INMA_A01.QXD

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 approxi-

mate 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 responsi-

ble 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.

STRATEGY FORMULATION

Activity 4.5 Which is the best organisation structure for e-commerce?

Purpose

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.egg.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.

Figure 4.23Summary of alternative organisational structures for e-commerce sug-

gested in Parsons et al. (1996)

(a) Distributed (b) Matrix control

(c) New division (d) Autonomous company