E-Business Is More of an Economic Disadvantage to Businesses Than Advantage

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Jovarauskienė and Pilinkienė (2015) provide an interesting angle on the issue as they view the economic advantages and disadvantages of ‘e-business model’ when used in B2B, B2C, C2C, G2B, and G2C modes of cooperation. When used in B2B, e-business model helps in creating the conditions for effective and efficient direct cooperation with business partners; it lowers expenses with automatic selling and improve communication by EDI and database integration (Maruyama, 2002; Ng, 2002). However, for B2B, most important difficulties are rapid technological change and requirement to have compatible electronic infrastructures to cooperate effectively (Johnson and Whang, 2002). Other challenges are coping the investors’ criticism and resistance of stakeholders when adopting new infrastructure (Earl, 2002; Grieger, 2003). In B2C, most vivid benefits are transparency of the company as customers can receive the required information about the company and its products/services fast and easy, and order them in a convenient way (Dussart, 2001). E-business in B2C can be a tool to maintain relationships with customers, control the quality of products/services and create an effective CRM system (Wirtz and Lihotzky, 2003; Hendricks et al., 2007). External and internal challenges exist however. On the one hand, adopting of customer-centered e-business requires reorganization of an entire business, managing the possible gap between the business requirements and the proposed solution (Lai and Yang, 2009). On the other hand, customers may become loyal if use e-business model effectively, but the company have to “educate” customers overcoming their resistance to innovations (Anderson, 2001). The issue of C2C is related to topics of disintermediation and reintermediation, since such services as eBay and Amazon offer ordinary people the opportunity to sell any items without a physical store, thus each person become a certain business entity and benefit from this (Sen and King, 2003). The services has managed to ensure the security of payment and adopted measures against the fraud with a system of rating, however, the problem of misrepresentation of products remain topical (Rowley, 2002; Lee and Lee, 2009). G2B and e-government offers a number of economic advantages, starting with increased effectiveness and efficiency of government-business interaction, enhanced transparency and accountability, cost-effectiveness for business when contacting with the state, decreased paperwork, improved communication and enhanced flow of information (Layne and Lee, 2001; Atkinson and Castro, 2008). The major concerns in both G2B and G2C are related to hyper-surveillance and concerns over the data safety, accessibility of internet for everyone and lack of digital literacy, coupled with problems related to costs of establishing and maintaining infrastructure (Furuholt and Wahid, 2008; Al Nagi and Hamdan, 2009).