Bureau of Economic and Business Research   

Working Paper Abstracts for CISTM


There is a revolution transforming the global economy. Web technology is transforming all business into information-based activity. The rate of technological change is so rapid that emerging electronic commerce already is making fundamental changes in the economic landscape, affecting every aspect of how business is and will be conducted. The Web has extended the reach of corporations. New business opportunities are growing incrementally because of the vast amount of business information made available by the global Web, which helps bring together the information passed between businesses, between a business and itís customers, and among different departments of a business. It will no longer be possible operationally or strategically to ignore the information-based virtual value chains for any business. This paper reviews the scope, current applications, and the potentials of electronic commerce. It also develops a framework for identifying the significant opportunities and important research issues associated with electronic commerce. The emphasis is on taking an interdisciplinary view that integrates technology and business models.

We examine the question of whether transactable forms of privately issued, demandable debt are better used as "banknotes" or "checks." The distinction between the two is that a check must be redeemed by the issuing bank with each use whereas a banknote can circulate. We find that the answer to the question depends critically on the cost of early redemption. If this cost is small, banknotes will not circulate so the question is moot. If this cost is large, incentive problems may prevent the issue of banknotes. For intermediate values of the early redemption cost, the option of early redemption limits the bankís risk-taking behavior, so that banknotes will be preferred over checks.

In this chapter, we discuss product marketing using the Internet, particularly the use of Internet for product promotion and new consumer processes. Internet advertising, virtual store-fronts, and virtual communities are explained with examples and our views. We then present new consumer processes on the Internet and show how they enhance the fulfillment of the consumer purchase needs and also support interactive marketing. We discuss the challenges of measuring Web advertisements and close the chapter with a summary of our views on Internet and marketing.

Electronic catalogs [e-Catalogs] are becoming the gateway to Electronic Commerce on the Internet. Most of the research and applications to date have centered on supplier based catalogs. There are at least as many business buyers as there are suppliers and yet little information is available to these buyers concerning the benefits, costs, and managerial considerations associated with the use of e-Catalogs. We examine e-Catalog issues from the business buyerís viewpoint. We concentrate particularly, on the use of Web-based supplier catalogs in the management of procurement transactions. After reviewing the Web-based e-Catalog system design issues, we consider tangible and intangible aspects of cost/benefit relationships when adopting a Web-based procurement/purchasing system [WBPS]. There are some obvious tangible and intangible benefits however, when adopting a WBPS, it is important for management to address the organizational issues very early on to assure organizational buy-in. We consider the various managerial issues that need to be addressed to assure a successful implementation.

This chapter proposes an integrating view of Supply Chain Management as a set of Visible Design Rules that govern interactions across independent organizations, each with itís own hidden operational and organizational information. Applying the principle of modularity from computer architecture to supply chain studies, we specify the basic three elements of visible rules: architecture, interfaces, and standards in the context of supply chains. Subsequently we discuss a set of measurable operations performance metrics, interfaces among supply chain partners in the form of processes that cut through multiple layers of the chain, and partnership and network structure as the architecture of supply chains. We suggest that supply chain management studies and practices should focus more on the overall visibility of standards, interfaces, and structure instead of probing into each organizationís detailed planning and operations, to allow for the maximum flexibility for them to change and innovate. The ultimate goal is to achieve an agile supply chain with quick and accurate response in a fast changing business environment.

A key constituent of supply chain management strategies is information sharing. Software component technology facilitates information sharing by providing a means for integrating heterogeneous information systems into virtual information systems. Extranet technology facilitates information sharing between an enterprise and its business partners as well as its customers through the Internet. These two technologies enable new strategies that integrate information systems and improve supply chain networks. We discuss the application of these strategies to supply chain processes.