Business Environment

Business is very complex and thus before entering into any new venture evaluation has to be done on the various aspects affecting the locality intended for the venture. Malaysia has good economic attributes though of late the economy has been experiencing problems. Malaysia has a federal government headed by a king and a state government headed by a prime minister. These two governments make all legislatures governing the country. The country has various departments regulating trade, business and finance. Malaysians value culture and ethics.

The country has many resources that are necessary in business. The country is thus very potent for business ventures. Introduction Business is a very diverse and complex sector in any given region worldwide. A proper evaluation of business in a locality thus entails being able to assess all the different aspects and areas that can affect business, whether positively or negatively. In this essay, we shall assess Malaysia and all the aspects and factors that either facilitate or hinder business in the country.

Assessing Malaysia’s Potential for Business The Malaysian profile Malaysia is a country in Asia that neighbors Indonesia, Philippines, Brunei, Thailand and Vietnam. Initially colonized by the British since 1786, Malaysia got independence on 31st August 1957, after which the country entered into a federation with Sabah and Sarawak (Barbara and Leonard 1984, p. 5). They continue to say that the country is divided into two sections by the South China Sea, and thus the country is largely surrounded by water and has a total area of 127,354 square miles.

Malaysia had an estimate population of 28,310,000 as of 2009, making it the 44th most populated country in the world, with the capital city of the country being placed in Kuala Lumpur, although the main administrative city of the country is Putrajava (The Malaysian MITI website 2010, p. 1). The Malaysian Economic attributes Economically, Malaysia has seen both tough as well as good times, with the main influences to the economy being trade, tourism, manufacturing, agriculture and mining (The Malaysian MITI website 2010, p. 1).

Malaysia has worked as a hub for oceanic trade since time immemorial due to the availability of porcelain and spices in the country. It was mainly due to these products that the country was incorporated in oceanic shipping routes. Malaysia was predominantly more engaged in agriculture and mining as the main influence to the economy but presently, manufacturing and tourism take a leading role in economic growth; manufacturing exports range from the vehicles to electronics and electrical products, while tourism is emphasized by the many beautiful beaches and tourist attractions in Malaysia’s rich geography (The Economy Watch website 2010, p.

9). The major indicator of Malaysia’s sustainable economic growth is the Petronas twin towers, one of the world’s tallest buildings. However, the economic growth rate values realized from assessment of the GDP rates for the country over the years indicate that recently the country has been struggling economically, with the GDP falling from an all-time high of 7. 10% in 2005 to as low as -2. 8% in 2010 (The Index Mundi website 2010, p. 1). Despite this problem the country has an official foreign exchange rate of $207.

4 billion with the Malaysian currency, the ringgit (MYR), doing fairly nice against major currencies like the US Dollar. The Malaysian Purchasing Power Parity has also been exceptional, with the latest values being $378. 9 billion, and the GDP rate per capita being $14,700 currently, a clear indicator of the potential that Malaysia has for business (The Index Mundi website 2010, p. 3). For a country with such a huge population, Malaysia has been near ideal in its employment capacity, with the unemployment rate coming just about 5% and inflation rates have been minimized from 5. 4% in 2008, to the meager levels of 0.

4% in 2010. Malaysia has also been very objective in promotion of trade both locally and internationally through its multi-lateral trade system as well as through entering into various agreements and setting of trade tariffs that promote business. One such agreements that Malaysia has entered into to facilitate trade is the Free Trade Area agreement that is made by the Association of South East Asia Nations, which Malaysia is part of, which allows member states free trading without import or export duties under the Common Effective Preferential Tariff scheme (The Malaysian MITI website 2010, p.

2). With regards to Australia and Malaysia, there is one trade agreement made with Malaysia individually and another with the ASEAN body. The ASEAN, Australia and New Zealand Free Trade Area provision agreement was aimed at creation of a Free Trade Area between Australia and ASEAN countries with an attempt to promote trade between ASEAN member countries and Australia in the aspects of investment, trading and financial services.

The Malaysia-Australia trade agreement for a bilateral Free Trade Area was aimed at addressing high product tariffs and non-tariff measures, establishment of mutual recognition arrangements on product standards, and facilitating two-way investment flows (The Malaysian MITI website 2010, p. 3). Politics and the Political System in Malaysia Malaysia houses different political cultures since it is a federal constitution elective monarchy headed by a King elected from the nine hereditary Sultans of the states in Malay every five years (123 Independence Day website 2010, p.

4). The country’s legislation is made jointly by the federal monarchs and the Parliament which is sub-divided into the House of Representatives and the Senate. The country’s executive powers are vested in the Prime Minister, who heads the cabinet of the country. The Malaysian constitution divides power between the executive judiciary and the legislature. Power separation occurs at both state and federal levels, and what the federal assembly enacts as laws affects the entire country (123 Independence Day website 2010, p.

4). However, the power to make laws is distributed between the federal and state governments via the federal, state and concurrent list; the federal list influences external affairs, internal security, defense, civil and criminal law, citizenship, commerce, finance, health and labor; the state list regulates agriculture, land, local government and religion; the concurrent list influences social welfare as well as town and country planning (123 Independence Day website 2010, p.

4). Factors affecting business in Malaysia: The Malaysian Business Environment Business environment evaluation is an important tool in prediction of the profitability of a business and thus it is important to run such an evaluation on Malaysia. Thus, we must assess the various environments that are of most influence to a business, in this case the legal and regulatory environment, as well as the socio-cultural environment. The Malaysian Legal and regulatory environment

Legal processes and petitions in Malaysia are done in various courts depending on their context. There are regional courts for settlement of domestic and criminal disputes, industrial courts to implement set industrial and labor laws, and the tribunal for consumer claims to deal with consumer issues. The Regional Center for Arbitration based in Kuala Lumpur can also be used for settling disputes. Local and international business in Malaysia is regulated by several government ministries in conjunction with each other.

These ministries are: the royal customs and excise department which regulates duties on goods, the Malaysian Central Bank which regulates exchange rates, the Malaysian Industrial Development Authority which regulates investment into the country, the Inland Revenue Board which regulates taxes on commodities, and the Malaysian Ministry of International Trade and Industry which regulates exportations and importations (Hauser Global website 2010, p. 7). The Socio-cultural environment of Malaysia

Malaysia is a country with an amalgamation of different cultures, languages and ethnic groups combined together. We have Bumiputeras making the larger composition, the Chinese taking the second-largest percentage composition, Indians making the third largest group of the population, and also the minority which comprises of foreigners and other ethnic peoples (Hauser Global website 2010, p. 7). The Malaya language is dominant and widely spoken throughout the country. Religious-wise, the country has a mix of Hinduism, Islamism, Buddhism and Animism.

Business in Malaysia is in a major sense based on trust and communication (Hauser Global website 2010, p. 7), and it is thus very necessary to build relationships with potential partners to ensure the success of a business. Most business dealings in Malaysia are guided by subjective feelings and religion-based inclinations rather than empirical evidence. Working practises in Malaysia are also very different from those observed in other world countries since religious aspects have to be incorporated in business processes.

Additionally, punctuality is valued in Malaysia and depending on whether business is being done with the government or other companies; correspondence with the government has to be done in Malay while other companies prefer English (The Geert Hofstede website 2010, p. 3). Protocol and respect for authority in Malaysia are also important factors to observe since vertical hierarchical power structures are used widely and also due to the fact that working relationships between superiors and subordinates is very official in the country and also from the fact that business relationships between colleagues are also based on mutual respect.

Consumer attitudes in Malaysia are guided in a very major way by how much a company or a brand impresses and therefore impression is very important (The CBS Interactive Business website 2010, p. 1). Availability of resources Malaysia is endowed with many human, natural and artificial resources. We can gather this from the fact that the country has a high skilled labor index, it is a major exporter of various agricultural products, and also from the fact that it is also a major player in industrial exports in Asia (The Malaysian MITI website 2010, p.

3). The country is also capable technologically and infrastructure-wise and it has a wide range of educational and social amenities at all levels. Due to the income generated from an economy that is doing well, Malaysia is generally financially adept and very promising in terms of business. Ethics and Social Responsibility aspects It is also very important to consider that Malaysia has very strict rules on ethics and responsibility especially when it comes to business.

This is to say that application of most western practices in business becomes a problem especially since religion has to be incorporated into the culture of most businesses (The Index Mundi website 2010, p. 4). Moreover, Malaysia business culture tends to emphasize that values drive businesses and thus responsibility and ethical practices are the core belief to good business dealings. Conclusion

In evaluation of Malaysia, we can realize that despite the few aspects of religion and culture that can be rather tricky to adopt in any business structure, an investment into the country could bring lots of income especially due to the fact that the country has an economy that generally does well, it has a free trade agreement with Australia and also due to the strength in infrastructure and resources, there would be minimal problems in doing business in the country. Thus, a venture into the country can be very profitable to any company investing there.

It is also advisable to maintain high standards of ethics and responsibility. Recommendations I would however recommend that agreements be reached with a Malaysian bank in the country on the exchange rate conversions of currencies on the income got as well as the cost of setting up the business in Malaysia. Additionally, a working culture that incorporates religion and the Malaysian values should be introduced in the new business. Finally, since impression is a very important in Malaysian business, it should be emphasized, with lots of effort being put in developing good relations with prospective partners and clients.

References 123 Independence Day website. 2010. Malaysia: Politics and political systems, pp. 4. <http://www. 123independenceday. com/malaysia/political-system. html> Barbara S. and Leonard V. 1984. The History of Malaysia: The journey since Independence. Basingstoke, Hampshire, United Kingdom: McMillan Publishing Press Ltd. , pp. 5. Hauser Global website. 2010. An overview of the Malaysian legal system, p. 7, <http://www. nyulawglobal. org/globalex/malaysia1. htm>. The American Central Intelligence Agency website.

2010. World Fact book: Malaysia, p. 37, <https://www. cia. gov/library/publications/the-world-factbook/geos/my. html>. The CBS Interactive Business Network website. 2010. Consumer perceptions on the consumerism issues and its influence on their purchasing behavior: a view from Malaysian food industry, p. 1, <http://findarticles. com/p/articles/mi_m1TOS/is_1_11/ai_n31140809/? tag=content;col1>. The Economy Watching website. 2010. Malaysia Economy Review: Trade, Exports and Imports, pp.

9-21, <http://www. economywatch. com/world_economy/malaysia/export-import. html>. The Geert Hofstede website. 2010. Malaysian Cultural dimensions, p. 3, <http://predicate. wordpress. com/2009/06/17/geert-hofstedes-cultural-dimensions-on-malaysia>. The Index Mundi website. 2010. Malaysian Economic Attributes, pp. 1-4, <http://www. indexmundi. com/malaysia>. The Malaysian Ministry of Trade and Industry website. 2010. Trade Information: Free Trade Agreements, pp. 1-3, <http://www. miti. gov. my/cms/index. jsp? whichSite=MITI>.

In a dynamic and competitive world of macro political power and interests, in which occupational groups gain and/or maintain professional standing based on the creation of legal boundaries that mark out the position of specific occupational groups –be they in accountancy and architecture or law and medicine. However, if this suggests that the process of professionalisation has differential socio-political dimensions, so too does the fact that not all learned occupations necessarily become professions.

This point is more recently underlined by the comparison of herbalism and acupuncture in England, where herbalists alone have been earmarked by government to gain legal closure through statutory regulation given a perceived need for greater public protection in this area – despite having equivalent knowledge and expertise and arguably less rigorous and unified occupational organisational structures to those of the acupuncturists(Saks 2011) on also needs to be paid to the ideological dimen-sions of professions above and beyond knowledge and expertise in understanding the success and failure of professionalisation in defining professions.

This can be illustrated with reference to altruism, so often put forwardby taxonomic writers as a distinctive actual professional characteristic (Saks 1995). The case of herbalism and acupuncture underlines its potential importance, as the British government has

Saks: Defining a Profession:The Role of Knowledge and Expertisewww.professionsandprofessionalism.comPage6placed a heavy emphasis on the protection of the public in modernising the health professions (Baggott 2004).

However, the level of altruism of professions relative to other occupations –as distinct from the legitimating ideological claim itself –has rarely been systematically scrutinised. Interestingly, while a recent replicated Swedish survey of a range of professions, semi-professions and pre-professions –from lawyers to graphic designers –unusually analysed the amount of public trust given to such groups, it did not examine the relative position of non-professionalised occupations (Svensson 2011).

So who teaches on all of these courses? The FE college workforce has begun to emerge as a serious area of research interest, a process that has gathered pace during the last fifteen years or so as successive governments have sought to reform and regulate the workforce in different ways. During this period, FE teacher training has been reformed, made compulsory and then returned to a voluntary activity. And FE teachers have been ‘professionalised’ and ‘re-professionalised’.

Over the last fifteen years, three entirely new sets of professional standards for teachers and trainers in the sector have in turn been consulted on, published, and mapped onto teacher-training curricula and staff appraisal systems. Continuing professional development has been mandated and then discarded. Mentoring and coaching have been introduced, although provision is uneven. One professional body – the Institute for Learning – came, briefly and rather unimpressively stayed, and then left, and a new professional organisation – the Society for Education and Training – has recently emerged instead. Not without reason has the sector been characterised as undergoing endless change.

During the constant changes of the last fifteen years or so, the issue of teacher professionalism has remained persistently troublesome. Different models or philosophies of professionalism jostle for space amongst contradictory policy discourses and initiatives. Do we want a qualified workforce or not? Do we want compulsory CPD? Should FE teaching also be a graduate – or equivalent – profession? Should part-time staff be required to have the same professional qualifications as full-time staff? Are professional standards or benchmarks a tool for professional development or for quality assurance, audit and performance management?
is it any wonder that meaningful discussions about what it means to be a professional teacher in FE remain difficult to pin down?

Questions such as these persist but are arguably absent from much of the day-to-day experience of teachers in the sector, perhaps pushed sideways by teaching and assessment requirements (it is not uncommon for a full-time FE teacher to deliver over 850 contact hours each year) and employment conditions (almost two-thirds of teachers in FE are on part-time contracts and the staff turnover rate for teachers is almost one in five (Education and Training Foundation, 2014)).

In a sector characterised by relatively high staff turnover, diversity in teacher profiles, backgrounds and experience, variable working conditions and constant changes to policy, is it any wonder that meaningful discussions about what it means to be a professional teacher in FE remain difficult to pin down?

The Post-Compulsory and Lifelong Learning SIG seeks to encourage research into not only questions such as these relating to teacher preparation and professionalism, but also into other areas relating to further education, adult and community education and work-based learning more generally, including the curriculum, the students and the organisations involved. Come and talk to us at the 2015 conference, or get in touch online.

References

• Education and Training Foundation (2014). Further Education Workforce Data for England. Retrieved from: http://www.et-foundation.co.uk/wp-content/uploads/2014/09/SIR-Report.pdf (date accessed, 17 June 2015).
• Lucas, N. (2004). The ‘FENTO Fandango’: national standards, compulsory teaching qualifications and the growing regulation of FE teachers. Journal of Further and Higher Education 28(1) 35-51.
• Lucas, N., Nasta, T. and Rogers, L. (2012). From fragmentation to chaos? The regulation of initial teacher training in further education. British Educational Research Journal 38(4) 677-695.
• Robson, J. and Bailey, B. (2009). ‘Bowing from the heart’: an investigation into discourses of professionalism and the work of caring for students in further education. British Educational Research Journal 35(1) 99-117
• Tummons, J. (2014a). The textual representation of professionalism: problematising professional standards for teachers in the UK lifelong learning sector. Research in Post-Compulsory Education 19(1): 33-44.
• Tummons, J. (2014b). Professional standards in teacher education: tracing discourses of professionalism through the analysis of textbooks Research in Post-Compulsory Education 19(4): 417-432.

But these are all much more than simply ‘values’ we should hold or aspire to. They are prescriptive expectations of colleges, teachers and their practice that are constantly monitored, measured and audited. Quality assurance is rife in FE, from OFSTED inspections, stakeholder and learner surveys and course audits, to staff appraisals, observations and close analysis of (mainly) quantitative data.

Smith (2016) points out that ‘quality assurance systems with their SMART targets and ‘measurable outcomes’ are regrettably a commonplae feature in FE. That is something that should give us serious cause for concern’. He argues that when QA procedures are implemented in an unintelligent, managerialist way several things happen:

• Good quality teaching and learning is valued less and there is greater focus on the ‘output’ – the success rates, achievement levels or retention rates alone.
• The quality of educational relationships are undermined
• Extra-ordinary, life-changing relationships between teachers, students and knowledge lose value

This cycle of QA, auditing, control and measurement values and ‘prioritises the knowledge of policy-makers and auditors, rather than the expertise of the professional teacher’ (Pleasance, 2016, p.75). OFSTED inspections (much reduced in terms of depth and scope) only contribute to these phenomena since they take statistical data as a starting point and a defining factor in their judgements (Smith, 2016).
So how do these conceptions of value and this heavy focus on QA impact me as a lecturer and on my learners?

Personal values, better described as ‘the ethical bases of our actions and beliefs’ (Bolton, 2014, p.22) do change as we grow but are very deep seated and woven into our very being. Personal values drive our attitudes and actions, but we rarely stop to examine and question them.
Balancing personal values and principles with those of the organisation and external bodies can be difficult. I like to take a humanistic, holistic approach to teaching and my learners (this fits with my person-centred, humanistic approach in my professional counselling role).

I value my relationship with them, I want to make a difference, treat them with care, teach and behave with openness and integrity and help them leave the course with more than just a grade on a piece of paper. External and internal moderation systems, course evaluation and QA activities focus heavily on grades and achievement.

I also value achievement for my learners but believe that education is more than just a grade or qualification that prepares a learner to earn money and contribute to the local and national economy. Ball (2004:15) agrees, highlighting a worrying trend in education, suggesting the commodification of education is producing a system where ‘beliefs and values are no longer important – it is output that counts’.

Information helps manage and evaluate corporate goals. Information forms the most essential part of analysis and implementation guidelines. Time will also manage the knowledge of the executives and promptly make timely decisions and moves. Time also expedites knowledge management so as to fit in the sales program through having to adhere to a set time frame and goals set by the superiors, this coerces the executives to be productive and aggressive in their sales duties. Consistent contacts with clientele Communication forms the basis of consistent sales and marketing.

The project will entail making sure that the distributors and the clients regularly updated with valuable and reliable information. The age cluster of the clients should be looked at as the basis of what language and response to make during communication. The consistency should be checked on so as to repose more confidence on the customers and accelerate their interests in the Berri products so that they can invest more. Current business trends and market share fluctuation cripples strategy. Forecasting of impeding fiscal storms and the possibilities of consistent performance of the product minimizes risk for the Berri investment in Taiwan.

The marketing strategy will offer a broader view of systematically implementing the plan and be able to ascertain which fall back position when environment and trends related to the product change and force the company to abandon its current strategy and adjust to the new requirements Projected gains and conclusion Through competitive prices, market penetration strategy, and comparable pricing strategy will succor to elevate Berri’s entry and create a market share for the company. Through advertising the consumer will respond to the already existing popularity of Berri in Asia.

This should encompass several stratagems. 1- Product comparison pricing 2- products benefits advertising 3- product family advertising. These will facilitate market penetration. Berri has substantial clout and experience in both distribution and marketing, as such, through establishing local outlets through existing structures like stores, distributors and other forms of retailers and wholesalers. It will facilitate the efficient penetration of the products. It should cover the following 1. On-premise Sales 2. Direct Sales 3. Wholesale Sales 4. Self-service Retail Sales 5. Full-service Retail Sales The Prospect

The success of Berri’s market penetration will involve a new prospect (clientele), how aware the prospective customers are of what Berri is offering, competition, growth rate of the industry and demographics. It also involves, whether this new clientele is willing to spend on the new product and if it offers a solution to their problem. Likelihood of adoption by the prospective clientele will depend on the criticality of this Taiwanese clientele need, their attitude about change, the significance of the benefits, barriers that exist to incorporating the offering into daily usage and the credibility of the offering.

This is Berri’s breakthrough secret and will certainly lead to success.

Bibliography

Benjamin M Oviatt & Patricia Phillips McDougall (1994) JIBS Journal of International Business Studies (1994) 25, 45–64 Bilkey, Warren J. , “The Vector Hypothesis of Consumer Behavior, Journal of Marketing, Vol. 16, No. 2, Oct. , 1951, pp. 137-151 Schiffman, L. G. (1993), Consumer Behaviour, Prentice Hall International, London McDonald (2000) International Marketing Strategy www. themarketingproccessco. com Lars Perner (2008) International Marketing.

Business and Administration Unit four: Principles of supporting change in a business environment Session 1 Handout // Why change happens Reasons for change In business there are continuous pressures for change. It is helpful to consider reactive change when the business responds to external pressures and proactive change when the business changes due to internal demands. Reactive change Pressure to change There are many factors that influence business organizations. These factors create pressure for change in those organizations. One helpful way of thinking about the factors influencing change is to use the PEST acronym.

This highlights four of the main influences on the operation of a business. The acronym represents the following: Political Examples include: Government (policies, regulations, grants, etc) International (conflict, political change, pressure groups and trade policies) Legislation (domestic, European, future legislation, and international legislation) Economic Domestic (competitors’ behavior, economic performance and trends, tax and interest rates) International (competitors’ behavior, economy, economic trends, tax, interest rates, exchange rates and trade issues) Social

Advertising and PR, brands and image, consumer attitudes, consumer buying preferences, demographics, ethical issues, events, media views Technological Ability to install new technology (and of competitors to do so) Emerging new technologies Funding for technological research, development and implementation Intellectual property rights Technology legislation and life cycle O Creating Careers Ltd 2011 Page 1 of 2 Unlit Tour: Principles AT supporting change In a These external changes will create pressures for an organization to adapt and make internal changes. Proactive change Change from within

The other source of change comes from within a business. Here you may have a business that is operating effectively and satisfying its customers yet there are still changes being made. This is driven by a desire in the business to improve. Some typical examples include: An organization decides to cut waste and reduce costs innovates with its products wants to move from 12 hour to 24 hour customer support introduces Total Quality Management techniques However, the changes may also be less dramatic such as: Upgrading the office software Putting some new furniture in the canteen. Page 2 of 2

Dairy farming is one of the key areas of Agribusiness sector. One subgroup of this dairy farming is the raw milk business, which is the focus area of business in this report. The raw milk business is a very unique business area because of its frequent clashes with the government, and the very strict regulation under which it operates.

The business is analyzed by using a fictitious company names Organo-Milk. The company can be thought of as a typical medium scale business enterprise, which is one of the common scenarios in this business are. The problems outlined for this company are typical of other similar sized companies in the raw mil business, and have led to many of the companies being closed down.

The surviving companies are either very large cooperatives like Horizon Organic, or innovative companies like Organic Pastures, the latter being the chief focus of this study. Through the fictitious company, the raw milk business will be analyzed and some strategic options would be outlined, which can be utilized for other similar companies in the business.

The report first gives the introduction of Organo-Milk, then gives a detailed explanation of the US government policy regarding raw milk, then explores the business environment of the company, and finally takes all these inputs to give strategic solution for the company under focus.

Introduction

 The company under analysis here is a fictitious company with the name Organo-Milk. The company is modeled after the company Organic Pastures, and makes raw dairy milk and related products.

The raw dairy products are the dairy foods that are unprocessed artificially for instance by using processes such as pasteurizing, heating, or chemically treating etc.

Even the cows used in the farms are nor given antibiotics, hormones or GMOs i.e., Genetically Modified Organisms for producing more or better grade of milk. Instead they are given naturopathic treatments and are fed using organic green pastures only (Organic Pastures: Products, n.d., para 1).

Like Organic pastures. Organo-Milk is also considered as a family owned company with the main organizational positions shared between different family members. Organo-Milk is based in the California state in the United States.

This makes the company along with Organic Pastures, “one of the few remaining family-owned and operated dairies in California” (Organic Pastures: Organic pastures dairy Company, n.d., para 1).

The company is assumed to have been set up formally in the early 1990s, and the founding members still hold crucial positions in the company, and are responsible for most of the day to day decisions and company operations.

The staff working with the company has also been with them from the very start, with few instances of permanent employees leaving the farm. Most of the people employed on the farm live in the neighboring areas with very few instances of immigrant labor, though there are a fair number of labors who are drifters, ready to work as temporary employees for a couple of months.

The company follows a very personal approach in its dairy farming operations.

The products of Organo-Milk are kept similar to Organic Pastures, and are as below:

·          Milk – As is mentioned above the company produces raw milk which contains natural occurring bacteria, beneficial to health, other necessary organic compounds like amino acids, fatty acids, vitamins, minerals, antioxidants etc.

·          Butter – The butter made by the company is also raw butter, which is merely the fat part of the raw milk, and is made from churned cream without any additional ingredients like salt or colorings.

·          Cream – Cream produced by the company s just the raw cream skimmed from the raw milk, and there is not chemical process involved during the sequence.

·          Cheese – The raw cheese produced by the company is probably the most treated of all the products. The cheese is heated to a temperature around 100 degrees Fahrenheit to make the process optimized and faster.

·          Colostrum – This is the food which a mother cow produces to strengthen their new born calves and is an attraction to people who like dairy products.

(Organic Pastures: Organic pastures dairy Company, n.d., para 1)

The products produced are generally known as organic in the market mainly because of their non-use of any hormones and chemicals during and after the milking process.

The milk and milk products which follow this process come at a premium price, and are popular among people as ‘real’ dairy farm products. The companies however, are almost always under controversies regarding safe practices, the treatment of animals on farms and what constitutes the exact definition of organic foods. Even larger corporations like Horizon Organic and Aurora Organic Dairy face these issues.

Every company operates in an environment where there are stakeholders and factors affecting businesses. For any company to succeed proper environmental, economical, social, technological and legal must be analysed. Also the analysis of the stakeholders and their impact to the success of the company is necessary. In this report am analysing constitution UK plc a public company in the U.K. When I was carrying out this analysis I considered the changes in the strategic plans of the company and strengths, weaknesses, opportunities and threats for the company.

Constitution UK plc is incorporated in the United Kingdom. All political decision in Europe affects the company and I am going to use PESTLE of SPECTACLE model in analysing the business environment of constitution UK plc. The company operates in an environment where labour laws are observed to the letter and the economy is fairly stable. Stakeholders also play a very important role in the success of a company. Therefore any company should strive to analyse the importance of any stakeholder and their usefulness in policy making of the company.

In analysing business environment I will start by analysing political environment, economical environment, social environment, technological changes environment, legal environment and the natural environment itself.

Political

Recently, there was change of guard in the political scene in the United Kingdom. Tony Blair left power and somebody else took over. The change of guard in the United Kingdom did not affect business environment very much although the company felt a little positive change. The current environment for business in the UK is very supportive to the type of product the company is offering.

Economic

Economical environment involves how the company performs financially and what the financial strength of the company. Constitution UK plc has a fairly stable financial base and they can acquire any subsidiary in any country or county with easy. The company performed very well in terms of sales and the profits were very good and they have a very good name with Banks meaning that they are able to secure credit without much hustle. The company has a small debenture issued to the public with an interest rate, which is small. The founders of the company are ready to inject more capital in terms of rights issue or another public offer.

Social

Social environment entails the analysis of the social events that affect the company and how it changes. The company has a good social responsibility i.e. through sponsorship of local football clubs meaning that the company is attracting the local with its products. The company is situated in an area where the neighbourhood is full of well-known economic sabotage’s. For the company to derive well in the same environment they have assist the community in putting up a security unit in the area.

Technological

Technological analysis involves the analysis of the company’s ability to move with changes in the technological changes. The company has computerised all its operations and have taken their employees for training in the use of computers. All production is computerised and it is easier for the managing director at the head office to monitor the operations from his office because the company has networked all its systems. The company has also put in place security systems, which are computerised, and any person visiting the company is screened and Television circuits, which are strategically placed in the company’s premises, monitor his movements.

Legal

Legal analysis analyses the ability of the company to cope with the existing legal position, and the new rules. Constitution UK plc is able to comply with the UK rules i.e. the Income Tax rules, employment rules, international labour organization rules, trade union rules and the internal rules set aside. The company recently dismissed an employee on the grounds of misconduct where proper procedure was followed. However, the employee decided to go to court citing improper termination of employment and the company represented this case in court very well which they succeeded. The company’s lawyer is a well know person in the legal fraternity therefore is well represented.

Environment

The company is operating in an environment, which is already polluted; therefore it is the responsibility of the company to ensure that does not produce pollution agents. The company also does not use plastic bags but plastic containers to damp their garbage, which is collected twice per day. The dirty water from the industry is passed through a cleaning channel before been released to the outside environment. The smoke from the chimneys of the company is already subjected to chemical purification for avoid a scenario a social fight with pressure groups of environment. The company has entered into a memorandum of understanding with one of the environmental pressure groups for the exchange programs.

Stakeholders

Stakeholder is any person, organisation or society that is affected by the business or the environment the business operates in. They may be having direct or indirect interest in the business of the company where they may get in contact with the company regularly or on occasional basis. Stakeholders may include shareholders, management, employees, banks, mortgage firms, government, trade unions and pressure groups.

Shareholders

Shareholders are the owners of the company and they are interested in the profits of the company. Their reward is always dividends, capital growth and social responsibilities. For the company like Constitution UK plc has very good profits and has been paying good dividends to their shareholders and it is attracting more people willing to be shareholders of the company. This company is enjoying good growth. The shareholders if they start sharing their shares, the company may loose value; therefore a good dividend policy is very important.

The management and employees

The management and employees are May shareholders or just employed. These are the people who participate in the day to day running of the company. Their service is very important to the customers and to other stakeholders. The employees of this company are interested in the good pay, promotion, job security and prospects of the company. The employees will start leaving the company if it is rumoured to have a bad financial position.

Customers

Customers are the people who buy products from the company. The prices offered by the company attract customers. Apart from the price the customer also will the interested in the success of the company since he has been using the products of the company for a long period and he is still using them. The customers will also want to have a safe product for their use and the company I am observing has acceptable good product that has been approved by the government authorities.

Suppliers

Suppliers of the company are those people who offer services and goods to the company. They will be interested with the financial success of the company because the will want to have regular business with the company and major those who are offering credit services to the company would wish to see their money being paid back. No supplier will supply to a company that has poor financial position and bad credit worthiness. The company has strong financial position and has created good name with their customers.

Local Community

The Local community is interested in the success of the company since they are the providers of labour to the company. Constitution UK plc has employed 1,500 employees who are members of the community where they are operating in. The local community is also interested in the reduction of pollution, which the company has decided to use non-fossil fuels which does not affect the environment. They have also decided to use plastic containers for the damping of garbage and not plastic bags. They have also taken up to themselves to sponsor a local club which is participation in a national league.

The Government

A government is the governing authority in any country, which ensures that the citizens are getting social services and goods, and ensures there is rule of law. The government is interested in the business of Constitution UK plc because of the employment policy the government want to be implemented, the inland tax revenue, excise and customs taxes and social responsibility of the company. The government of the United Kingdom is interested in the business of Constitution UK plc because the company is in a good position and it contributes to the revenues of the country and it employs citizens of the United Kingdom. Recently the company employed an employ who has a forged passport to the United Kingdom from Somalia and a forged working permit. When the company was making returns this normality was discovered.

Trade Unions

Trade unions are representatives of employees’ interests. They are interested in the success of the company because if the company is doing poorly financially the company will not be able to pay its workers. Therefore the union ensures their interests are represented in decision making of the company. They ensure there is minimum wage policy implementation.

Banks and other financial institutions

These are institutions that give credit facilities to the company and they also help the company in investing the excess funds. Since they are the providers of the funds, they are interested in a strong position in the financial segment of the company. In the case of Constitution UK plc has good relation with their bankers and credit providers.

Pressure groups

These are groups that are interested in the business action. They may include environmentalists, lawyers, accountants and other bodies that oversee proper usage of the company resources.

Conclusions

The stakeholders and environmental factors are very influential in the success of the business. Stakeholders always put their interests first and they want them to be fulfilled. Without the satisfaction of their interest the company cannot succeed. The shareholders must know whether they will get an investment return for their continual investment in the company, employees will also be interested in a good pay and promotion. Banks and other financial institutions will also look on how well the company pays their loans and how the financial statements are reading.

Customers are interested in a good and safe product at a good price so that they will continual patronising the company. In overall they cannot patronise the product of the company if there is not taken care of. The government is interested in the taxes they receive from the company.

In overall the company will succeed if it carries out proper business analysis in terms of political, economical, social, technological, legal and environmental. Without proper analysis the company will be destined for destruction.

References

1. U.K Plc Website.
2. D. Hitchcock; Environment and Business; Routledge, 2001
3. C. Anderson, D. Miles; Business Management
4. Slack And Lewis, M. Lewis; Operations Management; Routledge, 2002
5. Monir Tayeh; The Global Business Environment; Mc GrawHill, 2002
6. Michael L, Understanding Business;Environment; Routledge, 2000
7. U.K Plc  Website
8. D. Hitchcock; Environment and Business; Routledge, 2001
9. Michael L, Understanding Business;Environment; Routledge, 2000
10. Monir Tayeh; The Global Business Environment; Mc GrawHill, 2002
11. C. Anderson, D. Miles; Business Management
12. Slack And Lewis, M. Lewis; Operations Management; Routledge, 2002

Introduction

What Is the Problem?

In recent times, there has been an intense underlying issue regarding the amount of businesses within the UK that are not adapting to the modern business environment and embracing modern technologies for further economic gain. Noted by the office for National statistics (2009) that 76% of the UK’s business claimed to have a website, yet only 15% had completed transactions online. Furthermore, the issue lies deep within the fundamental business characteristics and the way in which businesses choose to operate and compete, leading to online sales via websites known as e-commerce, reaching 115bn in 2009. Figures from the same study also demonstrate that the predicament shows no sign of slowing as e-commerce sales increased by 23% from 2008 to 2009, showing a rise of 22bn, suggesting that many businesses are missing the chance to join the online market place whereby opportunities for the growth of a business appear limitless (Scupola, 2003).

Rosenbloom (2004, cited in Harrison & Waite, 2005) proposed that e-commerce technology is now viewed as an integral part of marketing channels and distribution systems. However the UK government acknowledges that there is a slow uptake of e-commerce in SME’s, particularly among micro businesses (UK Online, 2002) whereby many of the UK’s SME’s may be left behind, leaving the larger companies to dominate the e-commerce world (Harrison et al, 2005). Furthermore, the issue is emphasised through the suggestions of Julia (2002) stating that small and medium-sized businesses (SME’s) make substantial contributions to national economies and account for an estimated 80% of global economic growth (Julia et al, 2002).

This document aims to identify the numerous relevant factors preventing the assimilation of e-commerce and the capitalisation of its benefits within the UK’s SME’s. Conversely, the research also attempts to outline the previous benefits founded with its adoption and the current levels of practice within the recognised SME’s. Such known benefits may provide motivation and incentives for the apprehensive SME’s who are failing to embrace the advances in technology, as well as offering a range of potential opportunities for any traditional organisation to engage in the e-commerce transition whereby a business can ‘dominate the electronic channel and thereby control access to customers and set terms of trade’ (Walters & Lancaster, 1999, p800 cited in Harrison, 2005).

Following similar research in more economically developed countries such as USA, Canada and Australia appear to have made more progress as they have become the global leaders in e-commerce assimilation (Norton, 2000, cited in Quayle, 2002). This investigation will discuss whether these barriers and benefits still exist or that SME’s have adapted to the modern business environment and have effectively engaged in e-commerce. Consequently, have further beneficial or detrimental factors emerged and influenced integration of internet based transactions.

What Is the Purpose of This Study

For the purpose of this investigation, the term e-commerce will be used in the true sense of its concept and not divulge into the notion of electronic business (e-business). It will however include activities such as electronic mail (e-mail) and mobile commerce (m-commerce) whereby their fundamentals coincide with the essential aspects of e-commerce.

The primary purpose of this investigation is to identify the barriers in the UK’s SME’s in their adoption of e-commerce. These identified barriers may differ from those faced in other countries, regardless of economic development. In addition, this paper will study the benefits found once the e-commerce transition has taken place and how they may have become advantageous to any developing SME. It also aims to analyse the results and test them against the findings established within other international SME’s. Throughout this analysis, the paper will thoroughly investigate and critique the growth of the UK’s SME’s and how e-commerce has enabled it to do so.

What are the SME’s barriers to entry

This study aims to investigate the way in which SME’s perceive e-commerce and devise a catalogue of factors that provide obstacles for its adoption. In doing so, the author aims to bring these issues in view of both business and governmental organisations, with the focus on those assisting SME’s to further contribute to both the local and global economy. Whether these issues exist in reality or are just ignorant perceptions, the fact of the matter is that these issues still appear to hinder the assimilation of e-commerce within SME’s. Barriers to adoption can occur for numerous reasons and many issues are inter-related, however, they will not be restricted to only the following factors:

Internal

• Start up costs
• Technical knowledge/computer literacy
• Access to technology
• Security of technology

External

• Business partner(s) access to technology
• Lack of governmental support

In addition to the primary aim, the secondary goal is to try and locate relationships between these barriers and whether or not they have a direct correlation with the demographic and financial features of the external environment. Furthermore, it will also attempt to identify any linkages between previous barriers and the technological affluence or perception of SME’s directors as previous research has shown that the owner’s opinion of e-commerce has a major influence on its possible implementation, and if so, what benefits does it bring.

Existing Benefits Achieved by Sme’s

This investigation will recognise the major benefits already achieved by SME’s who have utilised the capabilities of engaging in e-commerce. These benefits may need to be analysed by budding SME’s or MSME’s (micro, small medium enterprises) or any developing business for that matter, in order to fully understand, make relevant and integrate e-commerce successfully within their organisation. This investigation can also be used for governmental organisations to utilise e-commerce as an adaption of its services that supply SME’s, which will in turn provide benefits to both stakeholders involved. This may potentially lead to a future development of electronic infrastructure, which will in turn greater it’s usage and by virtue of EOS (economies of scale) will lead to an increased level of economic efficiency. This study will address those benefits but will not be constrained by such:

• Increased audience levels (market reach)
• Reduce cycle time
• Higher levels of turnover
• Increased productivity
• Lower marketing and distribution costs
• Competitive advantage
• Increased profit margin
• New business opportunities

These existing benefits will provide a basis to identify any trends with the demographic data found, along with its barriers. This information will also be examined in comparison to the technological perception of the directors of a given enterprise in order to understand whether or not the attitude of the director directly influences the benefits achieved, similar to that of the director’s perceptions and previous success within the business environment.

Sme’s Adoption of Technology

In order to grasp the usage of technology within SME’s, the author has made efforts to discover more about businesses that have embraced technology and how they may be putting to use the advantages of the internet.

The levels of adoption and the processes put in place in order to assimilate, as well as the trends of usage are all imperative to the overall validity of the investigation. Although the author earlier conveyed that the study will concentrate on the true definitive characteristics of e-commerce, in order to fully investigate the usage and perceptions of e-commerce, the study must consider aspects of e-business to fully identify and understand the correlation of internet usage and the potential benefits it possesses. Furthermore, the study will advance deeper and discuss whether or not linkages exists in the technological affluence, literacy or perception of the SME’s director and the benefits and barriers achieved through the adoption of e-commerce.

Literature Review

The UK Market

Throughout the investigation, the author noticed that the majority of research was conducted in more economically developed countries (MEDC’s), with the United States being most popular. However, this study aims to conduct the majority of its research within the UK environment as well as delving into the international and emerging markets whereby the growth of e-commerce is still primarily at an elemental level. Although that particular research is valid, it merely aims to provide a contrasting statistical viewpoint to that found in the UK. Studies by Benjamin (2000) and Pulley and Sessa (2001) indicate that there is a limited amount of analysis of e-commerce in SME’s, however there is a wider acceptance on a number of factors. In particular, SME’s who are determined to achieve a competitive advantage require an improvement in levels of e-commerce and the need to develop credible approaches for its implementation. Further studies conducted by Standing and Stockdale (2003) emphasised further issues of concern whereby the ‘motivation for adoption and use of e-commerce by SME’s are overlooked and underestimated’ (Standing et al, 2003. p;2). Further issues within the same study indicated concern surrounding categorised groupings of SME’s and their perceptions to adoption.

In contrast to the UK market for e-commerce, in developing areas of the world, including countries such as Egypt, research has show that ‘governments have been eager to apply the emerging information and communication technologies to join the world in the development and realization of the digital economy’ (Kamel and Hussein, 2002. P;2). Therefore, e-commerce growth in Egypt and other developing countries may decide to utilise the research and examples of that in the UK in order to greater the adoption levels within SME’s. Conversely, UK governments may choose to analyse the way in which developing countries introduce e-commerce and its technological infrastructure in order to fully understand what factors they provide as benefits or barriers.

Following the studies on the international and emerging markets, the author aims to reemphasise that this research is merely conveyed as a contrasting viewpoint in order to further understand the way in which e-commerce adoption in the UK is both perceived and achieved.

Barriers

E-Commerce Growth and Development

Originally, electronic commerce was identified as the facilitation of commercial transactions electronically, using technologies such as EDI (Electronic Data Interchange) and EFT (Electronic Funds Transfer) in the 1970’s. Furthermore, increasing developments in technology in the 1980’s lead to the creation of ATM’s (Automated Teller Machines) and telephone banking which were also noticed as forms of electronic commerce. It wasn’t until 1990 that the development of the World Wide Web and the modern day internet also known as the ‘6th Continent’ by Yongxiang, that the term coined e-commerce was specifically designated to the exchange transactions which take place over the internet, including buying and selling of information, service or goods (Schniederjans, 2002).

Since the conceptualisation of e-commerce, researches have studied the barriers that exist which may prevent its adoption within SME’s. Whether these barriers physically exist in reality or whether they are merely a perception, the facts remains that they still provide an obstacle for e-commerce assimilation within the UK’s SME’s. Studies conducted by Cragg and King (1997, cited in Shah et al, 2000) discovered that the strongest inhibiting factors to SME adoption include lack of ICT knowledge, lack of managerial time and limited financial resources. All of which factors appear to apply to resistance to change and possibly suggest an underestimation of the potential benefits to its adoption. Further studies by Dowler and Lawrence-Slater (1998) highlight ‘technological phobia’ and ‘no perceived benefits’ as realistic barriers.

Since these studies were conducted at an elemental stage of e-commerce, further investigations have been carried out since. Investigations undertaken by Marshall and Mckay (2002) found that in recent times, SME’s are reluctant to adopt due to difficulties identifying and measuring costs, benefits and risks associated with IT adoption and investment. Furthermore, research conducted by Edwards (2007) and Hudson et al (2007) indicated that the lack of strategy for evaluation was also a major inhibiting factor to adoption. Although all studies identified provide valid and important evidence, it is the most recent information that supplies the most pertinent, as it considers factors within the modern business environment in comparison to those noted within the primary stages of e-commerce development.

The Role of UK Government in the Growth of E-Commerce

In order to fully investigate the role that government plays in the adoption of e-commerce, the author aims to find out whether they are an enabler of its adoption or a characteristic of its barriers.

A study by Keindl (2000) portrays that SME’s are generally unwilling to develop e-commerce strategies or to change their current business models, despite the government introducing campaigns such as the CW2000 project, a European funded project to encourage internet adoption amongst SME’s in the West Midlands of the UK. As discussed earlier, there remain a variety of barriers to the adoption of e-commerce and regardless of the government initiatives, certain barriers still exist and are chiefly found within the internal features of an organisation. Kshetri (2007), stating that start up costs and the relevance of e-commerce within a particular SME to be key factors in its adoption. Furthermore, additional research by Beckinsdale and Levy (2004) reported that neither pressure from competitors within the same business environment or governmental initiatives provides any pressure upon the adoption of e-commerce, and that the chief reasoning for its assimilation is concerned with customer satisfaction.

As a result of these findings, certain infrastructure should be implemented in order enable to the transition of adoption as it appears that governmental frameworks are unable to do so.

Perceived Barriers to E-Commerce Adoption

Early studies by Tonatzky and Klein (1982) found that innovation is more likely to be adopted when it is compatible with an individual’s job responsibility and value system. Although this study portrays a vague acceptance of innovation, it is definitely applicable to e-commerce as an innovative entity and its adoption and application within a value system, or for the purpose of the study, SME’s.

Further studies conducted by Ratnasingam (2001, cited in Hussin, 2005) to identify factors that may discourage adoption include the perceived lack of security, customer readiness, organisational inertia and lack of knowledge. Additional studies by Darch and Lucas (2002) also conveys the perceived barriers to adoption as lack of awareness to what e-commerce actually involves and lack of e-commerce related skills. Therefore, adoption is far more complex than earlier studies portrayed and is a decision that involves a variety of interconnected issues, which include both internal and external factors. Adoption therefore, must be seen as a gradual process, rather than an individual occasion and will be discussed further in the levels and stages of adoption sections.

E-Readiness

E-readiness is genuinely defined as the degree to which a society is prepared to participate in the digital economy with the underlying concept that the digital economy can help build a better society (Krull, 2003). Krull makes reference to society as a whole, but for purpose of the study, the author will understand the society as being an organisation or SME. Huang et al (2004) describes e-readiness for enterprises important and that it will lead them to a more positive direction in managing their relationships with key stakeholders as well as providing the opportunity to access quality information, reduce the digital divide and create new business opportunities (Kurnia, 2008 cited in Krull, 2003). According to the e-readiness rankings report (2009) the UK is placed 13 suggesting SME’s are in a good position to adopt e-commerce as all the foundations are in place.

Benefits

Significant levels of research into the realisation of SME benefits of e-commerce adoption have been conducted thoroughly in recent times. A report conducted by Poon and Swatman (1999) regarding the benefits achieved refers to the fact that e-mail and document transfer have both been useful to SME’s. Since then, e-commerce and researchers have moved on, with many authors agreeing on the benefits of e-commerce, however further discussions have arisen in regards to the way in which benefits are not achieved automatically. Wilson, Daniel and Davies (2006) stating that adoption does not however, of itself, guarantee that the intended business benefits will be achieved. They are also of the opinion that, along with Pawar and Driver (2000, cited in Quayle, 2002) who also conducted similar studies, that despite the awareness of potential benefits, not every firm is ready to embrace e-commerce as a business tool.

Economic Benefits

Once the adoption process takes place, there are two main benefits that a SME can expect, economical and strategical. For the purpose of the study, the author will concentrate upon the economic benefits incurred through the adoption of e-commerce. With the UK’s total spend through e-commerce reaching nearly ?56billion in 2010 (IMRG, Capgemini, 2010) and expectations for the market to grow by 110% in the next decade, the financial benefits are obvious.

Studies conducted in the UK’s SME’s by Clegg et al (2001) concluded that three issues are likely to have an effect on the uptake of the internet by SME’s was the perceived benefits, organisational readiness and external pressures. However, Dongen et al (2002) argued that much of the literature supposes that ICT adoption is for opportunistic reasons, such as cost, rather than for strategic reasons. Furthermore, recent surveys suggest that the main reason for adoption amongst UK’s SME’s is to increase sales (Actinic, 2002 cited in Simpson et al, 2004). Although literature suggests that the chief reasoning behind e-commerce adoption is for financial benefit, the actual reality of attaining economic growth is difficult to achieve. Furthermore, the research by DTI (2001b) suggest that the financial benefits come about through the reduction in expenditure and the increase of opportunity gain, as advertising costs can be reduced through having a web presence.

Illusions and Promises

Additional studies by Chrysostome and Rosson (2004) support the fact that it is certainly difficult to attain economic benefits. Subsequently, they devised a framework, consisting of eight factoring suggestions that convey both the illusions and promises of the growth UK SME’s and they’re engagement in the international market. They highlight the view that not all expectations of innovative advancements are recognised, with an example of the invention of the printing press in 1450. They suggest that many of the perceived benefits are illusions while promises are realistic and attainable benefits through the process of adoption.

Illusions:

• MARKET PENETRATION (difficult international market)
• GLOBAL COMPETITION (intensity)
• COSTS (difficult to attain)
• LEGALITY DIFFERENCES (foreign trade laws)

Promises:

• SPEED OF MARKET ENTRY (instant)
• VARIETY OF MARKETS (penetrate numerous markets)
• ENTRY MODE (choice = minimised risk)
• INTER-ORGANISATIONAL NETWORKS (reduced costs)

Do or Die: Internationalisation

The rate of the occurrence of Internationalisation for an organisation is an important characteristic in any neo-classical approach. Furthermore, in evolutionary theories, stage by stage development is considered necessary so that cautious progress can be made, ensuring that an enterprise can build resources, gain knowledge of international markets and therefore develop a stronger capability (Chrysostome and Rosson, 2004).

Added studies by Peterson et al (2002) found that the internet can speed up the rate of enterprise internationalisation, especially through the reduction in costs incurred by SME’s. As a result, SME’s should worry less about the amount of resources they have when aiming to penetrate the international market. This leads to the ‘Born Global’ concept derived from Knight and Cavusgil (1996) suggesting that SME’s can ‘leapfrog’ the primary stages of the neo-classical internationalisation process.

Although numerous advantages exist through SME internationalisation, there is also an element of risk associated with its development. The most noticeable barriers reported by SME’s are included in the Internationalisation report of European SME’s (2010). The reports illustrates that the barriers exist in two separate categories, internal and external.

Internal

• Price of own product or service
• High cost of Internationalisation

External

• Lack of capital
• Lack of adequate information
• Lack of adequate public support
• Costs/difficulties with extended transport partnerships

Although the majority of the barriers are objective, sum issues within the external barriers are perceived and do not necessarily exist in reality. Consequently, UK SME’s are generally not aware of the existence of public support programmes for internationalisation (Mendoza et al, 2001). Having discussed the promises that e-commerce adoption and its ability to internationalise a business, the author will now examine the illusions that appear to be embedded within the perception of UK SME’s.

Large scale global competition lies waiting for those SME’s who aim to utilise the internet as a tool for internationalisation. Fillis (2002) found that exporting SME’s in the UK experienced pricing and promotion difficulties in regards to those displayed by competitors. This was a greater problem for those who rely upon the internet as its main operational medium. As the enterprises discussed are relatively small in capacity, they’re limited resources make it difficult to match competitors budgets and prices (Sawhney and Mandal, 2000). As well as the intense internet global competition, the so called ‘savings’ will now be discussed.

Contrary to the perceptions of budding SME’s, online business incurs significant levels of cost. In contrast to view that the internet generates cost savings, in reality, these savings are far less noteworthy than initially thought and studies by Fattori (2001) state that in many cases, SME’s have actually experienced higher costs. This is largely accurate for SME’s who have penetrated the international market as Heart and Priskin (2002) state that internet costs savings are cited to most often occur in paperwork, customer service, intermediation and advertising and promotion. However, they also conveyed that the actual savings incurred differed with the size of an enterprise. Further studies showed that larger companies were more likely to save in customer service where as SME’s were expected to save on advertising and promotional costs (Riquelme, 2002). Apart from these potential variant costs, other costly expenditures exist with the initial creation of internet based commerce. These costs consist of website creation, including software and hardware, maintenance and updating and website translation or cultural adjustments should the SME wish to penetrate the international market (Chrysostome and Rosson, 2004). Futhermore, a standard 10 page website with e-commerce capabilities may cost around ?2500 with additional fees for forums, interactivity, Search engine optimization (SEO) and content management [www.toucher.co.uk/website-price, cited in 2011].

M-Commerce

Tiwari (2007) defines Mobile Commerce as any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device. As Tiwari explains, m-commerce has the same basic definition as e-commerce, however is achieved with portable technology. Since its origination in 1997 through mobile-phone enabled Coca-Cola vending machines in Finland, using SMS text messages to receive payment, the mobile industry has revolutionised the portability of business transactions (Ahonen, 2002). In recent times, m-commerce has developed greatly and since the invention of Apples, Iphone in 2007, the levels of purchase using a mobile devise has risen dramatically. Findings from the Broadbank m-commerce content report (2010) displayed that 46% of UK consumers had purchased using their mobile phone. Furthermore, Raicu (2001) believes that m-commerce provides numerous benefits including independent access any time, access on demand anywhere and use of devises that suits the needs of the consumer, for example mobile phones, laptops or Tablets. As well as possessing all the attributes of e-commerce, Khosrow-Pour (2006) suggests that enterprises are using mobile devices to re-engineer and speed up internal and connecting business processes. Furthermore, Nysveen et al (2005) suggests that this is possible since employees and partners can connect to ‘back-end’ applications needing the finalise sales and in turn reducing the sales process and eliminates extra travelling costs. Therefore, a SME can utilise m-commerce in the same way as e-commerce with additional benefits of providing accessibility anytime, anywhere (Raicu, 2001).

Benefits for UK SME’s

Following a plethora of literature regarding the concepts and potential of e-commerce, the question remains whether SME’s have benefited from its adoption. During the investigation process throughout this document, the author noticed that Poon (2002) and the degrees of success was a constant barometer. Poon stated that there having been various levels of success and that they are the reasons why e-commerce is more important than ever before. These factors have included the reduction in the adoption process of e-commerce in regards to both hardware and software. Secondly, companies have learnt from either their own experience or the experiences of others and are now finding e-commerce adoption easier. Finally, the rise in resources and programmes offered, many from government provide assistance for SME’s.

Although, many SME’s have utilised the adoption of e-commerce as previously discussed, Poon’s studies (2002) suggest that not all companies have benefited from it. Furthermore, even in favourable organisations with a respectable e-readiness, mixed success rates have been found, and those who have actually achieved benefits have either been insignificant or have had a short life p.

E-Commerce Adoption

In recent times, numerous studies have been conducted to investigate the levels of e-commerce adoption for the purposes of SME’s. The focus of this research has concentrated upon three crucial factors: the level of adoption, the stages of adoption and the factors that inhibit or permit adoption.

Levels of Adoption

In order for an enterprise to fully understand the levels of adoption, the author will discuss Grewel’s (2001) classification model to support SME e-commerce adoption initiatives.

Firstly, there is a risk in approaching the question of whether SMEs can be seen as a homogenous group in terms of e-commerce adoption, as there is a scarcity of literature. For example, while it is clear that the owner/manager is a significant driver for e-commerce adoption, it is only recently that research has begun to appear that investigates the motivations behind their move towards adoption (Levy and Powell, 2003). Therefore, for the purpose of the study, the author will use the model as a categorisation tool to homogenise SME’s theoretically.

• LEVEL 1: Landlubbers – SME’s have no intention of moving to the electronic environment. These businesses tend to be small, have little employees and occupy and small and stable market with no intention of expansion.
• LEVEL 2: Toe Dippers – SME’s that have basic computer needs and limited skills in using them. Unwillingness to expend beyond a minimal level but are of the view that the internet can be helpful for tasks on a day-to-day basis for use of e-mail and online banking.
• LEVEL 3: Paddlers – Participants of e-commerce and are sometimes registered within an e-marketplace, but carry out virtually no business through it. Have an eagerness to learn but a lack of confidence and ability to advance to a higher level of involvement.
• LEVEL 4: Waders – Categorised by SME’s that for reasons of choice or pressure from stakeholders, have moved into the electronic environment. The firms within are initiated in electronic services and are beginning to learn how to participate in online business.
• LEVEL 5: Swimmers – Businesses within this level are experts and are comfortable with many e-commerce applications and online trading is an integral part of their business.

Grewel’s (2001) classifications indicate that the diffusion levels are affected the resources and can be best targeted at specific groups to encourage higher levels of e-participation, rather than disperse the resources holistically across all SME’s (Levy and Powell, 2003). Furthermore, findings of Grey (2003) show further evidence that adoption levels are not merely down to resources but that adoption rates differ from country to country and that SME’s throughout the world are at different levels of adoption in comparison to others found in different countries. Additionally, both the levels, stage and rate of adoption is influenced by the conditions within that locality. As discussed earlier, the UK is placed 13th on the e-readiness rankings (2009) suggesting that the UK’s levels of adoption are reflective of the benefits already achieved by its SME’s.

Stages of Adoption

The second factor of adoption deals with the stages or phases of adoption. Cater-Steel and Grist (2004) describe the steps that should be taken to further adopt the internet, although they are also of the opinion that e-commerce will only be adopted as the need arises for the integration into the supply-chain and not just for the sake of having e-commerce.

Jeffcoate, Chappell and Feindt (2002) also explored the topic matter and devised a best-practise model for the process in adopting e-commerce. They indentified 11 imperative dynamics of success that are vital during the different phases of the adoption process. However, the most crucial issue raised was that the process which is normally segmented into numerous stages is definitely an ongoing process rather than a one-off event. Similarly, Rogers (1995) also subscribes to the view of adoption as a process with the 5 factors model of innovation adoption. Levy and Powell (2003) further assist Rogers with their adoption ladder framework and are of the opinion that most SME’s only see value at the bottom end of the ladder.Furthermore, there seems to be an overall agreement that the process in the adoption of e-commerce is indeed a process and is implemented in stages rather than an individual one-off occasion. Additionally, the stages are usually adopted at the lower end of the classification model (Grewel, 2001), slowly climbing the adoption ladder towards the more complex aspects of e-commerce.

Influencing Factors of Adoption

Qi (2007) and Kiong (2004) investigated the reasoning behind moving from neo-classical forms of commerce to the post-modern capabilities of electronic commerce. They identified a wide range of influencing factors, yet most were mainly regarding monetary benefits. However, further studies by Simpson (2004) conveyed that pressure from society was also a pivotal factor encouraging adoption. Scupola (2003) devised a framework that represents the factors influencing adoption. These factors have been categorised into three segmented groups including the external environment, organisational context and technological context. In addition, managers who perceived e-commerce has having a positive effect on the strategic value of an company posses a positive attitude to adoption (Grandon and Pearson, 2003) whereas Ramsey’s (2005) research into the differences in adopters and non-adopters found that adopters are far more proactive and have a greater e-awareness to indentifying technological possibilities.

Following the analysis upon the factors influencing adoption, the most notable appears to be the perceptions and attitudes of managers towards e-commerce within organisation. SME’s that have made to successful transition to utilising e-commerce have all portrayed an positive opinion of technological innovation and that it provides them with a opportunity to create a competitive advantage over rival companies and a basis to build better relationships with any stakeholders involved.

Methodology

Philosophy

Qualitative research has been extensively compared with quantitative research and has found three different theories about how knowledge is accepted known as epistemology (Bryman and Bell, 2007). Quantitative research has been labelled under the natural scientist theory of positivism (Saunders et al, 2007), which collects data and creates facts on what is in front of them. Hypothesis’ are made by reviewing past literature before undertaking research, which is then compared as to whether the predictions are correct.

Qualitative research is labelled at the other end of the epistemological spectrum (Strauss and Corbin, 1998) under Interpretivist or social constructivist (Bryman and Bell, 2007). This theory looks past statistical evidence and penetrates deeper into the information to identify dissimilar answers and read the reactions of people’s behaviour (Saunders et al, 2007). This has a very subjective view due to differentiated opinions and different minds of people (Strauss and Corbin, 1998), which can cause negative outcomes which will be discussed later.

Finally, Realism could be said to be in the middle of the two extremes, showing characteristics of both a positivist and an interpretivist (Bryman and Bell, 2007). Realism is comparable to positivism (Saunders et al, 2007) with its scientific approach to data but the theory is divided into two mindsets: Direct realism takes more of the positivist approach by looking at the data and producing results from what is in front of them (Bryman and Bell, 2007). However another mindset has been formulated in the form of critical realism (Saunders et al, 2007), looking past the direct realism and believe that complexities occur in data, which leaves the researcher creating their own interpretations of data (Bryman and Bell, 2007).

Qualitative V Quantitative

It has long been recognised that qualitative and quantitative methods produce different types of information. The use of quantitative methods permits statistical analysis using standardised measures to gauge and compare the reactions of a large number of people on a limited set of questions (Patton, 1997). By contrast, qualitative methods facilitate use of data that are perceived as rich, holistic and real for which face validity seems faultless (Miles, 1983 cited in Howard et al 2001).

These characteristics and the lack of standardisation of much qualitative data make them difficult to analyse and require that the researcher devote much time and effort to managing the data (Howard et al, 2001). In contrast, a number of quantitative indices are generally available and additional indicators can be developed by various means, including satisfaction scales and involvement levels. However, Lillis (2008) states that the knowledge that books and numbers have limitations as it doesn’t tell the whole truth.

Conversely, qualitative indicators are less readily available. A research design that includes a collection of these indicators is important for numerous reasons. Firstly, qualitative research can lead to the findings of unanticipated data that wasn’t previously expected. Secondly, qualitative methods can also assist the decision makers whose main desire is to gain an understanding to what the people studied actually think and why they think that as well as the values and motivations to that particular thought and behaviour (Van Maanen, 1983 cited in Howard et al, 2001). Furthermore, Bryman and Bell (2007) identify qualitative research as too subjective, on a person’s opinion, their perception could be based on a poor experience however, overall perceptions from others could be different. The data is also difficult to replicate, which is therefore a huge difficulty in analysing, unlike quantitative research (Veal, 1998).

To summarise, there is always going to be conflict between the contrasting methods and that both methods have advantages and disadvantages, yet each can be realised when used to research different topics. Furthermore, the author concurs with the opinion of Van Maanen suggesting that qualitative methods provide access to deep-routed answers.

Approaches

In the approach to deciding upon the research method, two means have been identified including both inductive and deductive approaches (Veal, 1998). Qualitative research takes on the inductive approach, in which a collection of data and a development of theory is a result of data analysis owing itself to paradigms of interpretivism. Whereas, quantitative research uses a deductive approach, in which theory and/or a hypothesis is developed to design a research strategy to test that hypothesis which owes itself to positivism (Saunders et al, 2007).

Although, both approaches provide contrasting paradigms and that they are divided rigidly, Saunders et al (2007) suggest that it is misleading and that not only is it perfectly possible to combine the approaches, but it may be advantageous to do so. However, as the author is aiming to understand why something is happening, rather than being able to describe what is happening, it is more appropriate to undertake the research, inductively.

Strategies

After exploring both Bryman and Bell (2007) and Saunders et al’s (2007) methods for research literature, the author noticed various techniques to devise a research plan. Taking a quantitative approach may include techniques such as questionnaires or experiments and provide statistical evidence. However, the approach taken by the author to conduct the research is via a qualitative approach and therefore its emphasis upon specific strategies such as observations, interviews and focus groups.

Further strategies may include Glaser and Strauss’ (167, cited in Bryman and Bell, 2007) Grounded theory whereby an alternative strategy for linking both theory and research is available suggesting that the research may build up a collection of theory throughout the ongoing process of research. An additional technique known as archival research makes use of administrative records and documents as the principle source of data. Furthermore, the data is part of an archival strategy and is analysed because they are part of the day-to-day activities (Hakim, 2000 cited in Saunders et al, 2007). This may become relevant for the purpose of the study as it assists qualitative methods of research within suitable environments, such as observations.

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