The Internet and Business
The Internet has been a revelatory innovation as evidence has proved in the recent years. Initially developed by the Department of Defense to enhance internal communication, the Internet craze took a different turn and spilled over to the rest of the citizens. Four decades down the line after its inception, the Internet has continued to prove what an invaluable tool it is in economic development. It is successfully applied in communication, in business in management and even in learning. In business and management, use of the Internet has proved to be massively beneficial. Online retail businesses find their way into the market every other day, presenting stiff competition to offline retail businesses, also called brick and mortar organizations. The term brick and mortar organizations refer especially to the physical nature of such businesses, which always have an office or a store from which they conduct their businesses. Renting an office comes at a cost and this remains one of the significant avenues for online business to cut their operational costs. They, therefore, become more competitive in comparison to the offline retail businesses.
This essay discusses how the Internet has proved to be the decisive factor in business survival and how it can be used in improving management of businesses.
An organization is a group of people working together to achieve a common goal or objective. An organizational concept consists of the guidelines for the interaction of the people within the organization to streamline the process of realizing the organizational objectives. It refers to the configuration, the system and the structures put in place to guide efficient running of the organization. It also includes the guidelines for responding to changes that may occur within the organization or the immediate environment of the organization. The purpose of the concept of an organization is to maintain relevance and/or profitability of an organization. Over the years, the concept of an organization has changed, mainly due to the emergence and take-over of the Internet. The Internet has claimed its place in the world of business. Today, any entrepreneur looking to start a business would be considered out of business if he or she does not take into consideration incorporating the Internet in the organizational structure.
At the helm of every organizational structure sits the manager. This is the man or woman tasked with guiding the organization to growth, development and prosperity. Managers in organizations have many roles, apart from overseeing the operations of the organization. Managers assign roles and responsibilities to the employees. They spell out the duties to be done by each member of staff and ensure effective coordination of activities to meet the objectives set. In some instances, managers delegate duties to junior staff members. By doing so, they bestow authority on the staff members to undertake responsibilities which require their presence and supervision. In addition, managers undertake the responsibility of making key decisions involving organizational strategies and means of achieving set goals. Besides being in the forefront in seeing off the day-to-day running of operations in an organization, managers are tasked with an even bigger responsibility of managing change when it comes along. For instance, with the onslaught of the Internet era, many managers have been forced to deal with certain crucial yet inevitable changes in order to keep their organizations afloat and functional. Managers obviously have different ways of running the organizations which they are responsible for. However, certain changes in organizations call for similar or almost-similar reaction measures to pull through.
The Internet has forced some business organizations into extinction. In the same way, it has fuelled and fanned other small and medium enterprises into global outfits commanding extensive customer bases. The Internet is an interconnection of computers that allows for exchange of information by its users, who may be worlds apart. It has been phenomenal in acting as a springboard and catapulting many business enterprises into the international markets. This has been possible due to the easily spread advertising.
Marketing and advertisement, two crucial factors in the growth and sustainability of a business, are some of the ways in which the Internet comes in handy. The sole reason behind the existence of every business is profit making (Hamill, 1997). However, before a business is able to rake in any profits, it has to stay ahead of the rest of the business organizations and if possible, ward off competition from them. Lately, online retail businesses have continuously been pitted against offline or brick and mortar organizations. From the look of things, it appears online retailers are winning the war. E-commerce is a two hundred billion dollar industry in the United States alone, and it keeps growing in leaps and bounds (Santhi & Mariasagayee). Americans seem to have fallen in love with online shopping and are cherishing the experience of making purchases from their comfortable homes with a click of a button. However, offline retailers have not been completely written off from the competition. Nevertheless, this scenario is proof enough of the notion that online and offline retail businesses call for different managerial perceptions and undertakings.
Online and offline business organizations require to be managed differently and the huddles facing each dealt with in light of the circumstances. Brands that operate through the Internet (online business organizations) considerably reduce their operational costs due to the nature of the online business. They avoid costs incurred due to renting an office, hiring staff employees to manage the office and keep it running and the issue of intermediaries. These facts make online businesses cheaper to operate, thereby giving them a cutting edge over offline businesses. The management of offline business organizations should strive to ensure their organizations remain competitive while at the same time maintaining the high quality of their products and services and good customer relations. Likewise, online retail businesses should be careful not to overlook certain market trends that are decisive in upholding and improving their operations (Koellinger, 2008).
To highlight on and emphasize the need for different management styles for online and offline business organizations, it is necessary to look at the examples of both cases. Amazon is an online retail business that has been functioning for a long time now. The business is conducted strictly through the Internet. Customers order their goods online and deliveries are made to them from the distribution warehouses and stores of the company. For a long time, Amazon has enjoyed long-standing and relatively high profitable margins. Despite this, it has faced a few setbacks in its operations. First of all, due to the online nature of the business, it provides little room for personal interaction with customers. This may be a decisive issue, especially for customers who would like to have one on one attention. The other problem it faces is the length of time taken to ship and deliver orders to the clients.
Sometimes it takes a long time to make deliveries and this fact may deter some customers, particularly those who wish to quickly receive their goods. The other case example is Target, an offline retail company. Target is a retail company that sells clothing. It has numerous stores across the nation where its customers can go and pick the items they wish to buy. The company hires clerks and customer attendants who help the customers with making choices and readily shed more light on product information and details. Target is also a profitable company, yet that does not mean it does not meet challenges. Most notably, the company incurs high operational costs due to its offline nature. The buildings in which its stores are housed, especially the rented units have to be paid for. In addition, the expansive workforce has to be paid monthly. Another problem faced by the store is the involvement of intermediaries which makes the end prices of products higher.
Most of the problems faced by online businesses are different from those faced by their offline counterparts. Online businesses do not give a one on one attention to their clients, a very different case from the offline businesses. On the other hand, offline businesses incur many operational expenses unlike online business. There is no clear-cut benefit of either offline or online businesses. Both types have merits and demerits. It all boils down to the type of trade carried out by each type. There are certain types of business that are more suited for online work while others are more suited for offline functioning. An entrepreneur has to make a comprehensive analysis before shifting from brick and mortar organizations to online business.
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