But how does one institute these values in a given workplace?
One expert in the field proposes five specific steps in order to foster a climate in which employees will want to act in a morally acceptable manner (1):
As mentioned above, thorough training of employees is an integral part of the process. Reasoning for this is simple. Training:
Before continuing, it may be beneficial for the reader to consider in greater detail why such a strong emphasis on ethics is critical to a business. According to one expert, there are at least five reasons (1):
The bottom line is that high ethical levels directly correlate with high profits for the company. Thus, in the end, the company acts ethically and becomes more profitable as a result as well. Ethical behavior does not come at the price of lower profits!
GeoTrust helps to facilitate Internet integrity among various players. GeoTrust also maintains a high level of integrity within its company. According to one of its principal members(1), GeoTrust:
The company has seven predominant values that guide all of its decisions. They are:
It is these seven values that help make GeoTrust a success. These principles are not specific to GeoTrust, however, and can easily apply to other e-commerce ventures as well.
In order to properly assess a code of ethics implemented by a given company, one can start by asking the following:
These are fundamental questions that help us determine the strength of any given code of ethics.
GeoTrust helps other companies implement their ethical standards in the following ways:
Specifically relating to privacy, GeoTrust has set a number of guidelines that all employees are expected to abide by:
Supplementing ethical considerations are privacy issues. Currently, no one policy predominates, and the existing policies are often unclear and transient in nature. However, according to one expert, two distinct forces need to be balanced. First, we have the advertising interests—this group seeks detailed knowledge of customers in order to provide better service in the future. Second, we have the customers—this group wants superior service, but is often not willing to give up their privacy in exchange. (3)
Various governments have slightly different policy making processes. They vary across different forms of government (parliamentary vs. separation of powers vs. constitutional), different laws, different histories and traditions, and different cultures. (3)
However, despite all these differences, various groups try to affect policy matters in all of these countries. One expert argues that this is a positive thing for the following three reasons:
Washington, DC is no different. Here too various groups advocate their positions and try to influence the legislative and regulatory process. There is a multitude of interests represented here, among them being:
In short, nearly all identifiable interests try to influence the process in Washington, with various degrees of success.
In order to play a successful role in this process, there are several key steps one must follow. Each is discussed in turn below.
There are four key elements in affecting the regulatory process. One need to make sure that each of these steps is examined thoroughly and proper organization instituted.
The first step is to clearly identify and quantify one’s objective. Often overlooked, this step is necessary for evaluating future actions and clearly defining the goals of the campaign. (3)
Second, one needs to decide on the strategy one is to institute and to follow that strategy as closely as possible. This is necessary in order to not loose focus and to keep an eye out on the big picture. (3)
Third, one ought to seek support from like-minded organizations. This should be done in order to try to establish a broad consensus of and commitment from various organizations that can help push the regulatory discussions in a more favorable direction. (3)
Lastly, a proper organization must be put in place. Such an organization must have proper, experienced leadership as well as enough resources (people, money, skills, managerial, legal, substantive experts) in order to properly and effectively affect the process. Additionally, an organization must have substance and merit, and may also have breadth, (ex. Coalition) in order to be effective. Similarly, proper communication must be instituted and lobbyists, public relations/media, and public education are often very helpful. Lastly, a strong grassroots effort can be very effective. As the old saying goes: “All politics is local”. (3) All these things help make an organization an effective and efficient tool in affecting the regulatory or legislative process.
There are seven major functions of a corporate Washington office. Each is discussed in detail below:
Corporate offices tend to serve as an information gathering enterprises. They research new legislation, observe the political process, and determine whether anything ought to be addressed by the office in greater detail. (3)
Additionally, these offices serve to establish access points to the legislative and regulatory players in order to be prepared in the future. The do this by being helpful to those players and making sure that their contribution is valued. (3)
Similarly, corporate Washington offices tend to play a big role in executing particular strategies of firm. They make sure that the strategy is well-received and there are no unforeseen backlashes. (3)
The corporate Washington offices also serve an advocacy function. They lobby various enterprises and present their views to them. This way, others know where the organization stands and what it would like to see accomplished, or not accomplished. (3)
Corporate Washington offices also engage in specific issue management. Based on what corporate headquarters determines to be necessary, the Washington office supplements the headquarters in advocating a specific policy. (3)
In addition to the above functions, corporate Washington offices need to address various issues on different levels. Our global economy, and the emerging influence of the World Wide Web require special attention of these groups. (3)
Additional dimension are also constantly emerging to the forefront of the policy discussions. Financial leveraging and high-level access are issues that need to be explored and eventually addressed. (3)
Ever since the emerge of the Internet as a substantial medium for commercial and governmental interest in 1994, two competing views have been deliberated. One view is that advertising ought to take precedence over privacy, as it also benefits the customer in the form of personalized information. On the other hand, we have various customer advocate groups that believe that this trade-off is not a fair one, especially when it is not disclosed.
The medium is general is great for potential customers and for commerce. But as it is rapidly evolving, it is also subject to two potential constraints:
Both of these constraints need to be eventually addressed.
One expert argues that the federal government ought to support and encourage self-regulation to alleviate the two constraints. Principles such as the ones enumerated below need to be considered:
Ideally, the government should serve as a mediator among industry leaders and help the industry leaders determine the best route to take. (3)
The risks in determining appropriate privacy policies are high. If ill advised regulations take place, we may never see the Internet take on its full potential because of customer distrust or premature ill-considered governmental actions. (3)
Therefore, industries’ interests ought to be carefully considered in order to:
There are three players in this matter: the consumers, the industry, and the government. One expert suggests the following framework:
Consumers need to understand this new media and the benefits and the potential risks that it may entail. Misperceptions need to be addressed as well as legitimate concerns need to be resolved by the industry, and perhaps the gorvernment. (3)
The industry needs to effectively self regulate and educate the public in an honest and truthful fashion. (3)
The government needs to avoid political expediency and strive to understand the problem fully before legislating or regulating the medium. Special Intra-state and global considerations need to be fully addressed. The government also needs to be sensitive to the “law of unintended consequences” and move carefully. After all, the potential for damage is great, given the tremendous amount of commerce taking place on the Internet currently, and the future commerce that may be affected. The best role for the government to play now is to stimulate enlightened debate. (3)
It is quite obvious, one expert states, that there’s a lot of angst present in Washington when it comes to the Internet. (3) However, angst should not be the basis for legislation. Instead, problems need to be properly defined and remedies proposed. Education is the key to the whole process and will result in a positive outcome, be it legislative or otherwise. (3)
Until the final resolution is mandated, customers are in good hands. Various self regulatory programs have been implemented at many e-commerce operations, privacy policies are generally posted, COPA is in full force, and so far, no egregious violations have been documented.