In this century, the people to people communication is very important. The internet rapidly growth it changed many people behavior of communication. And it also affects most of the industry and increased the performance of the productive.
In this report will try to present the different methods of enquiry system and show their characteristic. Evaluate the impact of online shopping in the MNC of food retail sector. In addition, will using SSM model to explain the impact on IS planning of online shopping. And will also use Effect/Probability/Action Grid of consequence analysis techniques to analysis the impact of online shopping on the MNC. At last, we will work on the ethical issues of online shopping on the MNC.
Different kind of Enquiry Techniques
Introduction of Inquiry System
An Inquiry system (IS) is a system which is used for finding the truth and knowledge based on two or more objects that inter-related. The objects of an inquiry system are unique and special data that used to convert to valid knowledge for action. A guarantor will evaluate the accuracy of the result and it is the most crucial factor of an IS because it literally influences everything it does (Mitroff & Linstone, 1993). A suitable enquiry method can help to trim down the risk and understand the existing problem situation.
Normally the problem can be introduced in two-way, bounded an unbounded problem. The unbounded problem means it do not have boundary of the problem situation. It means the problem can be turned on infinity. During the situation, the viewer will stand in different point of views based their assumption of inquiry. Unlike bounded problem it does limited on boundary.
Inductive-consensual normally relies on number of observation or thousand of individual data. This methodology always applied the situation which not complicated and structured. The finding can be easily got from the pass observation. For example, pass experience and history. The concept of this system is to get the best answer by multiple individual collected sources. And it also depends on the integrity of the process.
Delphi is one of kind of this enquiry system. This system started to collect the answers from a group of experts. And it consolidates those and removes the non-sensible answers. The finding will be performed by the most reliable source and answer from the collected data. The system will start to debate those answer by roundly basic. After few around debate, it will come out the reasonable answers. Then the system will use the final answer to form a theory in order to explain the situation.
Every enquiry system is having own weakness. In this system, it need spent a lot of time for collecting the data and observation result. It is very time consuming, and also it only suit for the well structured situation. There was a case stated in "The Unbound Mind'. It said for the expected tonnages of steel produced by Japan versus the United States in the year 2000 (Mitroff & Linstone, 1993). The result may have so many combinations since the expert are distributed in different country and location. It is very time consuming to repeat the debate process and to get the reasonable answers.
Analytic Deductive is one of the common enquiry systems we used today. And it widely used on mathematician, scientists and physicist. Besides, it used at universities as a way to perform research. This methodology is based substantiate theory, formula and logical reasoning to predict and explain the situation. (Mitroff & Linstone, 1993).
This advantage of this approach is the conclusion will be based on and supported by theory and formula. And it made the conclusion become more realistic and accuracy.
However this approach also have disadvantage. As the results are based and supported by formula and theory. In case the guarantor does not similar with that. It may lead unstable answer.
Although, it having such disadvantage. However, it stills the most efficient method of the enquiry system. It was because it reduced the time consuming to collect the data and observation result.
Unbounded Systems Thinking and the Multiple Perspective
The Unbound Systems Thinking is the next generation thinking techniques we used today. Although this is new set of thinking technique and also design for the mess situation. However no one can guarantee that it can solve any problem situation.
As stated by Mitroff & Linstone, Unbounded Systems Thinking can be call as "the Fifth Way of Knowing". And it also represents it as Multiple Perspective during the enquiry.
The Multiple Perspective contains three component, Technical / Organization and Personal perspective. It used those components in order to address the complicated and mess problem situation. (Mitroff & Linstone, 1993). Originally, the Technical perspective was learned from the older enquiry system. And the multiple means added two perspectives in order to deal with complex problem and mess situation.
Interaction between those perspectives is very important. And those should connect together to form the relationship with each other. However those perspectives have to able to count all the different components into account. (Mitroff & Linstone, 1993).
Planning of the Research
The Research planning will focus on online shopping of MNC in food retail sector. And we are going to use below models and methodology in order to analysis the problems.
Soft System Methodology (SSM) is one of famous analysis tool developed by Peter Checkland in the early stage at the University of Lancaster in UK (William B.,2005). This is a tool to analysis the unstructured problem in real life. And we will use this to perform the research, analysis the impact of technological innovation at the online shopping in the MNC from the food retail sector. SSM is mainly focus on natural, society, politic and human behavior. (Peter C.,1981) And it is suitable for our case study topic.
SSM generally separate in seven processes as below.
- Unstructured problem situation (Capture From Real World)
- Expressed Problem Situation (Capture From Real World)
- Root Definition and Relevant Systems (System Thinking applied on Real World)
- Conceptual Models (System Thinking Applied Real World)
- Comparison ( Compare of the Model)
- Discuss about change (Discuss on Real World)
- Perform Action (Action on Real World)
In the phase one, we have to define the problem. And now we are facing problem is how information Technology using in the online shopping that affect the MNC of Food retail sector. The problems appear that are unstructured in this stage. The data collections have to perform before express the problem on phase two.
In the phase two, we got defined problem from phase one. And we have to start to express the problem by using Rich Picture. The Rich picture will be containing human to human interaction, process, conflicts between stakeholders, issues and constraints etc.
In the phase three, we have to create the root definition in order to generate the CATWOE. The root definition shall included parties of situation which it involved. For the CATWOE it used to present the human activity of the situation.
In the Phase Four, Conceptual Model will be created when root definition is well defined. And it used to list the activities from root definition.
In the Phase Five, Once those tools are created. We will start to compare the models and real world. And perform discuss to and get the related change. Finally, we have to perform the related action to improve the situation.
This research will also perform some business strategic such as macro environmental by using PEST analysis to assess technological innovation of online shopping on the MNC in food retail sector. And using SSM to assess the impact of technology IS strategic planning and IS development.
And finally we will perform consequence analysis for risk assessment, and also use the Effect / Probability / Action Grid to assess the potential problem on online shopping in MNC and how to perform preventive action to take care those situations.
SSM is design for handle complicated structure in the real world situation. And now we are facing a complex, un-structure problem and it included large amount of interaction in the real world. It is a way to use the systematic method to order to solve it step by step. SSM it is good fit for this mess situation.
As the problem we are facing a complex, un-structure problem and also included the large amount of interaction in the real world. It is very hard to include the entire problem during the phase 1 of SSM. In this case, we have to define it very carefully and include all possible problems situation.
Overview of online shopping on MNC(s)
Grocery shop is one kind of the food retail sector. The traditional grocery shop provides a range of goods that we used for living. Online shop made the change of people behavior because as the internet rapidly grow. People can easy to access the internet even travelling by bus. People can stay at home to order any goods they like. Unlike traditional, it works 24 hours per day, 7 days a week. Also online shop provides the delivery services. Customers do not need to drive a car to downtown for buying the goods. Thus, it reduced amount of time and money also environment-friendly.
Impact of online shopping on the MNC(s) PEST analysis
Taxation would be a critical issue for most of the MNC's online shopping business. Its major reason was because different country may offer different terms on calculating online shop's profit. Sometimes, it becomes an unexpected cost for retailers. Moreover, different country may have different types of tax which retails may not know. Even though there's same type of tax, i.e. profits tax or value added tax; the calculation method can also be different.
As before, China is tax free for online retailers or merchandisers. However start from 1st Aug, 2008, China government enforces the online retailer or merchandise to register on Beijing administration for industry and Commerce in order to keep track the online business profit. (Ecommerce Journal, 2008).
Another factor which MNC should focus on should be the regulations or laws in different country. Some government may encourage on several types of industry or business or even product, it may grants special offer or simplify the registration procedure so as to attract more investors. If MNC got these information updated, they may get benefit from that again.
So, while MNC wants to enter into a new country, they should put more focus on the tax issues, and government policies, also they should make provision for the tax expenses so that budget of the company may not be so tight. Moreover, they should keep track on the tax updates in different countries in order to get more tax benefits or save more tax expenses.
Online shop is a new business opportunity for MNC, because it can provide non-shop operation for the shop. People can buy the goods anytime, anywhere. People can save time in window shopping and also the travelling time. Most of the people may even shopping while office hour. As it's so convenience, it can always stimulate the economy. Especially in festivals, people can buy gifts much more easily, just shop in the internet, payment by credit card, and fill in the address, and gifts can be delivered to the receiver. Although online shop can be used for shopping, ordering, but it still needs several workers in the back office in order to process the order. Moreover, delivery needs workers to process also. As a result, MNC will hire many local workers to perform such tasks; hence, it creates many job opportunities in the country. This can also bring up the economy.
In the other hand, as non-shop operation can save more costs, such as saving rental expenses, electricity expenses, work force expense, products sold on the internet would be much cheaper, it would encourage more people to buy on the internet and hence internet industry must take the advantage.
Moreover, it would also benefit for the logistics industry, it was because the online shopping delivery would depends much on the courier and express delivery as customers may demand on a "Fast" deliver. So, before entering into a country or city, MNC may do some research on the internet industry and logistics industry, otherwise, online shopping doesn't work always.
Culture might be a major issue for social factor. Different country may have different shopping culture. For example, foreign countries such as USA or Europe, as their living places was so far away from the shopping arcade or shopping center, online shopping may help them to solve the problem on travelling hours. So, online shopping will be much easier accepted by them. It might convince them much. However, in some small countries such as Hong Kong, online shopping might not be easier accept by the customers as their shopping culture is virtual shopping, they want to see the product quality, do some comparison, and even price bargaining, whilst on line shopping cannot provide these kind of services.
Moreover, education level might be another issue for social factor. For some countries which they've got high education level, they should know more on computer or internet. They can easily reach this kind of shopping method. Such as USA, almost all of the families got computer and internet services at home, even though a kids know how to use the internet, so they can reach it easily. However, in the country which education level is low, they didn't have a computer and can't reach the internet so easily. So, when MNC wants to enter into a new country, they should also think about on the social factors.
Online shopping depends much on technology; we can say if technology is not yet developed, online shopping cannot be developed also. First criteria of online shopping were computer and the internet. In the past, while computer and the internet were not common, it was absolutely impossible to try to carry out online shopping. But nowadays, computer and the internet become more familiar, and also the internet service provider becomes more and more, so potential customers may reach much more easily. Also, computer's configure is also a concern to online shopping. If the hardware is not compatible with the computer configure, customer may not reach online shopping again. So, before designing the online shopping platform, please evaluate how much potential customer can reach at the time as hardware and software improve and changes very quickly.
Moreover, online shopping concerns much on security, if security didn't done well, customer may not confidence to shop online as they may worry about on the personal information such as credit card details and address etc. being stolen by hacker. If hackers got the details, they may suffer a great loss. In the most serious cases, hackers may even steal customers' information in the computer though the internet. So, security is really a big issue for technological factor.
Last but not the least factor, ecological factor, most scientist or ecologist may concern on that would there be a lot of pollution or waste of resources. Why problem comes would be because of the convenience of online shopping. People may buy by the impulse buying, without considering whether it fits themselves (for clothes), whether they likes to eat (for food), whether they want to play (for toys), etc. Also, while they click on the buy button, they even won't consider about the quality of the product. After the purchasing process, the product deliver to them, they discover that the product was not the thing they actually like, then, throw away. Hence, tones of rubbish come out. This was really a big issue to the ecology.
But online shopping does help the ecology also, because this is a computerize activities, no air pollution or water pollution comes out. It can also save the electricity or even water us the scale of office can be smaller, so it can save the ecology a bit on the other hand.
Soft System Methodology (SSM)
SSM is the system which is design for the mess problems which is un-structured. It can be used the situation that included amount of interaction of human, social and political. The advantage of the SSM is it can handle the hard problems more systematic manner.
As SSM is the system that design for real world and mess problem. As a result, it will be well fit to use this approach to solve our problem.
As show from the rich pictures, we showed that there are different parties; there are branch staffs, Managements, IT department, Customer services, and End users. And everyone is having their own concern. We will discuss it at below.
Management concern that the system reliability and stability for the system especially for MNC. Even they setup server in different country to serve the local users due to different culture. For those developed country. It may have thousand of orders placed on online shopping within few hours. In case the system goes failure, Company may lose thousand of Million. And also customer will lose confidence of the company and seriously affect their reputation of their local brand.
Second, Management does concern the budget of the system development. Because online shop it still new format of the business. In the beginning stage, they won't put much resource for development. It may appear conflict with I.T. Department as sometime.
I.T. Department is one of the key of the online shopping system. They have to support not just local office but also worldwide. Due to MNC natural, they do concern of the system and network security. As the entire sale orders from worldwide are being processed by Headquarter for billing purpose. And the customer package order will send to individual warehouse or local store to process. During the data transfer, security is the one main big concern. System security is another concern of I.T. department because in case the online shopping system having a bug. It may leak security problem. As a result, I.T. department have to continue improve the infrastructure of online shopping also online shopping system itself. However it may appear conflict with Management due to limited of budget concerns of management.
As the online shopping system do not have sales to serve the customer. Therefore, customers have to call in Customer services in case of enquiry. Sometime, online shopping system may suffer failure or in poor performance and un-stable. It may lead many enquiries from customer. It also added extra work load of Customer services department. Also in MNC environment, customer may speak different languages. Company may need to provide the training for the customer services colleagues to improve their communication skill.
Customer doe concern the payment security. As the payment make online. The payment information is sensitive, in case it leaked out somehow. Customer will lose confidence of online shopping system. And they won't use it again. Another concern is the delivery on time. Because customer idea is saving time to enjoy their life. However if delivery not on time. They have to stay at home to wait for delivery. It will make the customer angry and affect the company reputation. Sometime, in developing countries, online shop may not offer full set of product. As it may limited by the local government import policy especially in MNC environment.
The traditional shop may offer cheapest price of the goods. It may conflict with online shop. However traditional shops have presence it only can sales a certain area. However the online shop doesn't have any presence. Online shop is able delivery directly to the customer site. Thus, there is no limitation of location.
The branch shop staff will concern for the workload because sales order will be delivery directly from the Headquarter. And their job responsibility is not limited pack up the branch shop stock. They also needed to pack up the goods based on online sales order. It added extra workload. However management may not add extra men-power to cater additional workload. Thus, this is one of the conflicts of the management.
CATWOE are developed by Peter Checkland to cater the root definition and it has six elements. The CATWOE is used below for online shopping in MNC of food retail sector.
Customer means who a benefit by the online shopping system. In online shopping system, customers can order any goods they like via online.
Actor means that who is the responsible for online shopping system. The online shopping system is running by MNC itself. The MNC will handle the online shop order for the customers.
Transformation is used to transform the process. It defined at online shopping system like procedure. It like when the customers buy it online. The online shopping system will start to go through the steps and finally after payment successful. Delivery will become the output of this transformation.
Weltanschauung means the world views which bring the impact to the society. The online shopping system can improve the customer life style. And provide an alternative way of shopping. In this century, Internet is widely used for communication. As it does not have limitation of the location. Customer can shop anywhere any time.
Owners mean who is owned the system. In this case, MNC is owned the system. If the online shopping system is suffer any problem. The owners have to take responsible for it.
Environment is considered in this situation. As MNC is having the online shopping system all over the world. Some of the developing counties internet facility may not enough. And some of the elder customer may don't know how to use internet. Thus, both of them are the constraints of online shopping system.
Conceptual Model shows the related action of the online shopping system in MNC.
After created the conceptual model, we have to compare the model with real world by tracking on the performance and also market response. Perform discussion and looking for change action. Conceptual model of the online shopping system shows the workflow. Customer access from internet to our internet server and apply for an online account. Afterward, they will start shopping and select a range of the goods. In MNC environment, different counties are having different culture and behaviors. Based on observation, Market response and customer feedback that we can perform analysis of the marketing in different countries. The Management of the MNC can base on those figures for the discussion and find out the change in order to enhance the online shopping services.
Consequences Analysis for Online Shopping in MNC
Impact on IS Strategic Planning for MNC
Today, Many industry are using IS to enhance their services. It is not limited to MNC. Threat of the system will result great impact of the operation. Therefore, MNC have to perform some safe guard in order to minimize the risk. There are three possible actions. Preventive action cost is lowest compare with other. As the threats already predict and prevention action already placed. Thus, the impact can be minimizing. Detective action is another action which the cost will be higher than prevention. As the threats cannot be predict but it can be found during the monitoring. Corrective action will be even higher than other. As the threats already occur and being affects the operation and business. Thus, it takes more time and cost in order to resolve the problem.
Effect / Probability / Action Grid
The grid shows the possibilities threats that will occur on the online shopping system in MNC and will suggest the approximate action in order to reduce the risk.
Threat 1: Fatal and Possible
As the online shopping system contain number of elements. It included servers, system software, and network equipments across the country and state to support MNC environments and maintain the daily operation. Any elements break down it may lead the system failure or security issues. Thus, there will be big concern of system stability and reliability. Also network attack from internet world, fire and earthquake were unpredictable. Those threats are seriously affect the system operation.
As those threats are fatal and possible to be occur. The main goal is how to prevent the services down time to increase the system stability and reliability. To prevent it occur. All elements have to perform drill test regularly, the system and network design cannot be single point of failure. It should provide auto failover or redundancy of the main components. The internet services provider and the hardware vendor have to provide the service level and fastest response time during the outage events. Monitoring system performance and network performance are needed to benchmark the system likely to be outage.
The collected data can be used for analysis if the system being goes wrong. Routine data backup must perform daily according to the handbook and procedures. Finally, the system location cannot only one but many. It can reduce the risk of the natural disaster.
Threat 2: Slightly Negative and Unlikely
Non-user friendly interface for online shopping system will seriously turn down the customer's shopping interest. Even the interface can able to fit the existing situation. However, customers may feel difficult to use as there are many non-necessary steps and non user-friendly design. Also, in MNC environments, interface is used in different country and different people. And those people are having different culture. It is a big challenge of MNC.
The interface development must base on customer feedback in order to design user-friendly interface. Localization is also needed for MNC environment. Ease of use web interface is the main factor of online shopping system. Accessibility features such as "click and speak" have to consider during the interface design. It is useful if the customer is elder or those customers unable to read it.
Threat 3: Unlikely and Fatal
Online shopping system is a complex system and developed by no. of programming codes. Since modern application is using modules approach to develop. And every module is developed by no of programmers. Application bug may appear during the compile of the system by modules.
Application bugs are likely to damage the online shopping system. Online shopping system has to process thousand of traction per hours. It will also affect the backend server such as billing servers. In this case, the system project teams have to ensure every parts of system is running property. Extensive drill test, stress test, load test, assurance test have to perform before launch for production in order to reduce the risk. Operation team has to monitoring closely for any events from system.
Threat 4: Negligible and Slightly Negative
Even online shopping system operation is relying on computer. However, it still need human to perform the backend task such as billing, update the online category etc. In MNC environment, it required more human for those routine tasks as every different country having own team to handle the operation. Thus, it will have a chance for human mistakes.
To prevent human error, the operation team members have to perform the training for the online shopping system workflow.
Standardize the training location to ensure team members from other country having a same knowledge. Operational manual have to provide to team members for their guideline. To enforce the team members perform change requests for every task and approve by single location (Headquarter).
Ethical Issues for online shopping in MNC
The online shopping system is used to design for the customer able to shop via internet. The failure of the server application, network hardware will result un-expected service downtime. It also leak data leaking as well. The leaked data may contain serious information such as Credit card no, home address. Privacy information leaked out will be one of the major failures consequences of the online shopping system.
Even the system is prefect and no failure of the application. There is another way for privacy information leakage. Human mistakes will be one of the concerns. Nodaway, In MNC, email is one of the common methods to communicate with other colleagues around the world. Some of the email may contain the customer privacy information. Although paperless in MNC is very common. However MNC still have to find a way to protect data to prevent it leaked out to public.
Professional Codes of Conduct
The online shopping system will store some privacy information for customer such as credit card no, name, home address, shopping records and password. And that information is used for billing purpose. MNC has to protect those data in safe place. In the MNC environment, those data may transfer from shopping system to backend system across the country or state. And those data must crypt during the data transfer. However, illegal access of the information may found in either way.
Data Accessibility in the MNC environment for online shopping system must follow in straightway. It has to provide different of access level on the data according to the country or state. Apart from this, sensitive data are only can be access by authorize staffs to reduce the risk of illegal activities. Since Online shopping will perform payment via internet. It is a hard way to identify the customer. In this case, suggest sending an email or short messages to perform two-way handshake with the customer in order to protect their data.
Online shopping will become one of the famous ways for retail since it is regardless of the physical location. People can save the time and shopping anywhere, anytime. In term of MNC, MNC can establish online shopping system in every state of the country to fit the different kind of the customers. It can expand their coverage by using information technology. However, in the developing counties it still a long way to go as technology is not mature enough for those areas.
- Bob William., 2005, Soft Systems - The Kellogg Foundation
- 'eCommerce Journal,2008, China set about levying taxes upon online merchants, viewed 12 December, 2009, http://www.ecommerce-journal.com/news/china_set_about_levying_taxes_upon_online_merchants?drgn=1
- Peter Checkland, 1981, System Thinking - System PracticeMitroff and LinStone,1993, The Unbound Mind: Breaking the Chains of Traditional Business Thinking, Oxford University Press, New York