Organizational Structures & E-business Strategies

An e-business strategy breaks down organizational barriers.

Companies operating e-business strategies feature organizational structures that support high levels of collaboration, networked services and features from both the old and new economy. Companies can operate pure e-business strategies or integrate e-business with their existing business processes and organizational structure.

Start-ups

New businesses have a choice of organizational structure from the outset, according to Walden University. They can operate an e-business model, offering online services or selling products via the Internet. The e-business model enables them to offer their products or services globally without setting up a local sales, marketing or logistics infrastructure to support the operations.

E-commerce

Existing businesses with an established bricks-and-mortar infrastructure can adopt e-commerce techniques such as email, websites and digital distribution to reach new markets and extend their business reach. By using e-commerce in this limited way, the business can retain its existing organizational structure. At that stage, it has not become an e-business.

E-enablement

Organizations adopting an e-business strategy go beyond the transactional changes of e-commerce. They use technology to improve the efficiency of key operations such as customer-service management, supply-chain management and collaboration. According to the netessence website, organizations that are e-enabling their business are moving decision making from the marketing team to the senior executive team, emphasizing its strategic importance.

Priorities

The objective of e-business is to create value in terms of customer satisfaction and revenue, according to IBM. Organizations should therefore identify the elements of their structure that can deliver the highest value through e-enablement and prioritize the deployment of e-business initiatives.

Structure

Organizations that e-enable parts of their business can choose whether to retain an existing organizational structure or move the e-business operation into a separate division, according to the Association for Computing Machinery. That enables the organization to assess the benefits of e-business before undertaking a wider transformation of the structure. Organizations with a strong physical retail network, for example, should compare the results of their online sales with retail sales, rather than eliminating a strong corporate asset.

Horizontal Structure

When an organization adopts e-business processes, it can take advantage of the opportunities for greater collaboration. E-business models feature high levels of networking to underpin collaboration and teamwork across organizational boundaries. The organization is likely to take on a horizontal structure, rather than a hierarchical vertical structure, using the flexible team culture to increase innovation and drive greater value.

References

• Walden University; Define E-Business Strategies for Business Startups
• netesssence.com; Executive Guides; Business to Consumer
• IBM; ebusiness Models: Integrating learning from Strategy Development Experiences and Empirical Research; Sugato Bagchi, et al.; 2000
• The Association for Computing Machinery; Strategies for Transitioning Old Economy Firms to e-Business; Edieal J. Pinker, et al.; May 2002