E-business Effect on Value and Profitability in Mining & Capital

This literature review critically examines the impact of e-business on value and profitability, specifically within the capital goods and mining industries. It begins by defining e-business and its role in modern organizations, emphasizing its influence on communication, customer relations, and supply chain management. The review synthesizes various authors' perspectives on e-business, highlighting its connection to organizational value enhancement and profitability. It covers factors motivating digital transformation, the integration of information systems, and the importance of aligning e-business strategies with overall business goals. The review also addresses the role of innovation and technology in driving competitive advantage and discusses the financial metrics used to evaluate e-business performance. The analysis includes the effect of cloud computing, capital productivity, and the socio-economic impacts of e-business, providing a broad overview of the subject. Desklib offers this and many other assignments for students.

Chapter – 2
Critical examination of the effect of e-
business on value and profitability in
capital goods and mining industry

Table of Contents
INTRODUCTION.....................................................................................................................................2
REVIEW OF LITERATURE........................................................................................................................3
CONCEPTUAL FRAMEWORK................................................................................................................20
BIBLIOGRAPHY.....................................................................................................................................21

INTRODUCTION
In the era of the digitalized world, every organization is using the internet services in
direct or indirect manner. E-business can be defined as the procedure of linking the
business process with the internet. This change in business process changes the way of
communicating with customers, dealers and other stakeholders. Internet enhances the
quality of commercial processes of an organization. E-business is often used with
e-commerce, however, these two terms are different and the former term is a subset of
e-commerce. E-commerce has helped an organization to control the management even by
staying away from the original destination of the organization. It helped in minimizing
the limitations of boundaries between countries as well. Various organizations have
shifted from physical movements to electronic supply chain to enhance their profitability.
Thus it can be said that e-business is a revolution in the business market which can help
in reducing the limitation of distance barriers.
REVIEW OF LITERATURE
Various authors have provided their point of view regarding the research done on e-
business. According to Matlay, Westhead, & Wright (2011) E-business is not only related
to the implementation of the internet in the business but it is also related to the process
where the value of the organization is enhanced after using the internet. Chen &
Holsapple, (2013) said that e-business is the application of internet in various functions of
the organization such as customer dealing, purchasing, marketing, and distribution.
According to Balaraman & Kosalram, K. (2012) e-business is nothing but moving of
information, money, and goods in a digitalized form. Some authors have also linked e-
business with the profitability of the company. According to them, e-business helps in
improving the profitability of the organization. Luqman & Abdullah (2011) provided
various factors which motivate the business to be digital. Barn and Hilton highlighted the
flaws in previous literature regarding the measurement of profitability in e-business.
According to them the existing kinds of literature focus only on the financial performance
which undermines the quality of work.
According to Fei and Chung (2015), the use of internet and web-based technology has
boomed the integration of information system across e-businesses. In the past, the
measurement of e-business value has been traditionally considered as a single construct.
However, today the desire to develop a comprehensive understanding of the impact of e-

business software from a theoretical perspective has resulted in the modeling of multiple
e-business constructs. The impact of e-business has enabled collaboration on the
operational and financial performance. The key of this research paper is to identify the
enabling role of multiple dimensions of e-business and how it impacts the financial
performance of the company.
Nerguizian, Mhiri, and Saad (2011) defined "E-business as any process that a business
organization conducts over a computer-mediated network. It includes buying and selling,
as well as wide range of customer, production, and management focused process carried
out by for-profit, government, and non-profit entities". Thus, we see that e-business is
based upon the processing and transmission of digitized information which includes text
and visual images from one device to another. Hence, we can understand that e-
commerce is a part of e-business which involves buying and selling goods and services.
According to Matlay, Westhead, and Wright (2011), e-business is regarded as a net-
enabled business activity that transforms internal and external relationships to create
value and exploit market opportunities driven by new rules of connected economy.
Additionally, e-business involves in the continuous optimization of an organization's
value proposition, financial performance, and value -chain position through the adoption
of digital technology.
Balarama and Kosalram (2012), Identifies that e-business influences influence on an
organization can impact the business efficiency and financial performance and this can be
seen throughout the organization from the point of sales to the manufacturing of the
products. This effect has a huge impact on the company's financial performance. Thus, we
can see that e-business is not just about buying products over the internet, it is about
increasing the value of the organization by improving the way the business operates.
According to Luqman and Abdullah (2011), the adoption of e-business has a significant
impact on a company's current strategy as well as strategy formulation. The key to
effective e-business strategy understands the business goals and not the e-business goals.
E-business only helps to facilitate improvements in a company’s process and to allow to
business to expand within the geographical market. Hence, the business needs to be
familiar with the infrastructure and integration process. If a company implements e-
business without understanding the company’s business goals or process, there is likely to

be an e-business failure. Like all traditional businesses, e-business needs to be evaluated
regularly as the business strategy is not a onetime event.
The purpose of this research paper is to critically examine the role of e-business
innovation on a firm's performance. It follows the footstep of past researchers who
described organizational innovation as a more important to understand how innovation
theory can explain one particular innovation instead of searching a single unifying theory
that explains all innovations in general Caldwell, Harland, Powell, and Zeng (2013).
However, the current research applies to organizational innovation theory in relation to e-
business. This research will discuss e-business innovation and how this affects the
business success by combining early adoption and innovative use of e-business to an
entities performance.
The well-recognized work of Fei and Cheng (2015), highlights the significance of
innovation as the source of value creation. He also suggests that innovation can not only
change the way businesses operate, but has even been called "creative destruction" due to
its radical nature. Matlay, Westhead, and Wright (2011) believed innovation theory
focuses on the importance of technology and identifies that innovation recognizes the use
of technology as the foundation of new products and production methods. For instance,
the implementation of new goods or a new method of production, the introduction of a
new market and, or the development of a new source of supply of raw materials or partly
manufactured goods.
According to Saleem and Dhavachelvan (2011), the high uncertainty characteristics of e-
business challenges high-level management involved in e-business. It is the innovative
use of technology that differentiates superior performance from the inferior ones. Such
innovative use often accompanies the introduction of new goods or even a new method of
production.
According to Ruoco and Durfee (2001), it is established that larger organizations find it
difficult to adapt to the traditional capital budgeting method, which commencing e-
business projects. E-business focuses on senior management to adopt a non-traditional
approach while measuring the payoff of a project. Hence, senior management tends to
discount the time value of money and calculate it with the Net Present Value (NPV) of
the project. Thus, management can decide that, if the net present value is positive then
they should fund the project since it will generate value for the company in excess of the

cost of capital which is required to find the project. On the other hand, if the net present
value is negative then the management would need to decline the project due to the fact
that it will from the company's value.
Due to high pervasiveness, e-business affects within the organization. For instance,
employees need to be retained to assume new responsibilities brought about by e-
business. Entities would need to reorganize its structure to fit the e-business concept
which emphasizes the flow of information both within their boundaries and among
partners along the supply chain such as its customers, suppliers, and stakeholders.
BordonabaJuste, Lucia Palacios and Polo Redondo (2012), emphasizes e-business has
become to change the way industries and entities operate. Its diffusion often stimulates
reconfiguration of adopter's technology strategy and structure and for early adoption tends
to provide a dominant design that gains the initial competitive advantage. For instance,
one early adoption of e-business was Dell, which was the first firm to use the internet to
sell its products directly to businesses, governments, and consumers. As a result, it was
able to gain significant advantages over its competitors.
Wiengarten, Humhreys, McKittrick, and Fynes (2013), suggests that the rapid change in
the adoption of e-business technology affects the firm's performance by redefining the
way it completes. Among the most powerful sources of creative destruction in the past
decade, it is the Internet that is used for connecting millions of computers and other
devices worldwide. To illustrate, the commercial use is combined with the graphical user
interface based World Wide Web browser, is more than the deployment of equipment and
devices as it also is a social force. It has changed the way entities do business today,
including their product offering, organizational boundaries and structures, value chain,
marketing channels and financial performance.
In this research study, the dependent variables will comprise two sets. Firstly, the profit
ratios and operating income and secondly, measuring the cost ratio of e-businesses. The
profit ratio is based on return and net income. The return on assets (ROA) is the ratio of a
firm's net income on its assets. The return on sales is the ratio of net income on sales. The
operating income relates to the assets. The operating income of sales is the ratio of
operating income on sales within the business. The operating income to the employee is
the ratio of operating income in relation to the number of employees.

Federico Etro in 2009, in his research on effect of cloud computing on job and revenue
creation analyzed the positive consequences of reduction in fixed costs. The work was
based on the European market; emphasis was given on new small and medium
enterprises which were created due fixed cost in ICT capital.
In another study, Eva Martinez-Caro in 2010, researched on the UK SMEs. The
constructive effect e-business technology on generation of capital funds and its
productivity was revealed. The capital productivity was increased due to technologies of
e-business platform, which in turn increased the effective production capabilities of
SMEs and some large scale industries.
Petras Barsauskas in 2010 found and described the enhanced business efficiency by
adoption of e-commerce in business management. Average cost of business was
observed to reduce and inventory carrying cost also reduced due to adoption of e-
business. The analysis was qualitative and quantitative in nature.
In Nigerian aspect, Adedamola, Oluseye and Yusuf in 2013 analysed the positive effect
on service sector firms. In 2008, analysis was done on 500 firms and impact due to
technological advancement in research and development was observed. Categorical
influence on service sector was matter of interest.
ICT manufacturing industry was positively impacted by e-procurement in Ireland. Paul
O. Harrigan in 2008 researched about the effects of e-procurement. Noticeable
improvement in business functionality with reduced cost was noted. The entire work
was synthesised in small scale economy. The top enterprises of ICT manufacturing units
in Ireland were taken in the sample study.
Similar observations were noticed in the platform of small and medium enterprises in
China and India. The global effect on these firms was studied by Rajesh K. Singh in
2009. Competitiveness in quality and future improvements of the firms was main
concern of the research.
Richard Boateng in 2008 discussed about the socio-economic enhancement due to effect
of e-business. The work was developed in the platform of developing economies. The
prospect of positive effect of e-commerce on socio economic development of enterprises
was studied in this work. The model was designed to help in future work on e-commerce
and its impact and contribution on economic aspect of firms.

Gheorghe H. Popescu analysed the positive effects of e-commerce on social
sustainability. The constructive force of Communication technology on competitive
business sustainability was studied in the paper. The results of this analytical study
revealed the effect of ICT capital on production related sustainability. Sustainability
presumption was the platform of the research work.
Tiago Oliveira was a scholar in University Nova de Lisboa in Portugal. He studied
and researched on the firms in European countries who adopted e-business for
enhancement of performance. The research was done on tourism and
telecommunication sectors. In 2010, he investigated the importance of e-business
implication on these two sectors. Comparative study was done for the assessment of
outcome difference for the two sectors. Statistical significance was observed in e-
commerce methodology applications. The competitive pressure was only deterrent
factor of the study.
Philipp Koellinger in 2008 nurtured the e-business effect in Europe and the relationship
of enterprise performance with technology, was discussed. Effect of online technological
instruments in company performance enhancement, and innovation in business due to
technology usage were researched.
A Spanish researcher, Frank Wiengarten, from ESADE Business School in 2013
studied the e-business effect on supply chain management partnership, in the
platform of German automotive industry. The estimation of e‐business esteem has
been customarily considered as a solitary build. Be that as it may, the longing to
build up an extensive comprehension of the effect of e‐business applications from a
hypothetical point of view has brought about the demonstrating of different e‐
business develops. The effect of e‐business empowered joint effort on operational
execution was additionally explored. The reason for this paper is to investigate the
empowering part of various measurements of e‐business researching if all e‐business
applications affect straightforwardly and emphatically on production network
coordinated effort. E‐business applications affected emphatically on inventory
network coordinated effort while some did not. The outcomes likewise demonstrated
that e‐business empowered joint effort affected straightforwardly and emphatically
on the numerous measurements of operational execution tried.

Ling Xue, Gautam Ray and Vallabh Sambamurthy invested their work in analysing the
positive aspects of innovative industry environments and effect on firm’s asset selection.
The exploration makes the universalistic presumption that both results will be recognized
by the portfolios of IT resources of the companies. Limited research was conducted on
the conditions under which the IT resource portfolios of companies should be more
domain-oriented or advance. Here, argument for the idea of the company in which a
company supports will have a great direct impact on the link between the portfolios of IT
resources of companies and the results of competition or progress. Using state-of-the-art
information covering a wide variety of industrial situations, it was observed that
reduction in the levels of dynamism, and benevolence, IT resource portfolios were linked
to higher productivity growth.
The effectiveness of e-business was again studied by Battisti, Canepa, and Stoneman
in 2009. This study was conducted on the firms of United Kingdom. Using information
from the UK's Third Community Innovation Survey, the scholars demonstrated the use
of e-commerce across and within companies in the UK. Model evaluations revealed that
the example of the use of e-commerce reflects the heterogeneity of firms in terms of size,
other imaginative actions and work restriction and exposed and outsourced
intermediaries.
Xiaoxia Duan, a scholar of RMIT University, Melbourne in 2012 produced a paper on
fundamental determinants for the reception of the electronic market in small and
medium-sized enterprises. A positive relationship was established between senior
management, external administration and the acceptance of the electronic market in
Australian SMEs. The best administration extended as the most fundamental
determinant. The apparent indirect benefit, the size and the preparation of the
association, in all cases, did not show a critical effect on the receipt of the electronic
market in Australian SMEs.
In 2011, research was done on advancement of e-commerce services in the public sector
firms, to summarize and mix the content and thoughts of proponents of the advancement
of the electronic service, find out and study alternative points of view. In addition, the
document strived to recognize the key qualities of the electronic service; and to assemble
calculated views on the nature, degree and modification of the electronic service. The
document constructed an unequivocal statement of the idea, nature, boundaries, parts and

components of the electronic service that is critical to a specific end purpose.
Understanding about the electronic service and the electronic service among people in
the general area was made clear. With a rapid development of the volume of research on
the subject of the e-service, the article reflects on different perspectives, hypotheses and
strategies in the field of online research on service in the field of people in general.
The administration of the production network (SCM) was considered as more frequent
activities in the 21st century. In the mid-1990s, agile assembly (AM) collected energy
there received the consideration of the two scientists and specialists. In the mid-1990s,
SCM began to attract intrigue. However, AM as SCM seems to contrast in philosophical
emphasis. Be that as it may, the problems of cost and reconciliation of suppliers and
customers were considered in AM. When differentiating, the cost is considered a lot in
SCM, which is centralized in the combination of suppliers and clients for the service
coordinated by the help of data advances and frameworks. Consideration of the
importance of AM and SCM for companies to improve their performance was studied by
Angappa Gunasekaran in 2008.
In recent years, Elvira Nica in her research work linked ICT innovation and economic
development in 2015. The purpose of the document was to highlight the maintenance test
in the economy. The network and global conditions, and the character of the natural
management capacity in the data period and the link between ICT and sustainable
improvement was developed in this work. Through the application of new
methodological and reasonable methodologies, this review advances to the next level of
research on the maintainability of the internet in emerging markets, the link between the
practical improvement society and the circle of innovation of data and ICT as a lever of
progress sustainable. . This review established methodological and calculated
compensations for the connection between the Internet society and the field of reasonable
improvement, the participation of ICT in the natural management capacity and the
compatibility of classic commercial examples of the modern era.
Pan and Jang of National Taiwan University of Science and Technology discussed their
research work on organizational environment framework due to implementation of
supply scheduling, in 2008. The main research was to examine the components in the
structure of the Innovation Partnership Terms that influence the choice of receiving
enterprise resource planning (ERP) in the Taiwanese trade industry, the exact tests

performed here depend on individual meetings with an example of 99 companies in the
Taiwan correspondence industry. Eight factors were tested in three general classes using
strategic relapse, and four of them, state of innovation, estimation, limits, and
improvements in creation and activities, are considered essential determinants of the
appropriation of the ERP.
The association between information and commutation technologies (ICT) with the
achievement of the rural companies was investigated by Charles Steinfield et al. in 2012.
The small and medium sized enterprises were studied for their success in business due to
impact of ICT adaptation, the case study focused mainly on 333 rural business
companies.
Dr Horst Treiblmaier and Dr Andreas Strebinger in 2008 in their research work
investigated the effect of e-commerce on brand and IT structure. Minimization of
effective transaction cost due to technologically advanced e-commerce software was
found to be the primary reason. The study was conducted in Austria, where strong
amalgamation of brand architecture and IT structure was noticed.
A review of the modes of the global promotion chain, the association with the enterprise
system of a tariff organization, the action of electronic commerce and the presentation of
the execution of the chain was done in 2008 by Hsin Hsin Chang and Chen Wang. An
underlying contextual analysis of the principalities of the environment and the level of
collaboration between the regions was performed. The main contrasts between the
auxiliary connections of the system. The level of e-commerce was categorically
identified with the level of collaboration and compliance of the chain and the execution
of the chain.
From Chinese prospective, the e-business integration with international enterprises was
studied by Dahui Li in 2010. Till then, limited research was conducted on Chinese firms.
Using the Technology-Organization-Environment system, the examination examined the
mechanical, hierarchical and ecological elements that determine the digestion of
electronic commerce in these organizations. Based on the information collected from 307
universal exchange offices in Beijing, found that natural vulnerability was negatively
related to the absorption of electronic commerce, while the internal IT capacity of a
company, its favorable position by e-commerce, its authoritarian dependence some
determinants of the osmosis of e-business.

Again, in Saudi Arabian context, customer satisfaction was conceptualized with the help
of e-business by Eid Mustafa in 2011. The supervision of customer trust, the compliance
and dedication of the moods of online business administrations are fundamental to the
Long journey of development of many organizations. Previous research has shown that
e-retailers are struggling to keep up Customer resilience regardless of the rapid
development underway in Business to Customer web-based business applications.
Several reviews have experimentally inspected a B2C web client based on web client
trust, compliance and devotional behaviors in different nations gradually, experimental
research on these major web-based business constructions in the creation of Arabic
Nations in general were limited. In this way, the fundamental purpose was to distinguish
the elements that affect degree to which Saudi buyers trust, were satisfied and are loyal
to online businesses.
Sang M. Lee in 2009 studied the performance of small enterprises and the effect of IT
knowledge with application of internet based technology in business. Small businesses
remain for the most part behind medium and large organizations in receiving and
executing computerization. The research depended on a survey of 698 small businesses.
Unique computer information and the use of electronic and technical strategies along
with internal execution of the process, the hierarchical learning of computer science and
electronic technical techniques influence the execution of the client; and monetary
execution was influenced by the client's process and execution. The results suggested
that it was fundamental for small businesses to adopt computerization to improve
business execution.
The case analysis on minerals industries of Australia was done by Sumit Lodhia in 2012.
Internet based social media structure, and its social and environmental effects on
Australian mineral or mining industry was studied. The extravagance system of the
media was used to evaluate the correspondence capacity of the web. The correspondence
of social and natural problems has been examined for a few years. Meetings were also
held with the maintenance and correspondence supervisors of these organizations. The
findings recommend that organizations still know social and natural correspondence
online. There was a fluctuating use of various web capabilities in all three organizations.
It has also been discovered that specific social contemplations could restrict the use of
the web for social and ecological correspondence.