Which is the best organisation structure for ecommerce


To review alternative organisational structures for e-commerce. Activity

1 Match the four types of companies and situations to the structures (a) to (d) in Figure 4.23.

• A separate operating company. Example: Prudential and Egg (www.eaa.com).

• A separate business unit with independent budgets. Example: RS Components Internet Trading Channel (www.rswww.com).

• A separate committee or department manages and coordinates e-commerce. Example: Derbyshire Building Society (www.derbyshire.co.uk).

• No formal structure for e-commerce. Examples: many small businesses.

2 Under which circumstances would each structure be appropriate?

3 Summarise the advantages and disadvantages of each approach.

(a) Distributed

(c) New division

(b) Matrix control

(d) Autonomous company

Figure 4.23 Summary of alternative organisational structures for e-commerce suggested in Parsons et al. (1996)

Where the main e-commerce function is internal, the E-consultancy (2005) research suggested that it was typically located in one of four areas (see Figure 4.24) in approximate decreasing order of frequency:

(a) Main e-commerce function in separate team.

(b) Main e-commerce function part of operations or direct channel.

(c) Main e-commerce function part of marketing, corporate communications or other central marketing function.

(d) Main e-commerce function part of information technology (IT).

There is also often one or several secondary areas of e-commerce competence and resource. For example, IT may have a role in applications development and site build and each business, brand or country may have one or more e-commerce specialists responsible for managing e-commerce in their unit. Which was appropriate depended strongly on the market(s) the company operated in and their existing channel structures.

Senior management



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