Article: Organizing for eBusiness

Are you organized for eBusiness?

Our informal survey says, “Possibly not”. In fact many organizations throw up an expensive web site using all the latest ‘glitter’ and find it a generally unsatisfying experience. Apart from the technical vs. sales and marketing issues of the website itself many organizations both in terms of appropriate organizational behaviors as well as of effective organizational designs has been sadly neglected by many established retailers.

You may have a business site with dedicated Web staff, yet it is poorly integrated within your parent organization and tasked with ill defined roles. A simple question needs to be asked. “Do you have a central Internet group (CIG) directed by a chief Web officer and composed of dedicated staff for each business function?” If not then depending upon your organizations size and abilities you need to implement a CIG or outsource those functions.

Typically, many conventional retailers have acquired organizational habits that are not well aligned to the needs of eCommerce. It should be noted that four undesirable traits or behaviors found in many organizations must be guarded against. You might find that increasing complexity in your company has resulted in inflexibility and slow decision-making processes. There is also a tendency towards internal conflict and stratification, as well as a leadership that would tend to emphasize capital investment as a solution to all problems. Finally, the movement towards centralized control, which characterizes a typical consumer goods business, will carry with it limited co-ordination among your departments and divisions resulting in a weakened sense of market trends and increased dissatisfaction.

These features are in direct conflict with what you should know about the cultural characteristics of pure successful eBusinesses. An eBusiness is predominantly a flat organization with quick decision making, where risk taking is encouraged and failure is merely education. Employees tend to work long hours at the office by choice and are very self disciplined. Typically such companies use guiding principles rather than procedures and tend to lead by example.

When these two types of cultural environment are brought together, unexpected and perhaps dysfunctional behaviors must be expected to emerge.

Given the cultural and organizational differences between “new” and “old” economy businesses, the way in which you as an established retailer should set up and manage Internet operations is therefore extremely important. One factor to consider is that small businesses are more flexible organizationally. You should consider that eCommerce has provided greater “e-quality” for smaller businesses in relation to their larger competitors.

You will need an increased willingness to seek appropriate alliances and partnerships, plus consider organizational designs, company spin-offs, etc., that will provide convergence to the integrated business model required to overcome these mismatches in culture and outlook.

The many advantages derived from the Internet must be exploited both within and between existing sectors of your bricks and mortar business. With the ways in which networked organizations are evolving, it should be realized that only those retaining an Internet culture in a parallel or centralized Internet group (CIG) style of operation closely identified with the eCommerce aspects of a business’s overall objectives will be successful. – John Shenton – August, 2002