Research Korner

Strategic Human Resource Management: FedEx Express

Introduction             Human Resource Management is considered as the philosophy, policies, procedures and practices that are connected to the administration of the employees of an organization. It is connected and related to the administration of the employees of a company. It has a great contribution in successful process of attracting, developing, motivating as well as maintaining a high-performing workforce that helps to add to the competitive advantage of the organization (Sims 2002 pp. 2 - 3).             Furthermore, HR has a great impact with the institution and the implementation of the different policies, programs and procedures that can affect the success and failure of the performance, competences as well as the loyalty of the entire workforce of the organization. Because of the policies and procedures, individuals are being attracted, retained, motivated as well as developed in order to perform the work of the organization. This is due to the fact that through these policies and procedures, the organization will seek to mold as well as shape the actions of the employees in order to operate successfully. Thus, comply with the different public policies, offer high quality of employment that will help to improve and maintain the position of the company in the market by the process of reinforced ability to compete and serve (Clardy 1996, p. 1).             Above all, the process of incorporating the top management’s goals to the HRM practices and policies will help to bring out as well as reward the different types of behavior that are important in achieving the strategy of organization. The effectiveness of the HRM practices can help to improve the competitive advantage in creating both the cist leadership and differentiation (Sims 2002, p. 5). Strategic Human Resource Management             The main goal of the strategic human resource or SHRM is the improvement of the way HR are managed in strategic manner in the organization, with the connection to the definitive goal of the improvement organizational performance, that are judged by its influence on the corporate strategy of the company, and the concern of the customers and shareholders (Brewster & Mayrhofer 2000, p.6).             HRM can help to determine the HR needs in order to support the strategic objectives as well as to ensure that all of the employees are selected, trained, evaluated as well as rewarded in ways that helps to achieve the objectives of the business. In addition, the strategic HRM is a linear, balanced process that begins with the identification of the goals that will server as guidelines in the HR practices. Above all, the integration of the HR programs with the goals of the entire organization can help to increase the value of the organization (Burke & Cooper 2004, p. 92). FedEx Express FedEx express is considered as the leading express transportation company in the world that provides fast and reliable delivery to each and every US address and to more than 220 countries and territories in the world. They are offering their service by using global air-and-ground network in order to speed delivery of the time-sensitive shipments, typically in one or two business days with the delivery time guaranteed (FedEx 2008). FedEx Express and Strategic Human Resource             One of the most important strategies of the company that made them different from their competitor is their superior customer service and effective and efficient on-time deliveries. On the other hand, since the same basic and vital technologies are also available and offered in other competitors such as UPS and DHL, the workforce of FedEx is considered as the crucial competitive advantage for the company (Ahmed & Ullah 2006).             The overall HR strategy of the company focuses on the process of building a committed, competent as well as customer-oriented workforce.             Training is considered as the most important events at FedEx, in order for the company to meet their goal of 100% customer satisfactory. It has a promotion from within policy. It undertakes as well as arranges extensive training for all of the employees as well as the managers that covers the quality management, leadership concepts as well as the philosophy of the company (Ahmed & Ullah 2006).             The retention of talents is also one of the most important strategies of the company. It has a turnover rate of 1%, having to show that they have the most effective way of keeping their employees. The main reason behind the said success is that the company is offering high career opportunities, the result of the policy that employees are being promoted from within. Because of the said policy, the company had been able to recognize the efforts of its people through awards, open communications as well as other incentives. Employee retention is directly connected with the recruitment and employee relations of the company. They influenced each other. In the case of Federal Express, it begins its retention efforts by the process of centralizing its recruitment efforts. By doing the said activity, the company had been able to maintain and retain their employees, and improves their skills, by making sure that each and every employee is receiving proper training in terms of job performance skills (Denton 1992). It helped the productivity of the company, by making sure that all of its employees are experienced and knowledgeable. People-Service-Profits             Like any other companies, Federal Express Corporation believes that people is its greatest asset. The main focus of the company is to promote a good working environment where in all of the stakeholders will feel respected, satisfied as well as appreciated. The main thinking of FedEx is that there people are the primary entity in the value chain, that is why it is important to focus on the employees first.             The People-Service-Profits policy is being implemented by asking as well as answering different basic questions, such as what are the expectations and things that must do. The company tries to spend times in order to answer the questions for their personnel by extensive orientation programs that will show and define the entire values of the company (Denton, 1992).             Above all, the company strictly implements their promotion from within and with connection to the progression policy. It also uses Information Technology or IT in order to implement an extensive job posting system that will enables the employees to be informed regarding the different opportunities. When a specific position is open and available, notices are all posted in the entire vicinity of the company in order to inform the employees (Denton, 1992) Recommendation             It had been showed that FedEx has a strong relationship with the most important entity or stakeholder, the employees or human resource. The company had been able to retain their talents that helped them to maintain productivity, thus maintain competitive advantage of FedEx. There are different aspects that must be maintain and done such as the career development. This is an ongoing, formalized effort of the organization that aims on the development and enrichment of the human resource of the company that will target both the needs of the employees as well as the entire organization (Denton 1992).             Another important thing that must be considered is the internal communications. By doing this, the company will be able to maintain their direct and sound relationship and communication with the employees that will enable them to know what are the employees’ needs and demands that will help and push motivation.           References Brewster, C, W. Mayrhofer, & M. Morley (eds.) 2000, New Challenges for European Human Resource Management, Macmillan, Basingstoke, England.   Burke, R & Cooper, C (eds.) 2004, Reinventing Human Resources Management: Challenges and New Directions, Routledge, New York.     Clardy, A 1996, Managing Human Resources: Exercises, Experiments, and Applications Workbook, Lawrence Erlbaum Associates, Mahwah, NJ.   Denton, K 1992, ‘Keeping Employees: The Federal Express Approach’, SAM Advanced Management Journal, vol. 57, no. 3, pp. 10 – 13   FedEx Express Overview 2007, FedEx, viewed 24 July, 2007, <http://www.fed ex.com/us/about/today/companies/express/index.html>.   Sims, R 2002, Organizational Success Through Effective Human Resources Management, Quorum Books, Westport, CT   Ahmed, F, M H Ullah, & M K Uddin 2006, ‘Strategic Human Resources Management: Linking HR Practices with the Business Strategy, vol. 34, no. 3, pp. 15-30.

Strategic Human Resource Management: FedEx Express

Introduction Human Resource Management is considered as the philosophy, policies, procedures and practices that are connected to the administration of the employees of an organizati…

INTERNATIONAL FINANCIAL REPORTING STANDARDS ( IFRS )

International Financial Reporting Standards     This essay takes a look on the issues raised regarding the implementation of the International Financial Reporting Standards. It discusses the benefits associated with the adoption of such standards as well as its implications on companies in different countries. Introduction   International consistency in accounting and auditing standards has become the demand of the global financial markets. With this, several countries have started adopting the International Financial Reporting Standards while others base their local standards on the IFRS. In Europe, public enterprises have already been required to prepare financial statements under the IFRS. On the other hand, reconciliation on the U.S General Accepted Accounting Principles (GAAP) is already being facilitated. The trend towards these international standards is evidently growing and is expected to result in greater comparability and disclosure of information. The transition though encompasses not just the changing of accounting procedures. Companies will have to undergo extensive change and risk management to facilitate adoption. Also there remains to be issues concerning the complexities of the IFRS requirements in terms of measurement and accounting as well as the amount of information to be disclosed. Such areas of concern are yet to be fully resolved as continuous efforts are being made to improve the conflicts and contradictions. Ultimately, the IFRS will be beneficial only after a consensus is achieved on how to apply such standards. Also, there are arguments that the IFRS is specifically suited to developed economies. As such, its implementation may be inappropriate to developing countries. Unless these critical issues are resolved, the objectives of the IFRS towards a single accounting standard may be far from reach. The transition and conversion to IFRS entails tremendous amount of changes to be undertaken. The adoption must eventually be able to bridge the gap between the IFRS and companies’ perception as to what is relevant to its circumstances. Standardizing International Financial Reporting Primarily, financial reporting is aimed at providing information to the existing and the potential partners of an enterprise as well as to the public. Well founded decisions are supported by the information resulting from the management’s stewardship. The framework of financial reporting standards mentions the concept of useful decision making. These kinds of frameworks are used in countries where there is noncodified law on financial reporting. With this, the standard setters are provided with important guidelines.  Paragraph 12 of the International Financial Reporting standards state that “The objective of a financial statement is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.”  Moreover, the Statement of Financial Accounting Concepts says that financial reporting function primarily to provide useful information to those who make economic decisions regarding business enterprise and investments to these enterprises (, 2004, ) The International Financial Reporting Standards (IFRS) refers to a set of standards in the area of accounting. This body of financial reporting standards is developed by the International Accounting Standards Board (IASB). To date, major nations are adopting these standards to a certain extent.             A trend towards the use of the International Financial Reporting Standards (IFRS) is emerging in the global financial markets.  Historically, such standards are used on voluntary basis. Today, there have been a growing number of jurisdictions requiring the use of IFRS among companies for local reporting as well as listing purposes. In Europe alone, public listed companies are required by the European Commission quartered within the European Union to prepare financial statements that are in accordance with the IFRS. Such requirement affects about 7,000 enterprises. The evolution has affected the nature and the scope of national standard-setters which include that of the U.S Financial Accounting Standards Board (FASB) (, 2005)             The primary focus of the International Accounting Standard Board is the convergence of accounting standards worldwide. In order to achieve this, the IASB will designate official liaisons to national standard-setters. As such they are responsible for close contact with their respective national standard setters. Agenda coordination and the assurance that IASB and national bodies are working for convergence are part of their responsibility. Among the countries with formal liaison are Australia (including New Zealand), Canada, France, Germany, Japan, the United Kingdom and the United States (, 2005) Impact on the U.S GAAP Implementation Significant consistency in accounting recognition and measurement and the greater disclosure of information regarding financial statements are among the benefits of the IFRS implementation. However, there is still a long way before reasonable consistency can be achieved under the IFRS. Primarily, this is caused by the fact that there remains to be no substantial body of custom and practice or an accepted way by which IFRS shall be applied. A number of years of implementation by representatives of cross section businesses in different countries and industries are needed to attain a consensus on how IFRS can be applied. Until that is achieved, divergent practices and the limited comparability remain unavoidable Undoubtedly, the current IFRS reporting platform is far from being perfect. The IASB announced that there will be no new international standards to be effective until the year 2009. Ongoing improvements are aimed at the elimination of deficiencies within the current standards and to facilitate global convergence and ultimately, to remove the onerous requirement of the reconciliation with the US GAAP. It is expected that five new or revised standards will be implemented by the year 2009(, 2006).             Continued discussions are being made in the UK with regard to the future direction of corporate reporting and as to what type of convergence with the IFRS should be made. Among the many benefits of a common financial reporting language are greater transparency, consistency and comparability with entities. The adaptation of IFRS by companies is aimed to provide a competitive advantage in terms of quality, clarity and the credibility of disclosures (, 2006).             The IFRS conversion is a huge challenge which has been dictated by the International Law in a relatively short time scale. In the UK finance community, almost all of the companies are able to achieve it on schedule indicating their expertise and professionalism. It is projected that around 100 countries will permit and require the use of IFRS by the year 2007(, 2006). In this sense, it will become the most widely used accounting standard in the world. The challenge remains on the part of the investors to engage in the debate and to influence future developments Implementing IFRS requires the companies to an extensive change as well as risk management process. The conversion process would entail time, cost, effort and expertise to be able to be able to meet deadlines. Larger listed groups found it vital to use effective and timely communication with investors and analysts. The conversion to IFRS is not just changing a set of accounting principles with another. It involves a number of different financial accounting and disclosure requirements that may result to differences in the financial report. With it, the company executives are provided with the opportunity to challenge the way the company is evaluated by investors, stakeholders and competitors. Since the IFRS will affect every decision of the company, it is necessary that the management is able to foresee changes in terms of market perception.             Primarily, there is concern about the preparedness of companies regarding the changes which IFRS will require. In February 2004, an Accountancy Age Survey revealed that only 34% of financial Directors are confident that their employees are ready for the IFRS implementation. In addition to this, a concern over the lack of attention on the implications of the IFRS to companies accounting systems is expressed by providers of software and accounting systems (‘’, 2004).             One of the key issues that need to be addressed by companies is to educate the employees who are responsible for the preparation and use of financial statements. It is only in 2004 that international standards are introduced onto the syllabi by the professional bodies. Professional training firms need to be considered by the companies to provide training. Since the use of IFRS is expected to impact the transactions processes and the way they are given value, businesses should ensure the understanding of the impacts by the analyst and investors. Lastly, an accounting system that is capable of collecting, processing and reporting the information under the IFRS format is required of for the transition (‘’, 2004) Critical Issues on IFRS Implementation Generally, the IFRS is recognized by companies to bring more economic substance. The criticisms related to its implementation are the complexity of the new standard as well as the amount of work required to correctly implement the standards. IFRS financial statements pose greater complexities as compared to those which are based on national accounting standards. Such complexities arise from the extensive measurement rules and the greater number of disclosures required in IFRS than those of the national accounting standards. The disclosure requirements of the of the IFRS approximately doubled those of the UK GAAP and the Australian GAAP and four times to that of the French GAAP. The more complex accounting standards are interpreted and applied properly by a small number of technical experts. These experts are mostly employed by accounting firms and regulators rather than those which prepares and uses such financial statements (‘’, 2007). The increasing number of complexities in terms of accounting measurements and disclosure requirements of the IFRS poses a danger to companies. This is because the preparation of the financial reports may only lead to a sheer volume of data rather than the communication of the performance and financial performance of the company. Moreover, the numbers of required disclosures are not assessed based on their significance to the company’s particular circumstances.             Clearly, the implementation of these standards will require extensive judgment as to the selection and the application of the accounting treatments. In turn, consistency and comparability is restricted. Inconsistencies and conflicts within individual standards and between different standards are likely to arise as a result of the non coherent and integrated set of principles. Areas of known difficulty are yet to be addressed and the industry related accounting guidance on the IFRS shows to be very little. The selection and application of the appropriate accounting policies remain greatly dependent on the judgment of the management. This in turn becomes a limiting factor as to the degree of comparability to be achieved. Hence, the low level of familiarity and industry practices undermine the very objective of the IFRS (‘’, 2007) The challenge of this principle based approach is the consistency in application and the transparent judgments towards the application of the standards. Participants must agree that the accounting made under the international standards conform to the spirit of the standards. Varying interpretation can cause tensions and even threaten the consistency of the application. Thus, the consistency within the conceptual parameters of the international standards must be ensured by the companies. The movement to a principle based approach entails the difficulty to accommodate greater acceptance of judgment. In order for such standards to work, rigorous interpretations and effective application must be ensured (, 2005). Since the IFRS are principle based standards, they focus on the understanding of the economics which underlie transactions or events. They can be applied to differing environments and thus require a high degree of professional judgment (, 2005) As such, interpretations of similar issues may vary from company to company and perhaps from country to country. The aim of the single accounting standard is to enable comparability. Hence, the differences in the interpretations will have to be limited. The country adopting IFRS is required to fall in line with the international interpretations of the standard. In this sense, local interpretations must be in line with the interpretations of the rest of the world. The use of non-IFRS measures in the result announcements of companies reflects the gap between the IFRS and what the company perceives as essential in communicating the information to the market. The usefulness of information is dependent on individual decision contexts. Apparently, standard-setters of financial reporting are incapable of knowing in advance which information is useful for the company. Both in the national and international levels, the data that is decided to be recorded and the way by which it will be disclosed in accounting statements are based on what the society, groups or interests of individuals consider to be significant to the needs of the users. This only suggests that the differing interest can not easily be transformed to a unified interest that will satisfy all the demands and interest of different groups. Recent arguments on the adaptation of IFRS suggest that its standards are designed specifically for developed capital markets which may not be applicable to those developing economies. There is a school of thought suggesting that the standardization of the world accounting standards is not practicable considering the different socio-political and economic environment  as the issue of standard setting is a subject of local politics(, n.d). Moreover, the standards and principles that are appropriate in the western developed countries may be inappropriate or may inflict undue hardships to those developing countries Also, the IFRS may be seen as a blocking mechanism in which the developing countries that adopt its standards may be prevented from evolving their own standards which is significant in the social, political and the economic environment. Hence, perpetual tendency is likely to be caused by the adoption to the emerging economies. The nature of the socio-economic, political and cultural environment of developing countries require their economies to apply appropriate accounting standards based on their economic problems than merely adopting the standards of advanced economies (, n.d) Conclusion   The objective of having a single accounting standard worldwide is clearly manifested by the IFRS efforts. Indeed, such standards will foster benefits to the global financial market as it introduces a new trend in the area of financial reporting. However, it is also important not to disregard the possible implications of such standardization. Companies who are converting to IFRS are faced with the challenge of changing not only their accounting procedures but the understanding of the real impact of IFRS on their accounting system. Moreover, companies are confronted with the lack of general accepted ways of applying these standards. The IFRS implementation is at its early years and only through continued implementation can a consensus be laid on how to effectively apply it. And as far as adoption is concerned, international standards must be appropriate to the economic problems of the countries worldwide to be truly beneficial. References   Books   Journal     Internet Sources

INTERNATIONAL FINANCIAL REPORTING STANDARDS ( IFRS )

International Financial Reporting Standards This essay takes a look on the issues raised regarding the implementation of the International Financial Reporting Standards. It discusses the benef…

A Case Study on the US Court System

Introduction             According to Socrates, the law is made for the purpose of uniting the people and if those laws were not followed, the purpose will remain impossible. A law is a guideline that governs the people of one country that has a limited scope but defines every subject matter. By imposing such laws, the person who were accused and said that made something that is against the provisions of the law are subject to face the consequences. Courts A court is a body, often a governmental institution, with the authority to adjudicate legal disputes and dispense civil, criminal, or administrative justice in accordance with rules of law. In common law and civil law states, courts are the central means for dispute resolution, and it is generally understood that all persons have an ability to bring their claims before a court. Similarly, those accused of a crime have the right to present their defense before a court1. Court System in United States The U.S. court system is divided into two administratively separate systems, the federal and the state, each of which is independent of the executive and legislative branches of government. Such a dual court system is a heritage of the colonial period. By the time the U.S. Constitution had first mandated (1789) the establishment of a federal judiciary, each of the original Thirteen Colonies already had its own comprehensive court system based on the English model. Thus, the two systems grew side by side and came to exercise exclusive jurisdiction in some areas and overlapping, or concurrent, jurisdiction in others2. Dual Court System As a result of this historical evolution, a dual system of state and federal courts exists today. Therefore, federal and state courts may have concurrent jurisdiction over specific crimes. The court system in the United States is based upon the principle of federalism. Jurisdiction in this context simply means the ability of the court to enforce laws and punish individuals who violate those laws3. The Federal Court System Of the two systems, the federal is by far the less complicated. According to Article III of the Constitution, "The judicial Power of the United States shall be vested in one supreme Court and in such inferior Courts as the Congress may from time to time ordain and establish." In accordance with this directive, the federal judiciary is divided into three main levels. The highest court in the federal system is the Supreme Court of the United States, the only federal court explicitly mandated by the Constitution. The high court may review decisions made by the U.S. courts of appeals, and it may also choose to hear appeals from state appellate courts if a constitutional or other federal issue is involved. The Supreme Court has original jurisdiction in a limited number of cases, including those that involve high-ranking diplomats of other nations or those between two U.S. states. In addition, the federal judiciary maintains a group of courts that handle certain limited types of disputes. Included among such special federal courts are the Court of Federal Claims, which adjudicates monetary claims against the U.S. government, and the Tax Court4. The State Court Systems The system of state courts is quite diverse; virtually no two states have identical judiciaries. In general, however, the states, like the federal government, have a hierarchically organized system of general courts along with a group of special courts. The lowest level of state courts, often known generically as the inferior courts, may include any of the following: magistrate court, municipal court, justice of the peace court, police court, traffic court, and county court. Such tribunals, often quite informal, handle only minor civil and criminal cases. More serious offenses are heard in superior court, also known as state district court, circuit court, and by a variety of other names. The superior courts, usually organized by counties, hear appeals from the inferior courts and have original jurisdiction over major civil suits and serious crimes such as grand larceny. It is here that most of the nation's jury trials occur. The highest state court, usually called the appellate court, state court of appeals, or state Supreme Court, generally hears appeals from the state superior courts and, in some instances, has original jurisdiction over particularly important cases. A number of the larger states, such as New York, also have intermediate appellate courts between the superior courts and the state's highest court. Additionally, a state may have any of a wide variety of special tribunals, usually on the inferior court level, including juvenile court, divorce court, probate court, family court, housing court, and small-claims court5. Unification of Court System and Effectiveness The unification of court system will create a great disturbance in the system of the court. Both the federal and state court directs their cases into the last resort which is the Supreme Court. In the America, the Supreme Court hears the appeals from federal and state courts. It has original jurisdiction in cases in which a state is a party, and in cases involving American ambassadors, ministers, and consuls.             By the US Supreme Court, the functions of the federal and state court are treated as one. Into the deep case, every court system is not presented as a solid material but rather, it should broke down into pieces and study each fiber. In fact, there are many jurors that mastered different cases and specifically depending on the system above them. The main purpose of separating the system is to experience their functions free. The unification of the system will only cause a sluggish process in solving many cases. The cases that the prosecutors and judges are facing are based on different levels. If there were happened the union of the court systems toward the monolithic inspiration, the effectiveness will be minimal and the worst is the value of it cannot be perceived. Sentencing Goals and Rationales There are three and sometimes overlapping areas in categorizing the goals of sentencing6. * To restore truth in the sentencing process so the public knows how much time an offender will serve in prison. * To increase the proportion of a sentence that is served in prison, generally to percent, and/or to eliminate parole release as a means of reducing crime by keeping offenders incarcerated for a longer period of time. * To control the use of prison space, often in conjunction with a guidelines system, so decision makers know in advance what the impact of sentencing will be on prison populations.             The first goal is considered as the primary goal in sentencing. It is logically placed in the first row to make it elaborate to the readers about the main concept of it. The public will be aware in the sentencing process that might help them avoid committing such criminal offense. The scope of offense will be applicable to all specially when the prisoners will only serve the correctional in the minimum offense and the death will be the worst consequence that an accused might face. In short, the penalty that a person might face is depends on how heavy the case is.             The circumstance that this kind of goal might have is very dim. It is because the greatest inhibitions of the other goals are based on the first one. As long as the main goal is alive, the other goal or its sub-goals will follow. Goals are created to be the basis in making criminal punishments, both for the good of the accused party and the one who set the suit case. Sometimes, the variations of different goals will make the sentencing process more effective. The impact of the sentencing will result to the satisfaction of the justice. Conclusion The relationship between state courts and federal courts is quite complicated. Although the United States Constitution and federal laws override state laws where there is a conflict between federal and state law, state courts are not subordinate to federal courts. Rather, they are two parallel sets of courts with different often overlapping jurisdiction7.             The court systems are already defined into different works and exhibits different role in the justice. An attempt to harmonize the two types will need a big leap for change, for there are chances that they can be together but more often, one is useful if it works alone. References: 1.      Walker, D., (1980). Oxford Companion to Law, Oxford University Press, p. 301, ISBN 019866110X. 2.      The Columbia Encyclopedia (2007). Court System in the United States. Columbia University Press, New York. 6th edition p. 12111. 3.      Historical Context: The Principle of Federalism (2008). Chapter 2 The Criminal Justice System Continuum [Online] Available at: http://www.ojp.usdoj.gov/ovc/assist/nvaa2002/chapter2_1.html [Accessed 14 Aug 2009]. 4.      Encyclopedia, Ibid., 5.      Encyclopedia, Ibid., 6.      Mauer, M., (1996). The Truth about Truth in Sentencing. Corrections Today. Vol. 58. No. 1. 7.      Consumer Crusade, Inc. v. Affordable Health Care Solutions, Inc., (2005) 121 P.3d 350.

A Case Study on the US Court System

Introduction According to Socrates, the law is made for the purpose of uniting the people and if those laws were not followed, the purpose will remain impossible. A law is a guideline…

Accounting Ethics

Accounting Ethics   Ethics in Accounting is crucial to the development of any organization. As indicated in the code of ethics and professionalism principles of accounting practitioners, they should provide information to guide operations in an internal setting and to provide sufficient information to allow outside financiers to make valid judgments about the creditworthiness of a company. Thus, many people rely on the decisions made with the accounting data. As such, the accuracy of the information is vital. If a practitioner's ethics are compromised, then the resulting information will be, as well.   In our current case, in which Craig, the financial controller, are doing some unethical spending of company’s fund. I, as a senior auditor should maintain professionalism and transparency in giving financial reports.  Thus, I will still raise the matter with my auditor partner, even though they are in very good relationship. Actually, this decision is crucial to any accounting practitioners. Decision making process is a knowledge-intensive process which can be considered as an important part of professionalism. In addition, it is considered as a central factor for giving relevant information because it provides the company the assurance that each and every operations and activities made by the organisations adheres to a common goal which is set in the decision making plans.   My decision to raise the issue with my auditor partner, Richard is one of best decision that I should do.  Actually, this decision is based on the American Accounting Association model, which is to: Ø  determine the facts- Dishonest practices of Craig i.e. spending of company funds for personal purposes. Ø  define the ethical issue – The ethical issue here reflects to dishonesty of Craig and the Integrity of accounting reports. Ø  identify the major principles, rules and values involved - One of the major principles involved in this case is Integrity. Accounting practitioners should be straight forward and honest in performing professional services. Aside from this, objectivity is also at stake. It is important for me as senior auditor to be fair and do not allow prejudice or bias, conflict of interest or influence of others to override objectivity. My professional competence and due care will be involved if I allow practices like this. As accounting practitioner, I should perform professional services with due care, competence and diligence. Recognize the continuing duty to maintain professional knowledge and skill at a level required to ensure that an employer or client receives the advantage of competent professional service based on up-to-date developments in practice, legislation and techniques. Act in a manner consistent with the good reputation of the profession and refrain from any conduct that might bring discredit to the profession. Ø  specify alternatives- The alternative in this case is not tell or ignore the dishonestly of Craig and maintain good relationship with your auditor partner.  This act is actually based on Deontology ethics in which the consequence is not considered as compared to action. Ø  compare the values and alternatives – the alternative will actually maintain good relationship with your auditor partner and even to Craig but my professional competence, integrity  and due care will be questioned. Ø  assess the consequences -  If I allow dishonestly of Craig, this will cause negative impact to the business of my long-standing client.  Aside from this, my professionalism as accounting practitioner will be at risk. Ø  make a decision- Reveal the dishonesty of Craig and give the right information in accordance to financial accounting reports. This is actually based Teleology ethics in which it considers actions or behavior according to the consequences of that behavior. In any current business organisation, progress that the company is making is recorded as basis for, among a host of other essential things, decision-making and as a benchmark for measuring the firm’s performance for the period under scrutiny.  Accounting ethics is to direct accountants to abide by a code of conduct that facilitates, if not encourages, public confidence in their job. Hence, accounting fraud (mispricing or mis-stating financial items in business balance sheets or other accounting books) is an example of what 'accounting ethics' try to avoid.

Accounting Ethics

Accounting Ethics Ethics in Accounting is crucial to the development of any organization. As indicated in the code of ethics and professionalism principles of accounting practitioners, they sho…

Crisis, Disaster and the Significance of Effective Management Paper

Crisis, Disaster and the Significance of Effective Management Introduction             Crisis and disaster are often understood as similar terminologies. Literatures have stressed that these are terns with different concepts. However, in spite of their differences, it has also been stressed that preparedness and effective management is an essential key in overcoming either disaster or crisis. From this it is emphasized that crisis and disaster do share certain similarities, particularly in managing their effects. In this paper, focus will be on the differentiation of disaster from crisis. How crisis can occur in the organizational setting will also be described. Finally, means of addressing organizational crisis will be cited in the latter part of the discussion.   Disaster and Crisis             According to ,  and  (2003), disaster and crisis are often used interchangeably. Both terms have their distinct features, but they are also similar in a way, as they lead to related events. In particular, a disaster that is caused by human error in an organization may lead to the development of an industrial crisis. There had been no official definitions for both terms; however, several organizations and authors have cited their understanding of either term. For instance, disaster has been defined as an overwhelming disruption that suddenly injures or kills a large number of people.   CRED or the Center for Research on the Epidemiology of Disasters on the other hand defined disasters as exceptional events that require external assistance. The word disaster is actually taken from combined Latin terms dis (bad) and astrum (star); this is based on the conventional belief that dreadful incidents happen when the stars are badly positioned. Disasters can also be categorized into two types: natural and man-made. Earthquake, flood, tsunami and volcanic eruption are some common examples of natural disasters whereas man-made disasters can be in the form of civil disorder, war or terrorism ( & , 2002). When a number of disasters occur and remain uncontrolled, a crisis may rise. Compared to disaster, the impact of a crisis may be greater, particularly in terms of losses. Crisis may then occur due to financial threats, physical disasters, technological failures, security leaks and other similar examples. While disaster and crisis may be related, there are also some differences. For instance, while both disaster and crisis are considered unpredictable events, crises are not unexpected events (, 1999). This suggests in general, plans to counter crisis can be done ahead of time. As several mismanaged disasters lead to the formation of a crisis, multiple factors are necessary in order to trigger a crisis from happening; thus, in terms of lifespan, crisis often affect people longer than disasters as several issues would have to be addressed to resolve it (, 2004). Within a small environment such as an organization, crisis may also occur.   Organizational Crisis             Similar to the outcome of an unmanaged crisis, true organizational crises have the ability to destroy the entire organization.  (2002) noted that organizations all over the world encounter crises of different forms. Security leaks, product tampering, workplace violence, unethical work behaviors, abduction of company executives and employee fraud are some of the common sources of organizational crisis. All these examples have the capability to bring an organization to its downfall and separate daily work decisions and challenges from the concept of organizational crisis. Although day-to-day difficulties at work at not considered as a crisis, the ability of the managers and employees to overcome this daily troubles is said to help prepare them in managing real crisis situations. Analyzing the given sources of organizational crisis, it becomes apparent that current work trends influences the type of crisis that occur in the organizational setting. Computer and technology utilization in the work sector for instance, led to the rise of several crisis related to faulty systems, innovation or programs.   Crisis Management             While business organizations go through a number of crises, there are available ways on how to address them. Similar to disasters where relevant organizations and agencies provide relief goods, medical aid or livelihood assistance to the victims, organizations also employ a strategy commonly referred to as crisis management. The goal of this approach is to develop timely and appropriate decisions in times of extraordinary situations. The combined certainty and timeliness aspects in the decisions developed during crisis management then help in achieving the approach’s ultimate objective, which is the achievement of organizational balance (, 2002).  and  (1998) noted that crisis management is a systematic or organized approach involving the entire organization and enables it to counter crisis events. Organizations employ crisis management techniques by developing formal communication systems or troubleshooting means to eradicate technological failures (, 2001). Crisis management may also be applied through the development of pre-established guidelines or activities that would also allow organizations to respond effectively and safely to crisis events. These activities may involve disaster recovery procedures, emergency response, communication and business continuity or risk management.             Aside from allowing the development of useful decisions to address organizational crisis, crisis management is also beneficial as it prepares the organization in advance before the problematic incident actually happens. Preparing ahead of time before crisis strikes help in maintaining calmness as well as clear mindedness among the managers and employees. In turn, the organization is able to solve the incident effectively as well as learn from it (, 2002). Crisis management does not only help organizations become better decision-makers during a crisis; this also increases the flexibility of the organizational members ( & , 2004). This is an important development as it makes the managers and employees more dependable despite changing work environments.             The usefulness of employing crisis management has been stressed over the years. This is perhaps attributable to the fact that organizations nowadays encounter more crises that before. Various authors have related this turnout to the rise of more sophisticated organizational products and services as well as increased dependence on technology ( & , 1999; ., 1998). Comparing it during its introduction in the latter part of 1970s, crisis management has indeed evolved and increased in popularity due to these organizational developments (, 1995). Along with its development and increasing popularity, various means on how crisis management can be applied in the organization have also been introduced.   Means of Crisis Management             It has been said that in times of disaster, chances of survival increases when more and more people help each other. In particular, disaster management is carried out effectively as emergency agencies, business sectors, local and national governments work together. Survival plans are developed ahead in order to address disastrous events. Through this, more lives can be saved and restoration would be immediate. In the same way, crisis management involves advance planning as well as the participation of the organizational members. Moreover, planning ahead so as to overcome incoming crises can also result to a number of advantages for the organizations. Specifically, advance plans for organizational crisis help in saving the company’s image as well as its valuable resources (e.g. employees, money). Readying means to counter organizational crisis also helps organizations in establishing rehearsed actions, which contributes to damage control. Enforcing strategies that would address crises within the company is also useful in protecting the future of the organization. Failing to apply these means of crisis management on the other hand, can lead to loss of both financial and public confidence. In worst cases, this can even lead to irreversible damages.   Establish a crisis management team             When crisis strikes, it is human nature that managers and employees alike to be in a state of disarray or shock; with the presence of such strong and unpleasant emotions, acting to counter the impact of the crisis become even more difficult, if not impossible. This then stresses the importance of having a crisis management team, which would basically be comprised of people capable of giving out appropriate directions and counseling should a crisis occurs. Appointing the leader who would manage the said team is also essential. While the selected leader may not have enough skills to handle the crisis itself, it is essential that a crisis management team leader is capable of commanding and galvanizing people to move or act despite stressful situations.               The leader and the members of the crisis management team will also be the one in charge of identifying the likely sources of organizational crises and developing appropriate procedures should they occur. Aside from increasing organizational preparedness, this particular means of crisis management also aims to identify the similarities of the identified origins or organizational crises. Through this, the team could assign the same crisis management measures to crisis situation that share some form of similarities or connection. This then increases the number of crises covered by the team as well as helps in saving valuable time in planning. One good example that explains this procedure better is the 9/11 crisis. At that time, affected organizations were not prepared for attacks of terrorism; however, they are aware on how people within a building on fire can be evacuated safely. During the rise of Y2K threats, organizations were actively developing and implementing technological strategies to protect their databases and systems. While this crisis never occurred, organizations found their supposedly Y2K-protection strategies effective on data recovery, hot sites activation and other important activities. With these, organizations did not only save their valuable resource but also reduce the tension among their workforce. In general, team members and leaders are assigned in managing crisis management efforts in order to enable the organization to return to productivity. It is also the objective of the team to protect and maintain the reputation, value and brand of the organization despite the crisis (, 2005).   Developing a Crisis Management Plan (CMP)             One of the essential procedures in applying crisis management is the development of a crisis management plan (CMP).  and  (1993) stated that a CMP is comprised of the processes and steps suitable for addressing both real and perceived organizational crises. Similar to the concept of crisis management, the CMP is created in advance so as to achieve more efficient and speedier responses to crises.  (1999) noted that several organizations have their own CMPs and the number of users of this strategy continues to increase. The components of the plan are purely dependent on the needs and priorities of the organization; developing the CMP and its components is also based on the types of crises that are likely or frequently affects the organization. For instance, the CMP can include the steps citing what the organization would do or say to relevant parties in the wake of a crisis. This component is typically referred to as crisis-response strategies; these are actually message repertoires that aim to repair or protect the company image by means of convincing the stakeholders or influencing their perceptions. In integrating this procedure in the CMP, consistency is very crucial. In particular, crisis response must be relayed to stakeholder in a consistent manner.  (1999) stated that in order for organizations to deliver consistent replies to the stakeholders, a unified response must be developed. This was supported by  (2001) and referred to this strategy as the audience-centric approach, which basically stresses the need for organizations to relay information with similar feel and content to relevant parties, particularly in times of crisis. Applying this principle in CMP development is significant as it prevents the delivery of mixed signals or incomplete information to affected organizational members; this then can help prevent further confusion and tension within the organization. In addition, this principle clearly emphasizes that in order to effectively manage an organizational crisis, affected audiences must be given due priority.   Theoretical Relation             The systems theory is one the relevant theories that stresses the presence of organizational crises and the need to manage them. The theory states that organizations at present operate in modernized environments with high-end facilities and technologies. While these systems are useful in improving organization processes and outcomes, this also increases the likelihood of crisis from happening in the organizational setting. Although most machines and tools are already capable of fixing internal problems, no calculations or simulations can neither prevent nor predict unexpected breakdowns. A good example of this concept is the crisis in Chernobyl, where modern technology was unable to protect the plants’ employees and surrounding community as well as predict such a fatal crisis.             This theory explains that with the presence of technology, the occurrence of organizational crises becomes more likely. Moreover, the use of technology alone is not sufficient enough to protect an organization from crisis situations. This theory then stresses the necessity of being more prepared for unexpected organizational events, considering that the availability of technology increases their possibility. In addition, managing crisis should take on a holistic approach where both strategic planning and capable organizational members should be combined.   Conclusion             Disaster is defined as the disruptive event that can affect several people and require external assistance; crisis on the other hand, is the term pertaining to the outcome of multiple unmanaged disasters. In this paper, it has been made clear that while disaster and crisis are two different terms, both shares the same need for effective management. In the organizational setting, crisis or the occurrence of multiple uncontrolled disasters also does occur. Should the crisis remain uncontrolled and unresolved, irreversible damages as well as major company losses will result. Thus, it is essential that organizational members are prepared enough to overcome these untoward events. Similar to the management of a disaster, crisis management helps in saving the company from major losses. Developing a crisis management team, appointing team leaders and developing CMPs in advance are some of the means organizations can apply to prepare them against crisis incidents. In conclusion, by means of combining human capability and advance planning, risks and damages brought about by organizational crisis will be experienced within manageable levels.   References:

Crisis, Disaster and the Significance of Effective Management Paper

Crisis, Disaster and the Significance of Effective Management Introduction Crisis and disaster are often understood as similar terminologies. Literatures have stressed that these …

Research Proposal on Developing a Tourism Destination Management Plan

Developing a Tourism Destination Management Plan Introduction             The hospitality and tourism industry around the globe is continuously growing in the 21st century (Dierke, 2003). This industry encompasses hotels and other accommodations, restaurants, fast food retail, bars, and catering. It has been characterised in recent decades by the development of an increasing range of highly segmented products and services. Basically, tourism is one of the fast evolving industries that contribute to the development of the society.  But tourism is not all about the beauty of nature or a place, there is a type of tourism that also speaks in suffering and death from its history known as “Dark Tourism”.  In this research paper, evaluations and investigations will be facilitated pertaining to the tourism practices and development within Uganda, a county in East Africa.  Basically, the main focus of this study is the development and creation of Tourism Destination Management Plan for Kibwetere site in Kanungu-Uganda.  In Uganda’s history, the site of Kibwetere is a place in which the leader of a suicidal cult Joseph Kibweteere that splintered from the Roman Catholic Church in Uganda killed massive number of people (Businge, 2010). With this, it is evident that “Dark Tourism” in Uganda are recognizing the need of the tourism and demonstrating a willingness to invest in whatever it takes to make it happen. From this consideration, this research study will consider the major changes brought by dark tourism to the hospitality and tourism industry in Uganda.   Statement of the Problem             It is obvious that the government of the countries in Africa are creating ways to improve the tourism of the country whether it is a “dark” type of tourism through the utilization of different marketing strategies (World Travel and Tourism Council (WTTC) (2001). For instance, this is clearly being exemplified by Africa’s decision to move electronically into ecommerce to promote the various sites and features the country can offer.  Despite of this changes, there are countries in Africa like Uganda that continuously preserving their natural nature known as sustainable development instead of considering advanced infrastructures, systems and technology. Actually, the Uganda’s competitive strengths in accordance to their tourism assets are: abundance, diversity, reliability and visibility of wildlife; unspoiled environment and beautiful scenery; low tourist density; safe destination; beaches; authenticity and the ‘unique Uganda experience’ - real Uganda and cultural experiences (Dierke, 2003). From there, what is interesting to find out is how the government of Uganda utilizes strategies to market “dark tourism” or expose those positive traits despite of the killing and death nature of Kanungu.   Aim and Objectives             Although one of the ways this research will be run is through subjective interpretation, objectives are also needed as it will also utilize quantitative researched. For this research paper, the aim is to investigate and evaluate the changes occur in Uganda tourism industry in accordance to their management plan for Kibwetere site in Kanungu. The following objectives will be addressed in the study: Ø  The extent to which different “Dark Tourism” management plan practices affects the success or failure of Uganda tourism industry. Ø  The effects of “Dark Tourism” management plan practices have on Uganda tourism to the tourist visitors in Uganda. Ø  How Dark Tourism itself affects the success or failure of Uganda’s tourism. Ø  Findings in various literatures about the link between Dark Tourism and people’s perception to Uganda.   Importance of the Study With the establishment of the goals given, this study may also be of importance above the goals that have been set. By fulfilling the aims that were stated in the previous section, this study will be helpful for other researchers who may be focusing on the dark tourism of Uganda or of other areas especially with regards to the method of gathering the information. Such data will hopefully be helpful for researchers in establishing their own means of conducting their study. At the same time, a study’s greatest importance lies in the information that it is able to give to others, as well as the method in which these information may be used. As dark tourism in Uganda continues to flourish, attention must be given on how these programs must be improved, especially soon. The changing of times provides for changes in attitudes and interests, and thus the tourism industry must also be able to follow in order to ensure their success over the years. In providing available information concerning the changes and the characteristics of the tourist spots in Uganda, improvements by the department can be done as well as development of other tourism areas that may involve other programs. The study may significantly help with the programs themselves in identifying the changes that may be done or the needs of the tourists, as well as avoidance of possible similarities of the areas in an effort to ensure uniqueness of their services. As such, it can be clearly seen that the information that this study intends to gather aims to be of much help as it can offer to the tourism industry as well as to other researchers attempting to study their own tourist attraction spots even it is categorized as “Dark Tourism”. In a country that is embedded with the stereotypes of problems concerning government, society, and illnesses, it must be remembered that there are still several sides to a country and to the local people who will be able to give the needs of the tourists and be able to satisfy their curiosity concerning the lifestyle, as well as give them a taste of the Uganda culture.     References:   Businge G. (2010) Seven Years Since the Kanungu Massacre. Retrieved February 03, 2010 from http://www.ugpulse.com/articles/daily/People.asp?ID=586.   Dierke, PUC (2003) Tourism in Africa’s economic development: policy and implications. Management Decision, 41(3), 287-295.   World Travel and Tourism Council (2001) World Travel and Tourism Council Year 2001 Satellite Accounting Research and Summary Highlights Worldwide. Retrieved February 03, 2010 from http://www.wttc.org.

Research Proposal on Developing a Tourism Destination Management Plan

Developing a Tourism Destination Management Plan Introduction The hospitality and tourism industry around the globe is continuously growing in the 21st century (Dierke, 2003). This i…

A RESEARCH PAPER ON THE ADOPTION OF E-COMMERCE IN THE SOUTHERN REGION SHIPPING INDUSTRY IN PENINSULAR MALAYSIA

THE ADOPTION OF E-COMMERCE IN THE SOUTHERN REGION SHIPPING INDUSTRY IN PENINSULAR MALAYSIA     A project report submitted in partial fulfillment of the requirements for the award of the degree of Masters of Science in Transport Planning.       Faculty of Built Environment University Teknologi Malaysia               SUPERVISOR’S DECLARATION         We hereby declare that we have read this project report and in our opinion this project report is sufficient in terms of scope and quality for the award of the degree of Masters of Science in Transport Planning.                                                Signature                   :………………………                                    Name of Supervisor  :                                       Date                            :………………………                                          Signature                   :…………………………                                    Name of Examiner    :                                     Date                            :…………………………           STUDENT’S DECLARATION             I declare that this project report entitled “THE INFLUENCES OF E-COMMERCE IN THE SOUTHERN REGION SHIPPING INDUSTRY IN PENINSULAR MALAYSIA” is the result of my own research except as cited in the references. The project report has not been accepted for any degree and is not concurrently submitted in candidature of any other degree.                                              Signature     :………………………………………                                    Name            :                                     Date              :             DEDICATION        ACKNOWLEDGEMENT     First of all, I would like to thank my God for granting me the privilege to take up this course and with good health, perseverance and patient to complete this study despite encountering many obstacles along the path to success.                  In preparing this thesis, I was in contact with many people, shipping trade personnel, researchers, academicians and practitioners. They have contributed towards my understanding and thoughts. In particular, I wish to express my sincere appreciation to my main thesis supervisor, Professor for encouragement, guidance, critics and friendship. I am also very thankful to my co-supervisors Dr and Professor for their guidance, advices and motivation. Without their continued support and interest, this thesis would not have been the same as presented here.                  I am also indebted to University Teknologi Malaysia (UTM) for providing the courses and their assistance in supplying the relevant literatures for the past 2 years.                                      My fellow postgraduate students should also be recognized for their support. My sincere appreciation also extends to all my colleagues and others who have provided assistance at various occasions. Their views and tips are useful indeed. Unfortunately, it is no possible to list all of them in this limited space. Finally, I am grateful to all my family members. I love you all.                          Abstract     E-commerce has revolutionized the business environment by developing the digital economy that enhances value to consumers and improves the efficiency of business operations. However, optimizing the influence of e-commerce depends on the environmental context of industries and individual firms. The ports in the southern peninsular Malaysia are a bastion of growth because of the strategic position and technological improvements as incentives to shipping companies. Understanding the influences of e-commerce on the shipping industry in southern peninsular Malaysia requires the consideration of the Malaysian context and specific industry context. Knowing this would provide insight into the extent of influence of e-commerce and the gap between the ICT competencies with Singapore as the benchmark country to support policy changes and greater e-commerce adoption by business firms. The study considered e-readiness to measure the environmental context in Malaysia relative to Singapore. The investigation also considered the perspectives of business firms by interviewing the managers of six shipping companies. Results showed that the influences of e-commerce on the shipping industry are limited because of factors such as cost, insufficient understanding of e-commerce, and different strategic priorities. Policy changes are necessary in enhancing the influence or role of e-commerce on the shipping industry to heighten preparedness in the digital economy.   Keywords – E-commerce, shipping, logistics     TABLE OF CONTENTS   CHAPTER                               TITLE                                                    PAGE                                     TITLE                                                                                     i                            SUPERVISOR’S DECLARATION                                     ii STUDENT’S DECLARATION                                            iii         DEDICATION                                                              iv         ACKNOWLEDGEMENT                                            v                            ABSTRACT IN ENGLISH                                                   vi                            ABSTRACT IN BAHASA                                                   vii                            TABLE OF CONTENTS                                                    viii                            LIST OF APPENDICES                                                       ix                                 LIST OF TABLES                                                                       ix                            LIST OF FIGURES                                                               ix   1                         INTRODUCTION                                        1.1 Background of the Study                                                             1                                                 1.1.1 E-Commerce in Malaysia                                   1                                        1.1.2 Southern Region Shipping Industry in                                                  Peninsular Malaysia                                                                      2                                     1.2 Problem Statement                                                            4                                     1.3. Research Goal and Objectives                                         4                                     1.4 Scope and Limitations of the Study                                 5 2                         LITERATURE REVIEW                                                   6                                  2.1 Introduction                                                                   6                                     2.2 Concept of E-Commerce                                                  6                                     2.3 Influences of E-Commerce on Business Firms                 8                                                 2.3.1 E-Commerce Influence on the                                                 Value Chain                                                                9                                                 2.3.2 Influence of E-Commerce on the                                                 Supply Chain and Logistics                                      10                                                 2.3.3 Influence of E-Commerce on                                                 Competitiveness                                                         11                                     2.4. Challenges to E-Commerce                                             12                                     2.5 Success Factors of E-Commerce                                      13                                     2.6 Determinants of E-Commerce Adoption                          14                                     2.7 Comparison of E-Commerce in                                     Shipping Industries                                                                 15                                     2.8 Benchmarking of E-Commerce in Singapore and Malaysia                                                                                  16 3                                                  RESEARCH METHODOLOGY                                          20 3.1 Introduction                                                                      20  3.2 Research Design                                                               21 3.3 Data Requirement                                                             22                                      3.4 Data Collection and Analysis Methods                            22                                     3.5 Research Timetable                                                           24 4                                                  DATA ANALYSIS                                                               25                                     4.1 Introduction                                                                      25                                4.2 Ports in Southern Peninsular Malaysia                         25                                     4.3 Adoption of Shipping Companies of E-Commerce         27                                                 4.3.1 Demographic Data                                             27                                                 4.3.2 E-Commerce Capability of the Company         27                                                 4.3.3 E-Commerce Adoption of Companies              27                                                 4.3.4 Extent of E-Commerce Adoption                                                 of the Companies                                                        30                                                 4.3.5 Attitudes of Managers towards                                                 E-Commerce                                                               32                                     4.4. Policy Recommendations on E-Commerce                                     in the Shipping Industry                                                         34 5                                                  CONCLUSION AND RECOMMENDATION                35 5.1       Introduction                                                                35   5.2       Conclusion                                                                  35 5.3       Recommendations                                                      39                               REFERENCES AND BIBLIOGRAPHY                          40                      APPENDICES                                                                      43                                                LIST OF APPENDICES                                     Title                                                                                   Page             Appendix A: Survey Questionnaire                                                                43             Appendix B: Geographical Distribution or Spread of Malaysian Ports         45             Appendix C: Facilities at Port Tanjung Pelepas (PTP)                                   46             Appendix D: Facilities at Johor Port                                                              47     LIST OF TABLES                                     Title                                                                                  Page Table 2.1 Critical Success Factors in Adopting E-Commerce                       9 Table 2.2: Measures of the Areas of E-Readiness                                        17             Table 2.1: Classifications of E-Readiness                                                     17             Table 2.4: Comparative E-Readiness of ASEAN Countries                         18             Table 4.1: Technology Capabilities of Ports in Southern Peninsular Malaysia                                                                                                         26             Table 4.2: Shipping Companies Participating in the Study                           28             Table 4.3: Adoption of E-Commerce by the Companies                               29   LIST OF FIGURES                                     Title                                                                                   Page             Figure 2.1: Business and E-Commerce Goal Alignment                                9             Figure 2.2: Linking Physical, Financial & Information Systems in E-           Commerce                                                                                                     11             Figure 4.1: Use of E-Commerce Tools of the Companies                            31             Figure 4.2: Extent of Linkage or Network of the Companies                       32           CHAPTER 1     INTRODUCTION     1.1 Background of the Study    1.1.1 E-Commerce in Malaysia               Electronic commerce or e-commerce describes any type of business or commercial transaction, which involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge.               E-commerce allows users to exchange goods and services electronically with no barriers of time or distance. Electronic commerce has expanded rapidly over the past five years in Malaysia and should continue to proliferate in the business context. In the near future, there would be a blurring of boundaries between "conventional" and "electronic" commerce as more and more businesses move sections of their operations onto the Internet. With electronic commerce, everything starts out and stays digital; only different applications are needed to transfer and process the data as it winds its way through the whole process flows.               One of the business sectors in Malaysia adopting e-commerce is shipping. E-commerce offered various opportunities for market expansion and service efficiency to the shipping industry, which operates in a highly competitive environment. Although these comprise benefits common to different sectors, there is need to consider the particular influences of e-commerce on the shipping industry to provide an understanding of how e-commerce operates in the context of a given industry, including the benefits and downsides.   1.1.2 Southern Region Shipping Industry in Peninsular Malaysia               As the Malaysian national economy grew and developed over the years, the southern region’s sea freight logistics industry also grew to reflect the changes and growth in the national economy. The shipping industry would constitute one of the key drivers of economic growth besides manufacturing and agriculture in the next 10 years. The shipping industry players include shipping liners, warehouse operators, shipping and forwarding agents, haulage companies and others parties involved in shipping services. These firms are bound to play a vital role within integrated transport chain with all seaports in the southern peninsular Malaysia.               More than 90 percent of the world international trade is moved by water transport where ships are operated as liners, as tramps or sea merchants (own account industrial carriers). Some study reported that by 2010, total port capacity from all Malaysian ports is expected to have increased to about 600 million tons from 345 million tons in 2000. The throughput of containerized cargo should experience a double-digit growth. (UNCTAD, 2002) As all of us know, seaports are the point of entry and exit of goods from a place or country. It is also a point of transfer between two modes of transportation linking sea and land or an integration between container haulage and seaport. (Quintet and Vickerman, 2004) Currently two major ports residing in the southern region are the Johor Port and Port Tanjung Pelepas (PTP).             This study is trying to investigate major factors driving e-commerce adoption, and assess the organizational readiness for Malaysian shipping industry operating in the southern region in the state of Johor. This study used structured questionnaires and observation method in getting responses from IT managers, shipping & forwarding representative or decision-makers on e-commerce initiative. The transfer of goods or containers from one mode of transport to another supporting mode has been the primary function of seaport and more specifically, the port terminals. The most important or main objective of a seaport role is to have a speedy transport of cargo in or out of the port, nevertheless, the efficiency of operational productivity, data information exchange should be updated following the current electronic technology. In the current port trend with intense competition, ports not only have to compete with other ports but also with other modes of transportation. This intensified competition has force seaports around the nation to operate more efficiently. Yet, there are still problems issues raised such as equipments failures and secure real time information were not fully implemented or utilized. The failure in e-data distribution and e-information flows by not having a synchronized way to achieved better seaport’s information infrastructure. Therefore, in the southern region, the scenario is similar and requiring improvements. The need of an industry e-database is required to strengthen the southern logistics chain. For example, study discovered no specific information on numbers of sea freight logistics service providers. (South) Ineffective coordination between land and sea transport system. Study also found out there is lack of research and development especially in the domestic liners and the total market requirements.               Understanding the influence of e-commerce in these specific areas should provide insight on the use of e-tools in the shipping industry in terms of the problems that these can address and the particular benefits to shipping companies. Knowing these problems, which e-commerce can resolve together with the other benefits for shipping companies, should inform shipping companies about how they can optimize electronic technology to resolve problems and achieve benefits. An understanding of the influence of e-commerce on the shipping industry in the southern region of peninsular Malaysia could also inform policymakers about policy improvements. These should support strategic actions to ensure competitiveness in a future liberalized environment such as the use of e-knowledge and enhancements in the port priority systems, which involve mechanisms that can process the relevant documents faster, secure and coordinate the movement of goods and distributing of real time information in a secure manner.               This research paper highlights the current logistics framework with the objective of enhancing learning by gathering feedbacks from all sources in the shipping industry. The proposed transformation to e-knowledge-based economy should also certainly generate a new wave of ICT-based service activities. The rapid developments in transport, telecommunications and ICT nowadays would eventually form a significant influence on the growth of the shipping industry particularly in the southern region of Peninsular Malaysia.   1.2 Problem Statement               In today’s ‘Era of Networking Economy’, where individuals and companies worldwide are being electronically linked, business rules keep changing and companies have to respond fast to changes to survive the competition. The marketplace is changing every second at an increasing pace. The southern shipping industry needs to buck up immediately and prepare to compete in the growing world of e-commerce. It becomes important to focus on the following areas:   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 	<li class="MsoNormal" style="text-align: justify; line-height: 150%"> 	Lack in e commerce/knowledge 	in most related players in this industry;</li> 	<li class="MsoNormal" style="text-align: justify; line-height: 150%"> 	Ineffective coordination 	between land and sea transport system relative to the linkages between 	private sectors and the Government agencies;</li> 	<li class="MsoNormal" style="text-align: justify; line-height: 150%"> 	Lack in R&D, Shipping data 	and market requirements information; and</li> 	<li class="MsoNormal" style="text-align: justify; line-height: 150%"> 	The need to form an industry 	database that would eventually help to strengthen the southern logistics 	chain by knowing who are who are dealing in which sea routes and the range 	of specialized shipments or service covered. </li> </ul>   1.3. Research Goal and Objectives               The primary goal of the research is to review the current state in the sea-freight logistics industry to answer the questions where do we stand now and how ready are we to face the future globalization challenges.               The specific objectives for the investigation include: ·         Identification of the current issues or problems experienced by shipping companies in terms of the process flows and linkages ·         Determination and recommendation of the viable means of increasing ICT utilization to enhance productivity ·         Determination and recommendation of policy changes to foster the effective adoption of e-commerce tools as part of competitive strategy       1.4 Scope and Limitations of the Study               Due to time limitations and some difficulties as constraints, the scope of the research is restricted to understanding the problems in process flows experienced by the shipping industry in southern peninsular Malaysia, the methods in e-commerce that could improve process flows in the logistics system of the shipping industry and recommendation of means of addressing problems on process flows. The means of collecting data for the research investigation is secondary data on previous studies and e-commerce trends together with interviews of managers with first hand involvement in e-commerce adoption or initiative of shipping companies. There are no hypotheses for the research because the intention is to explore the process flow problems experienced by shipping companies and recommend ICT solutions based on the data gathered from the interviews. This serves the purpose of strengthening the root of the concept of e-knowledge influences and the effective means of integrating sustainable development and all related parties into it. The research would also identify possible solutions from the use of the appropriate analytical methods in the research study.               There are however several limitations to this research. First, the interview information largely depends on self-reporting by the respondents and this could lead to biases in reporting. The information given during the interview depends on the subjective perspective of the respondents, albeit based on their professional experience as managers directly participating in the involvement of shipping companies in e-commerce. Second, access to information may not be that easy since some of the shipping companies could be hesitant in providing information. The research has to depend on available data.  This also gives rise to issues in the confidentiality of information such as company assets, the volume of every individual company’s monthly or yearly performance and individual financial matters.         CHAPTER 2     LITERATURE REVIEW     2.1 Introduction               The literature review explains the concepts capturing e-commerce and the results of previous studies on the impact of e-commerce on the shipping industry. The sources considered in the review include books, past articles journals, previous thesis, seminars papers, magazines related to current shipping issues, information posted on internet and some documents from the government agencies. There are also some variety of definitions of "electronic commerce" (e-commerce) in the literature. It has been defined as a combination of technologies. For a lot of people perspective or view, electronic commerce is defined as the buying and selling of products and services over the Internet, but they forgot there are many more aspects to it. From its inception, electronic commerce has included the shipping modes transactions and how shipping integrations over computer networks. The concept of e-commerce has now grown to include the dealing and handling of new methods such as electronic information.   2.2 Concept of E-Commerce               E-commerce comprises a key technological trend in the last decade. The significance of e-commerce has also elevated to an extent that many firms are looking at the future possibilities, costs, and other business implications of e-commerce. This trend refers to the manner of doing business, encompassing buying, selling and payment transactions using the computer linked to the Internet as tools (Moran and Avergun, 1997).   The distinguishing factor of e-commerce is its difference from the traditional modes of doing business, which involves reliance on telephone and facsimile equipments or face-to-face transactions. E-commerce enables business firms to deal with partners in business, suppliers, and customers through the Internet.               The idea of e-commerce came out in the 1990s as a term describing the pervasive utilization of computers and Internet connections by business firms. As e-processes emerged, the function of the Internet evolved as a significant tool in improving the efficiency of linkages with consumers and access to the different phases of the supply. The widespread utility of the Internet as a tool in doing business has revolutionized business practices and created infrastructure support to firm operations, particularly in industries strongly involved in transactional processes such as shipping. The uses of the Internet continue to evolve so that in the succeeding years, more uses are likely to emerge for the benefit of business firms and its stakeholders. Online functions would likely add value to the products and services of business firms heavily engaged in transactional processes by enhancing business performance and competitiveness.                 However, the range of benefits offered by e-commerce to transactional businesses has also given rise to key issues, especially on privacy of users and security of information shared online. These issues emerged because of the wide accessibility, openness and interconnectivity as innate features of the Internet. (Smith et al., 1996) While the core features of e-commerce created benefits, these also led to the problem on invasion of privacy and identity theft. Via widely accessible and speedy online accessibility, exploitation of knowledge of the operation of network systems by perpetrators and limited or poor security element of online transaction processes allowed the unethical use of individual and financial data in committing cyber crimes. (Smith, 1994) The pervasiveness of the problem made internet security a separate industry but while efforts to manage securely information online emerge, so do the means of getting around these security systems. As such, efforts to develop information security systems for e-commerce should continue to emerge in the next years at a faster speed to ensure secure online transactions for the benefit of business firms and customers. The information security sector becomes a business ally of transaction-based firms engaged in e-commerce. Concerns for the shipping sector involve not only the decision to engage in e-commerce but also the selection of the particular online tool that supports both utility and security.               Rodgers, Yen and Chou (2002) provided that e-commerce establishes links among business partners, suppliers, employees and customers through three online systems, the Internet, intranet and extranet. The Internet enables product offering and service delivery together with the related transactions through online venues such as websites. Intranet systems connect employees by giving them a way of accessing and sharing information through a network system exclusive to the company. Intranet systems similarly operate as interactive, transactional and information-sharing systems but limited only to the members of he business firms. This operates based on the assumption that informed employees decide, act and perform better. Extranet systems facilitate the establishment of links and support the flow of information and exchanges between business firms engaged in collaboration or partnership. Extranets encourage business firms to invest in e-commerce to achieve a means of establishing linkages with other companies in a business-to-business relationship. These functions contribute improvements in logistics, streamlining of the operating process, and automated ordering systems in the shipping industry. By assuming these roles, e-commerce then operates as a strategy of supply-chain management. (Hall and Braithwaite, 2001)                          Best practices in e-commerce emerged from the widening experiences of firms with this mode of doing business. Most, if not all of the best practices address the key issues in adopting e-commerce. Zott, Amit and Donlevy (2000) identified two best practices for firms to create value through e-commerce. One is improving the efficiency of transactions so that the adoption of e-commerce should improve the quality of transactions by and with the firm. The other is developing stickiness to secure repeat transactions by establishing trust, rewarding loyalty, and personalizing transactions. Jeffcoate, Chappell and Feindt (2002) explained assessment and continuous improvement as other best practices in adopting e-commerce. Some criteria for assessment are shown in Table 2.1 below, which if considered by firms in adopting e-commerce and improving e-commerce components would ensure that the performance of firms would be at the level of the best performing e-commerce firms in the industry.   Table 2.1 Criteria for Assessment in E-Commerce   Source: (Jeffcoate, Chappell and Feindt, 2002)   2.3 Influences of E-Commerce on Business Firms               According to Greenstein and Feinman (2000), developments in technology and the shifts in business or industry trends could influence changes in the business environment. These environmental changes in turn influence business firms to rethink the corporate goal or mission. A change in the mission with consideration of technological developments would in turn cause changes in the technology or IT goal of the company. Exploration of available technological tools would lead to the adoption of Internet based e-commerce goal. The achievement of this goal then involves planning and actual engagement in e-commerce tools. E-commerce, as a technological development influences business firms in this manner by shifting goals and the course of action of business firms as shown in Figure 2.1 below.         Figure 2.1: Business and E-Commerce Goal Alignment                         Source: (Greenstein and Feinman, 2000)             Specifically, e-commerce influences the strategic direction of business firms in three areas, which are value chain, supply chain and logistics, and competitiveness. The influence of e-commerce in these three areas is subject to discussion in the succeeding sections.   2.3.1 E-Commerce Influence on the Value Chain               Traditionally, the value chain supports the flow of information from suppliers to the business firms and then to customers. In the case of e-commerce, suppliers, business firms, and customers exchange information at various levels in the value chain. This changes the nature of the value chain from a sequential process to a multi-level and simultaneous process with a customer orientation. Instead of the business serving an intermediary role, the empowerment of customers enables them to gain access to the information systems of suppliers such as the inventory system to make orders online or trace product or service delivery fulfillment throughout the stages of the supply chain. Through e-commerce tools such as websites and database systems, customers can access the internal information system of suppliers and business firms to take control of the fulfillment process. The empowerment of customers creates a higher value for products and services. 2.3.2 Influence of E-Commerce on the Supply Chain and Logistics               Supply chain and logistics comprise important areas influenced by e-commerce because of the alignment between e-commerce and supply chain and logistics as processes. The management of the supply chain centers on decreasing the time involved in finishing and processing goods to ensure a speedier meeting of orders. Speeding up the production process then lowers the cost involved in maintaining inventory and minimizes the inefficiencies in distribution. Logistics comprise the aggregate processes of planning, implementation, and control of the flow of raw materials in storage or inventory of goods and services from the source to the end consumption to make these processes efficient in conforming to the expectations of customers. (Langley et al., 2000) The management of information is important in developing an efficient supply chain and logistics. E-commerce tools supports the effective management of information needed to achieve an efficient supply chain and logistics.  (Loebbecke and Powel, 1998) E-commerce improves supply chain and logistics by linking physical, financial, and information systems as shown in Figure 2 below (Kalakota and Whinston, 1997).   Figure 2.2: Linking Physical, Financial & Information Systems in E-Commerce Source: (Kalakota and Whinston, 1997) E-commerce tools that support information management in supply chain and logistics include the Internet, intranet and extranet that support various linkages such as business-to-business (B2B), business-to-consumer (B2C), business-to-business-to-consumer (B2B2C), and other relationship enabled by e-commerce. E-commerce link business collaborates, customers, suppliers, top management or decision-makers, and employees. In the context of shipping, the adoption of e-commerce by shipping companies would enable customers to access updated information on freight charges, schedules, tariffs and delivery or fulfillment time requirements, and other transport cost to enable them to decide on which service to engage from which company. However, from the perspective of logistics, the greatest barrier to the adoption of e-commerce tools is the high initial investment cost. Nevertheless, with expected cost reduction and decreased cycle time, there are various ways of achieving returns on investment. One is faster business processes because information and financial flows accompany the physical goods. This means that information replaces inventory to reduce warehouse costs. Another is the creation of savings from faster business processes causing cutbacks in expenditures on distribution, inventory, and warehouse functions. Business firms do not need to build warehouses since they can utilize the warehouse facilities of suppliers and coordinate delivery through network systems of information exchange. (Kalakota and Whinston, 1997)    2.3.3 Influence of E-Commerce on Competitiveness               There is a direct relationship between the degree of engagement in e-commerce and competitiveness in terms of market share and financial performance because the greater investment in e-commerce tools also leads to greater returns for these firms. The firms that effectively engaged in e-commerce were also the firms that have achieved competitive positions. In the case of the shipping industry, many of the competitive firms are those that have adopted e-commerce initiatives to enable customers to calculate costs and time of delivery, verify or cancel shipping arrangements, track the status of packages of freight, receive electronic invoices and remittances, and access useful information from their personal computer or handheld devices. (Leinbach and Sien, 1999; Ryder, 2001)   2.4. Challenges to E-Commerce               E-commerce has benefits and downsides emerging from the complexities occurring in adopting or adjusting to this technological development. These challenges also coincide with the issues arising from the adoption of e-commerce. Nevertheless, these challenges also identify the areas requiring resolution to ensure a successful e-commerce initiative. Vizard (2000) provided that cost comprises an issue posing a strong challenge to business firms. Cost considerations could dissuade business firms from engaging in e-commerce even with expectations of great potential benefits to the business firm. Leadership plays an important role in resolving the dilemma of firms over the cost of engaging in e-commerce. The strategic decision-making over options such as e-commerce depends upon the assessment of firm executives over the cost involved in engaging in e-commerce relative to the available resources of the company and the expected returns. Moreover, leaders of transaction-based firms should recognize that despite the costs, e-commerce could be a necessary enabler for the company. When the competitors of the business firm start to engage in e-commerce, other firms have no other option but also to take the initiative. This means that for transaction-based firms, the better option is to understand and plan for e-commerce to experience the benefits as a first mover, especially in transactional industries with limited engagement in e-commerce.               Nickles (2000) identified security problems as another challenged faced by business firms in engaging in e-commerce. The extent of security depends on the extent of investment in e-commerce and the selection of the appropriate components of he e-commerce initiative. Some actions could be considered to ensure that companies address the security problem. One is being on top of the current trends in information security technology in order to access better security components for e-commerce systems. The other is optimizing existing technology to experience the greatest benefits from engaging in e-commerce.               E-commerce streamlining (Rao, 2002) or standardization (Lal, 2005) also comprises a challenge experienced by business firms. Experiencing the benefits of e-commerce depends in part on the achievement of a certain level of standardization in terms of IT language and linkage necessary to support interconnectivity. Without this, e-commerce would become limited only to intranet. Companies engaging in e-commerce also need to look into the use of standard ICT tools for business, especially those created to cater to the needs of an industry. By selecting appropriate ICT tools, the firm secures connectivity with business partners, suppliers, employees, and customers.   2.5 Success Factors of E-Commerce               There are key success factors for engaging in e-commerce. These represent the requirements in successfully adopting e-commerce.               Greenstein and Feinman (2000) identified vision as one success factor for e-commerce. Integration of e-commerce into the vision of a business firm guides organization-wide action towards the achievement of e-commerce. This means that performance depends on the extent of achievement of e-commerce objectives. The vision of a business firm determines the key parties, the respective contributions of these parties, the activities and competencies needed, and the expected results. Thus, the vision of a firm comprises the underlying basis for the e-commerce initiative.                  Follit (2000) identified leadership as another success factor for e-commerce. E-commerce comprise a business innovation, there should be a champion for e-commerce in the company to influence the acceptance and cooperation to the adoption of e-commerce as a business solution. It is important for the leader to assume a strong position in directing the e-transformation of the business. The e-commerce leader should hold a strong position in controlling the e-transformation of the organization to ensure the effective adoption of e-commerce.               Corbitt (2003) identified corporate culture as another success factor in e-commerce adoption. In adopting e-commerce, change in corporate culture and the concurrent change management strategy are requirements in ensuring the alignment between the requisites of e-commerce and the norms, practices and values of the organization in using online tools to facilitate business processes. Culture change requires a shift in the view of managers and employees over e-commerce tools relative to their work and the performance of the business. Without a change in perception, e-commerce tools would not likely receive the acceptance and enthusiasm needed for the effective use of e-commerce in achieving goals.               Marzulli (2000) also identified the aggregate of strategic planning, corporate communication, and organizational flexibility as another success factors in adopting e-commerce. Planning enables businesses to identify objectives, anticipate potential problems, and develop contingency solutions. Corporate communication secures acceptance and cooperation by making sure that all managers and employees understand the importance of e-commerce to the business. Flexibility supports the capability of business firms to adjust to the changes needed in adopting e-commerce.     2.6 Determinants of E-Commerce Adoption               Lal (2004) listed factors as the determinants of a firm’s adoption of e-commerce. These determinants measure to what extent a business firm has adopted e-commerce. First is the overall attitude of managers and employees over the e-commerce initiative. Attitude finds reflection from the views, degree of acceptance, cooperativeness, and actual use of ICT tools. An overall positive attitude towards e-commerce eases the adoption process. Second is the bandwidth or rate of data transmission used since a higher bandwidth means greater efficiency of information flows. Fourth is firm size and profitability as measures of the benefits derived from e-commerce. Fifth is efficiency in transactions and relative competitiveness as other measures of success in adopting e-commerce.                  Bolongkikit et al. (2006) reported that the adoption of e-commerce in Malaysia varies depending on the size or scale of operation of business firms and the industry. The adoption of e-commerce by small firms is at its infancy when compared to the greater adoption of e-commerce tools by larger firms. This makes cost a determinant of engagement in e-commerce. In the shipping industry, larger firms engage in e-commerce tools while there is limited information on e-commerce tools for small firms relying on manual management of information. Different industries also differ in the extent of adoption of e-commerce functions. In the shipping industry, the overall engagement in e-commerce is still limited only to the large firms. Even so, the extent of use of e-commerce tools is also limited. This is yet no widespread link between e-commerce and profitability and competitiveness benefits.   2.7 Comparison of E-Commerce in Shipping Industries               Malaysia has a long way to go in the adoption of e-commerce in the shipping industry. A ranking of the overall physical infrastructure for sea transportation e-commerce of developed and developing countries showed that Malaysia ranks twenty-first. Singapore ranked first because of its development of the most advanced physical infrastructure such as port facilities and ICT capabilities in the world. (Wong, 2001) This means that Malaysia face a wide room for improvement in the integration of e-commerce into shipping services. The developments in Singapore could comprise a point of reference for improvements in Malaysia because of the geographic proximity of the countries as well as common socio-cultural ties. Wong (1996; 1998) explained that the successful adoption of e-commerce in the shipping and transportation sectors in Singapore is mostly due to the role of the government in promoting the diffusion of ICT technology to both households and business. The Singapore government commenced investments in ICT as early as the 1980 to support economic development through the establishment of its information and digital sectors. The diffusion of ICT was accompanied by the digitization of the production of ICT goods, establishment of network infrastructures, and development of the information as a separate economic sector.   2.8 Benchmarking of E-Commerce in Singapore and Malaysia               E-readiness is the measure used in comparing the e-commerce capability of Malaysia and other ASEAN countries. E-readiness refers to the extent of preparation of a country in participating in the digital economy. Preparedness then depends on the assessment of five areas. These areas are: 1) infrastructure, 2) e-society, 3) e-commerce, 4) e-government, and 5) ICT products and services trade as shown in Table 4.1 below. How well the countries perform in these areas reflects the extent of e-readiness. A higher degree of e-readiness means a more conducive environment for the proliferation of e-commerce in different industries while a lower degree of e-readiness means a poorer environment for the adoption of e-commerce by industries, particularly the transaction-based shipping industry. (Baliamoune, 2002; Kiiski and Pohjola, 2002)   Table 2.2: Measures of the Areas of E-Readiness 	 		 		 		Infrastructure 		 		 		E-Society 		 		 		E-Commerce 		 		 		E-Government 		 		 		ICT Products & 		Services Trade 	 	 		 		 		§ 		Communication infrastructure 		 		§ 		Internet access services 		 		§ 		End-user services 		 		§ 		Affordability 		 		 		§ 		Home users 		 		§ 		Business users 		 		§ 		Education 		 		§ 		Workforce 		 		§ 		Localization 		 		§ 		Public access points 		 		 		§ 		Current status 		 		§ 		Taxation 		 		§ 		Legal framework 		 		§ 		Physical distribution 		 		 		§ 		Penetration 		 		§ 		Use type 		 		§ 		Organization 		 		§ 		Promotion 		 		 		§ 		Communication sector 		 		§ 		IT sector 		 		§ 		ISP sector 		  	 Source: (Baliamoune, 2002; Kiiski and Pohjola, 2002)                The measures of the areas of e-readiness provide the means of assessing the degree of preparation of Malaysia in engaging in the digital economy compared to Singapore and other ASEAN countries.              There are four classifications of the e-readiness of countries based on the assessment of the five areas as shown in Table 4.2 below. Countries could be emerging, evolving, embedding or extending depending on the e-readiness progress of the economies. These classifications comprise the stages of preparation for the digital economy. Emerging means being at the starting point of e-readiness while extending means at the advanced stage of e-readiness.   Table 2.3: Classifications of E-Readiness   	 		 		 		Emerging 		 		 		Evolving 		 		 		Embedding 		 		 		Extending 	 	 		 		 		§ 		Basic infrastructures are in place or planned 		for placement in the short-term 		 		§ 		Existence of political commitment towards the 		country’s ICT development 		 		 		§  		Comprehensive infrastructure in place and 		subject to updates to meet the multi-dimensional needs of the country 		 		 		§ 		General acceptance by government, firms & 		households of technology 		 		§ 		Incorporation of e-commerce requirements into 		laws and regulations aligned with international standards 		 		 		§ 		World-class adoption of technological 		innovations 		 		§ 		Innovation and re-invention of 		technology-assisted means of doing things better 	  Source: (Baliamoune, 2002; Kiiski and Pohjola, 2002)   By considering the areas of readiness and the classification of e-readiness, Malaysia is at par with two ASEAN countries, Philippines and Thailand, and below the level of e-readiness of Singapore, the benchmark country as shown in Table 4.3 below. This means that the government of Malaysia already has a general acceptance of technological advancements as enabler of various processes. Building technological competence also finds reflection in laws and regulations. However, there is still need for momentum to achieve fully a level of innovativeness on the part of households, business firms, and the government that changes the way of doing things using digital or electronic tools and processes.     Table 2.4: Comparative E-Readiness of ASEAN Countries   	 		 		 		  		 		 		Infrastructure 		 		 		 		E-Society 		 		 		 		E-Commerce 		 		 		 		E-Government 		 		 		 		ICT Goods & 		Services Trade 	 	 		 		 		Extending 		 		 		Singapore 		 		 		Singapore 		 		 		Singapore 		 		 		Singapore 		 		 		Singapore 	 	 		 		 		Embedding 		 		 		Malaysia, 		Thailand, Philippines 		 		 		Malaysia, 		Thailand, Philippines 		 		 		Malaysia, 		Thailand, Philippines 		 		 		Malaysia, 		Thailand 		 		 		Malaysia, 		Thailand, Philippines 	 	 		 		 		Evolving 		 		 		Indonesia, Vietnam 		 		 		Indonesia, Vietnam 		 		 		Indonesia, Vietnam 		 		 		Philippines, Indonesia, Vietnam 		 		 		Indonesia, Vietnam 	 	 		 		 		Emerging 		 		 		Cambodia, Laos 		 		 		Cambodia, Laos 		 		 		Cambodia, Laos 		 		 		Cambodia, Laos 		 		 		Cambodia, Laos 	 Source: (Baliamoune, 2002; Kiiski and Pohjola, 2002) Relative to the shipping industry, this means that electronic tools and processes are available to shipping companies. Nevertheless, there is need to encourage the adoption of these tools and processes into business vision, culture and operations. Doing so requires greater responsiveness of infrastructures, more intense e-penetration of the different sectors of society, stronger role of e-government, better incentives for e-commerce, and development of competencies in ICT goods and services trade. These are necessary if Malaysia wants to reach the level of e-readiness of Singapore, which has advanced infrastructures, high levels of reach and use of ICT tools across the different sectors, widespread adoption of e-commerce by different industries, strong role of the e-government in developing digital competencies of the economy, and the establishment of its ICT industry to meet domestic and international demand for ICT goods and services.       CHAPTER 3     METHODOLOGY     3.1 Introduction               This chapter discusses the approach of the study and the research design encompassing the data requirements, the methods of data collection, the technique of data analysis, and the timeframe of the study.   E-commerce (electronic commerce) solutions bring the open standards and universal access of the Internet to the core business processes of buying and selling goods and services, integration and link up all related parties in one similar industry. The methodology reflects these three areas.   n  Benchmarking by comparing e-commerce adoption measures between Malaysia and Singapore to understand the status of the shipping industry in Malaysia in terms of e-commerce adoption and identify the areas for improvement. Singapore is the country employed in the comparison because of the proximity with Malaysia and the top country in terms of e-commerce adoption in the shipping industry.   n  Interviews with managers of shipping companies such as shipping managers and port managers using a survey questionnaire comprised of open-ended and closed questions to understand the perspective of shipping companies towards e-commerce.   n  Observations of the current scenario and identification of surroundings sensitive issues emerging from e-commerce in the shipping industry in southern peninsular Malaysia would support policy recommendations to improve the industry environment for e-commerce.   3.2 Research Design               Mixed method combining the qualitative and quantitative study was the research design applied in the study. Mixed method enables the achievement of both completeness and confirmation values. This design combines qualitative and quantitative data and retains the validity component of these two types of data to achieve a high validity.               Mixed methods enabled the researcher to come up with a complete and contextual understanding of the influence of e-commerce of the shipping industry of southern peninsular Malaysia, with qualitative and quantitative data contributing different views of the research topic. The underlying principle of the mixed method is the achievement of results that is unlikely achieved by using one approach to the exclusion of the other or vice versa. Data combined using the two methods supports the reliability or the replication of findings. Obtaining both qualitative and quantitative data also supports a comprehensive understanding of the research topic. Aside from supporting significant levels of validity and reliability, employing the mixed method could also lessen researcher bias in the interpretation of the results because conclusions find support from both qualitative and quantitative data.               A qualitative study operates by deriving detailed first hand descriptions of a case, phenomenon, or relationship (Rubin and Rubin, 2006). This approach meets in part the requirements of the research because it supports the drawing of comprehensive information on the non-measurable aspects of the investigation such as the opinions and accounts of managers of shipping companies over the impact of e-commerce on business.               A quantitative study employs deduction to test and draw theories. This enabled the derivation of generalizations for the shipping industry in southern peninsular Malaysia. This approach also provided measurable data on the research topic. (Blaxter, Hughes and Tight, 1998) The quantitative aspect contributes measurable data from the closed questions and comparative measures used in the study.      3.3 Data Requirement               To meet the objectives of the research of determining the influences of e-commerce in the southern region shipping industry in peninsular Malaysia, the data requirements include primary and secondary data.               Secondary data comprise of definitions, explanation of concepts, application of principles, statistics, and results of previous studies reported in different sources such as books, journals, magazines, newspapers, business reports, government reports, and online media.               Primary data comprise information derived from the respondents of the study. Primary data comes from the results of the survey of managers of firms forming part of the shipping industry. Data from the survey would provide answers to the influences of e-commerce to the southern region shipping industry in southern peninsular Malaysia.   3.4 Data Collection and Analysis Methods               Collecting secondary data is through desk or library research to scan books, journals, reports, and online sources for information significant to the study such as definitions, concepts and results of previous studies on the topic. Secondary data comprised the framework of the investigation.               Survey was the method in gathering primary data. Survey constitutes a descriptive method that operates by collecting data from a wide range of respondents. This method applies to researchers requiring an understanding of the link between variables by considering the perspective of different parties. (Saunders, Lewis and Thornhill, 2003) In the research investigation, the research variables are influences of e-commerce on the various aspects of shipping industry.                 Survey supports the collection of unbiased data to come up with generalizations. This method of data collection has advantages and concurrent disadvantages that required consideration before its application in the study. First, the survey method can establish the relationship between variables but fails to cover the direction of the relationship (Salant and Dillman, 1994). The mixed method addresses this dilemma by using closed and open-ended questions in the survey questionnaire. Second, survey method draws data from many respondents but is heavily reliant on self-reported data dependent on the subjective perspective of the respondents (Salant and Dillman, 1994) creating the risks of unreliability of data. Use of uniform measures in treating the answers addresses this potential issue. Third, the survey method enables the drawing of information from many respondents but requires a long period of data collection (Salant and Dillman, 1994). The resolution to this issue is compliance with a research timetable as shown in the last section of this chapter that provides sufficient time for the survey.               The survey method applied by using a survey questionnaire, shown in Appendix A below, directed at managers of selected firms in the shipping industry in southern peninsular Malaysia. The survey questionnaire has a section on closed questions and open-ended questions. These questions supported the collection of measurable data and accounts of managers on the influences of e-commerce on the shipping industry in southern peninsular Malaysia based on the engagement of their firms in e-commerce. The collection of both closed and open-ended questions ensures the comprehensiveness of data.               Closed questions obtain responses by selecting from a given set of options such as yes or no, agree or disagree, or by checking or ranking preferred answers (Saunders, Lewis and Thornhill, 2003). Closed questions place a range of possible answers in order to test theories. Closed questions applied in the study by determining demographic data and reflect measures of the influence of e-commerce on the shipping industry in peninsular Malaysia. Open-ended questions applied in drawing attitudes and experiences of managers of shipping companies on e-commerce. (Saunders, Lewis and Thornhill, 2003) The combination of survey questions gave respondents room to select their answers and provide explanations. This also allowed the use of qualitative data in collaborating quantitative data.               Interview and observation also constituted methods of data collection. These are qualitative methods (Creswell, 2003). Combining interview with the survey method led to an effective means of collecting data from the respondents. Observation of the situation of the shipping industry in southern peninsular Malaysia also supported the derivation of insights into the research topic.                Snowball sampling served as the means of selecting the respondents of the study. This method determines the research respondents through the network of the researcher. A sample emerges by requesting referrals from existing respondents. This sampling method relies on known contacts. (Creswell, 2003) The researcher commenced with known contacts with first hand knowledge and experience of e-commerce involvement of shipping companies and expanded outwards to the network until the respondents were able to represent different perspectives.                  After the collection of data, the collation and organization of data according to categories or themes reflecting the research objectives was one analytical method. Statistical treatment also comprised an analytical method. These methods provided results that inform about the influences of e-commerce on the shipping industry in southern peninsular Malaysia. The presentation of results was through tables, graphs and charts as applicable to support a clear and organized research report. Results of the study were the bases of the conclusion.     3.5 Research Timetable               The research will start and proceeds through the schedule below:   	 		 		First 		Month 		 		Submit 		proposed research proposal 	 	 		 		First 		Month 		 		Wait 		for comments and approval of proposed research proposal 	 	 		 		First 		and Second Month 		 		 		Develop the literature review 	 	 		 		Third 		and Fourth Month 		 		Format 		questionnaire, sample target and conduct research on  respondents 	 	 		 		Fifth 		Month 		 		 		Conduct data analysis 	 	 		 		Fifth 		Month 		 		Draft 		of dissertation 	 	 		 		Sixth 		Month 		 		Submit 		final dissertation 	           CHAPTER 4     DATA PRESENTATION AND ANALYSIS     4.1 Introduction               The chapter presents the results of the study. The chapter has three explanatory sections. One section compares the extent of influence of e-commerce on the shipping industry in Malaysia and Singapore to determine the state of e-commerce adoption in Malaysia and determine the areas requiring improvement. Another section explains various aspects of e-commerce adoption of shipping companies in southern peninsular Malaysia to understand the business perspective of shipping companies towards e-commerce. The last section discusses policy recommendations on the improvements needed to create an environment conducive to the greater adoption of e-commerce in the shipping industry in southern peninsular Malaysia.   4.2 Ports in Southern Peninsular Malaysia               Two ports are located in southern peninsular Malaysia (see Appendix B below), which are Johor Port and Port Tanjung Pelepas with similarities and differences in facilities (see Appendix C and D below). Johor Port was established in 1977 while Port Tanjung Pelepas was officially launched in 2000 to become the latest fast growing port in Malaysia. Although, established decades apart, the port authorities of the two ports have engaged in efforts to enhance technological capabilities to add value to the services offered to shipping companies.               Table 4.1 below lists down the technological capabilities of Johor Port and Port Tanjung Pelepas. Both ports utilize a vessel clearance system that operates through a paperless declaration system. Shipping companies only need to register their vessels in order to form part of the port database. After a one-time registration, shipping companies can clear their vessels for entry or exit of the port by accessing the online network system. Another common technology feature is the container management system involving an electronic planning system that maps out the berthing and cargo areas and organizes freight movement to ensure space and time efficiency. Johor Port also provides free zone information processing system and marine services systems that provides information through search or online chat with port agents over concerns or issues of shipping companies. This requires registration in the e-community webpage of Johor Port at http://jpbi.johorport.com.my/ecommunity to obtain a username and password used to access the services. PTP takes pride in its smartrail system, gate control and monitoring system, port radar system that utilize satellite technology to manage the movement of cargo and ensure security in its facilities.   Table 4.1: Technology Capabilities of Ports in Southern Peninsular Malaysia 	 		 			 			 			Johor Port 			 			 			Port Tanjung Pelepas 		 		 			 			 			Vessel Clearance System 			 			 			Vessel Clearance System 		 		 			 			 			Johor Port Container Terminal System 			 			 			Container Management System 		 		 			 			 			Free Zone Information Processing System 			 			 			Smartrail System 		 		 			 			 			Marine Services System 			 			 			Gate Control and Monitoring System 		 		 			 			 			  			 			 			Port Radar System 		 	  Source: (Johor Port Berhad, 2009; Port Tanjung Pelepas, 2009)             Overall, these ports have the infrastructure to support the provision of electronic services to shipping companies. These e-services provide incentives for shipping companies such as faster processing of clearance and other documents, efficient movement of cargo or freight from the ships to the cargo terminal or from the terminal to the ships, and better access to information. These incentives also encourage shipping companies to adopt e-commerce to experience the benefits of these e-services.               However, there remain areas for improvement in the technological capabilities of these ports. One is the interconnectivity of the network systems of the different ports to enable the tracking of movement of ships or cargo from one port to the other within the Malaysian border. Another is the integration of the satellite system in the case of Johor Port. This would improve management of traffic and security of the port. Last is the adoption of the electronic logging of freight containers and other information for easy access online again in the Johor Port.   4.3 Adoption of Shipping Companies of E-Commerce   4.3.1 Demographic Data               There are six respondents representing the six companies in the shipping industry selected to participate in the study. The selection and contacting of the companies was through the researcher’s network. However, even if the selection process is not random, the companies have different business focus and other varying characteristics to provide representation to the shipping companies operating in Johore at the southern portion of peninsular Malaysia. The respondents were all managers of operations of the companies with years of employment ranging from five to twenty years. The position and years of employment supported the in-depth knowledge of the respondents about business operations including the engagement of the company in e-commerce.   4.3.2 E-Commerce Capability of the Company               There are six companies participating in the study. Three companies operated in Johor Port and the remaining three in Port of Tanjung Pelepas as shown in Table 4.2 below.   Of the six companies, three are medium companies and three are large companies. Size could be determinant of the engagement of these companies in e-commerce. Three of the companies operated in the domestic market while the other three are multinational companies but one operates only in Asia while the two operated globally. The scope of operation could also have an impact on the extent of engagement in e-commerce with global operations demanding e-commerce capabilities to operate successfully in the global digital economy while the pressure is not that strong in domestic operations. There is a direct relationship between the size of the company and the source of capitalization since the multinational companies source their capital from inside and outside of the company, which means external investors while the medium companies relied on internal capitalization or the assets of the company. This could also explain the extent of engagement in e-commerce since access to capital is a determinant of e-commerce, as an area of high investment. The six companies had different business focus, with four of the companies involved on shipping and freight forwarding while two specialize in logistics services for the shipping industry. The focus of the business could also explain the extent of engagement in e-commerce of the companies.   Table 4.2: Shipping Companies Participating in the Study   	 		 		 		Company 		 		 		Port of Operation 		 		 		Size 		 		 		Scope 		 		 		Source of Capitalization 		 		 		Category 	 	 		 		A 		  		 		Johor 		Port 		 		Medium 		 		 		Domestic 		 		 		Internal 		 		 		Shipping & Freight Forwarding 	 	 		 		B 		 		 		Johor 		Port 		 		Medium 		 		 		Domestic 		 		 		Internal 		 		 		Freight Forwarding 	 	 		 		C 		 		 		Johor 		Port 		 		Large 		 		 		Multinational (Asia) 		 		Both 		Internal & External 		 		 		Shipping & Transport Services 	 	 		 		D 		 		 		Port 		of Tanjung Pelepas 		 		Large 		 		 		Multinational (Global) 		 		Both 		Internal & External 		 		Liner 		& Logistics 	 	 		 		E 		 		 		Port 		of Tanjung Pelepas 		 		Medium 		  		 		 		Domestic 		 		 		Internal 		 		 		Logistics 	 	 		 		F 		 		Port 		of Tanjung Pelepas 		 		Large 		 		 		Multinational (Global) 		 		Both 		Internal & External 		 		 		Shipping, Freight Forwarding, Logistics 	 Source: Questionnaire Responses   Although selected using snowball sampling, the six companies varied in characteristics to achieve a certain degree of representation for the companies forming part of the shipping industry in southern peninsular Malaysia.   4.3.3 E-Commerce Adoption of Companies               There are common and differing trends in the adoption of e-commerce of the companies as shown in Table 4.3 below. Two of the large companies have adopted e-commerce while there is uncertainty whether the third company has adopted e-commerce. This means that there are exceptions to the general assumption that large firms are likely to engage more in e-commerce when compared to small and medium firms. Although the third large company operates across Asia, its business focuses on shipping and transport services and there may not be sufficient pressure to adopt e-commerce. Concurrently, there is also an exception to the assumption that companies with a wider access to capitalization tends to engage more in e-commerce because of the financial capability to invest in online tools and processes.   Table 4.3: Adoption of E-Commerce by the Companies   	 		 		 		Company 		 		 		Adoption of E-commerce 		 		 		Company Vision 		 		 		Leadership 		 		 		Corporate Culture 		 		 		Strategic Planning & Corporate Communication 	 	 		 		A 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 	 	 		 		B 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 	 	 		 		C 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 		 		 		Uncertain 		 		Yes 	 	 		 		D 		 		Yes 		 		Yes 		 		 		Uncertain 		 		Yes 		 		Yes 	 	 		 		E 		 		Yes 		 		Yes 		 		 		Uncertain 		 		Yes 		 		Yes 	 	 		 		F 		 		Yes 		 		Yes 		 		 		Uncertain 		 		Yes 		 		Yes 	 Source: Questionnaire Responses   None of the respondents reported that their companies have not engaged in e-commerce but some were uncertain whether the companies did engage in e-commerce. The uncertain answers pertained to the companies operating in the Johor Port while the affirmative answers related to companies operating at PTP. This could mean that the existing technological infrastructures in the two ports have varying incentive impacts on the shipping companies to adopt e-commerce. The technological infrastructure at PTP is advanced than at Johor Port primarily because of the broader application of the network system and the use of the satellite system. Moreover, two of the companies operating at PTP focused on logistics services, which provide a greater incentive for engagement in e-commerce because of the reliance of logistics on network connections to facilitate product, financial and information flows.               Nevertheless, an area for improvement in the adoption of e-commerce even for the companies who have adopted e-commerce is the role of leadership. All the participants were uncertain on whether top executives of the company advocated or spearheaded e-commerce. Although the decision to engage in e-commerce emanated from the decision of the top executives, company leaders may not have been active in influencing the acceptance of e-commerce by the entire organization. Stronger leadership role in influencing the adoption of e-commerce could explain in part, the uncertain answers and comprise areas for improvement in companies with e-commerce initiatives.   4. 3.4 Extent of E-Commerce Adoption of the Companies               The extent of e-commerce adoption of the companies depends on the extent of use of e-commerce tools, particularly Internet, intranet and extranet as shown in Figure 4.1 below. Relative to the size of the company, there was only one medium firm using the Internet while all the large firms use the Internet. These four companies have corporate or official websites providing information about the company. Most of the websites were informational. Only one website of a large company provided a semblance of transactional service through its tracking system. Nevertheless, even the tracking system assumed the completion of a transaction done with the company but not through its website. Two of medium companies do not have company websites, which supports the uncertain answers since these companies likely rely more on manual systems relative to online transaction processes.                     Figure 4.1: Use of E-Commerce Tools of the Companies                 The extent of linkage established through e-commerce tools also determines the engagement in e-commerce as shown in Figure 4.2 below. Although all the large companies all had websites, only two were able to establish links with business partners using online tools. These two firms were engaged in logistics services for the shipping industry, which necessitated the development of online linkages with business partners to facilitate the efficient flow of productions, finance or payments, and information to deliver products and service to end consumers. The other large firm focused on transportation services across Asia but online tools were not optimized to facilitate linkages with business partners. The same situations existed in the case of linkages with suppliers and employees. Only the two large logistics firms had intranet and extranet systems. This means that involvement in logistics services as a specialized area is the factor, which also comprises the benefit of e-commerce, encouraging firms to engage in e-commerce. Only one medium company was able to establish linkages with business partners, suppliers, employees and customers. This company also specialized in logistics services for the shipping industry.     Figure 4.2: Extent of Linkage or Network of the Companies     Although all the companies formed part of the logistics chain by acting as intermediaries, involvement in logistics management services as a separate service supported the adoption of e-commerce by the companies. In addition, the market reach of the companies also determined the engagement in e-commerce. Two of the companies operating in the domestic market had limited involvement in e-commerce. These companies may take part in e-commerce in dealing with the ports but without e-commerce capabilities of its own.   4.3.5 Attitudes of Managers towards E-Commerce               Perceptions of the benefits of e-commerce to the companies varied. Although all the respondents had experience with e-commerce tools in using port services, there is differing perspectives over the use online tools. Most of the respondents had a basic understanding of how e-commerce operates in the logistics chain but there are some respondents, especially those operating in the domestic market, without full appreciation of the value of e-commerce as a replacement for manual systems. Again, operating on a global scale, requiring the need to link with various parties comprise an incentive for e-commerce adoption relative to domestic operations where there are other means of connecting with parties outside of the Internet. Appreciation of the role of e-commerce in the shipping industry is an area for improvement to enhance the e-readiness of the shipping industry for the global digital economy. E-commerce could support the internationalization of domestic firms and enhance the competitiveness of multinational firms that have adopted e-commerce.               There is common agreement on the importance of cooperation in the success of e-commerce, especially for the firms that commenced e-commerce initiatives. Apart from the tools for establishing linkages, cooperation of the people using the tools is important to achieve efficiency. Cooperating develops from a thorough understanding of the system and the individual roles in the system. However, some of the respondents commented that cooperation occurs in a process so that during the initial stages of the e-commerce initiative, organizations may experience strain to a certain extent or resistance especially with lack of support from above to influence the change in culture to support new electronic strategies. Core concerns of managers and employees about e-commerce include job security and their competence in meeting the additional or new requirements electronic-supported operations. Companies need to plan and prepare for the adoption of e-commerce to ensure greater acceptance and achieve cooperation.               The problems in the adoption of e-commerce pertain to technical and non-technical factors. One problem mentioned is the limited investment in e-commerce. Four of the companies have company websites but the use of websites as a tool for establishing linkages is not maximized because of limited investments in website development. Limited investment also affects the quality of tools acquired to support e-commerce adoption such as limited number of computers shared by employees and poor Internet connection. Another problem is the limited knowledge sharing and training given to employees in shifting to online processes. This cause resistance problems and adversely affect the performance of employees. This then also affects the quality of service and overall benefits experienced by adopting e-commerce. Training is necessary for the effective transition into electronic systems. Still another problem is the inconsistencies in the bandwidth of different parties or lack of network systems of some parties. This means that greater use of online tools by households and businesses would also lead to a wave of adoption of e-commerce by more companies. Greater involvement in e-commerce by shipping companies would also support the development of standards in e-commerce to ensure higher connectivity.               Recommended solutions were at the business and government levels. On the part of business firms, the greater role of leadership in influencing e-commerce adoption is a recommended solution as well as the recognition of e-commerce adoption as involving effective change management. On the part of the government, improvement of infrastructure and encouragement of online use of businesses and households would support greater adoption of e-commerce.   4.4. Policy Recommendations on E-Commerce in the Shipping Industry               The policy recommendations on e-commerce in the shipping industry target the areas of e-readiness. In the case of infrastructure, there is need for the leveraging of existing infrastructures to enhance the value of broadband connections and Internet access. Doing so would encourage greater use of online functions by households and business firms and enhance the vibrancy of e-commerce systems. With regard to e-society, the government needs to provide incentives that foster the greater use of online transactions by business firms and households. Online transactions encourage e-commerce. Education on ICT also another means of supporting e-commerce adoption in the shipping industry. The promotion of localization of content language of online tools also encourages greater involvement in online transactions. With regard to e-commerce, the improvement of the physical infrastructures for the shipping industry is important in supporting the adoption of online transactions. Relative to e-government, improved transformation strategies, greater web presence, and greater use of online transactions in service delivery would create a ripple effect in the business sector including the shipping industry. In relation to the trade in ICT goods and services, more intense trade in ICT goods and service, implying the development of the ICT industry in the country and importation of ICT innovations, would also support the greater influence of e-commerce in the business sector, including the shipping industry.   CHAPTER 5     CONCLUSION & RECOMMENDATION     5.1 Introduction               The study covered the influences of e-commerce on the shipping industry in the southern peninsular Malaysia. To guide the investigation, the study has three sections. First is the identification of the current issues experienced by the shipping industry in the southern peninsular Malaysia in terms of process flows and linkages. Second is the determination and recommendation of viable means of enhancing the use of ICT to contribute a number of benefits to the company. Third is the determination and recommendation of improvements in policy to enhance the effectiveness of e-commerce adoption tools as part of competitive strategy. These inform on the influences of e-commerce on the shipping industry in southern peninsular Malaysia. The discussion provides a summary of the results, conclusions, and recommendations for future research.   5.2 Conclusion               Understanding the problems and issues faced by the shipping industry in southern peninsular Malaysia in terms of e-readiness reflects the influence of e-commerce on the shipping industry in southern peninsular Malaysia. The e-readiness of the Malaysian economy reflects the extent of its preparation for involvement in the global digital economy. There are five aspects of e-readiness, which are technological infrastructure, e-society, e-commerce, e-government, and ICT products and services trade. Economies can fall under four stages depending on the extent of development of the five areas, which are emerging, evolving, embedding or extending. In using Singapore as a benchmark, Malaysia falls under the embedding phase relative to Singapore’s placement in the extending phase. The differences lie in the existence of infrastructures and acceptance of technology by the government and society but there is lack of solid move to change, for the better, the way of doing things to digital processes and systems.               There are two ports in southern peninsular Malaysia, which are Johor Port and Port Tanjung Pelepas. These have integrated technological infrastructures in port services and systems such as the vessel clearance system and automated cargo management. These e-services provide incentives for shipping companies such as faster processing of clearance and other documents, efficient movement of cargo or freight from the ships to the cargo terminal or from the terminal to the ships, and better access to information. These incentives also encourage shipping companies to adopt e-commerce to experience the benefits of these e-services. However, there remain areas for improvement including the interconnectivity of networks systems of different ports in Malaysia and improvements in the infrastructures at Johor Port to provide better e-services. The integration of electronic tools in port services together with the areas for improvement reflect the strong influence of e-commerce on the shipping industry, at least in terms of port services.               Based on the perspective of business firms operating in Johor Port and Port Tanjung Pelepas, there are exceptions to the assumption that large firms are likely to engage in e-commerce when compared to small or medium companies. This is because there are also medium firms than engage in e-commerce while there are also large firms that do not employ e-commerce. There is a similar exception in considering the source of capitalization of the firms since there are companies with greater source of capitalization that do not engage in e-commerce while there are also companies with limited source of income that engage in e-commerce. The area of specialization is a determining factor since all the companies involved in logistics as area of specialization all adopted e-commerce. Although shipping companies necessarily form part of the logistics chain, the companies that focused on the provision of specialized logistics services had greater impetus to adopt e-commerce. This means that e-commerce has the greatest impact on logistics in the shipping industry.               Concurrently, the e-commerce tools adopted by the companies also varied. Again, the determining factor is engagement in logistics as a specialized process or service. The companies adopting e-commerce used the Internet, intranet and extranet but only to a limited extent. Although majority of the companies have a website, these are solely informational and not transactional. Only one company provided a tracking service in its website but even this assumes a previous transaction for consumers to use the tracking service. Although e-commerce has influenced shipping companies by providing alternative tools, the uptake of these tools in the shipping industry is limited.               Due to the limited use of e-commerce tools, the creation of linkages with different parties, particularly with business partners, suppliers, employees and customers. Optimization of Internet functions is necessary to establish a good relationship with customers while an extranet supports the establishment of linkages with business partners and suppliers, and an intranet facilitates the establishment of linkages with employees. As such, even while e-commerce has influenced the shipping industry by providing different means of establishing linkages with different parties in support of the achievement of business goals such as creation of value or enhanced competitiveness, the impact is limited by the non-optimization of these tools by shipping companies.               Most of the respondents had a basic understanding of how e-commerce operates in the logistics chain but there are some respondents, especially those operating in the domestic market, without full appreciation of the value of e-commerce as a replacement for manual systems. The limited understanding of the operation of e-commerce explains the limited use of e-commerce and its concurrent influence in the industry. Understanding of the benefits of e-commerce is necessary to support its adoption. The companies that have adopted e-commerce expressed agreement to the necessity of cooperation to the success of e-commerce. The adoption of e-commerce is a process requiring effective change management strategies to address problems in e-commerce adoption such as limited capital and resistance. E-commerce influences the shipping industry at the business level by creating opportunities for change in various aspects including vision, culture and strategic planning.               Problems in the adoption of e-commerce have been identified as falling under technical and non-technical aspects. One problem is limited investments in e-commerce because of only a basic understanding of the operation of e-commerce. Limited investment also affects the quality of tools acquired to support e-commerce adoption such as limited number of computers shared by employees and poor Internet connection. Another problem is the limited knowledge sharing and training given to employees in shifting to online processes that causes resistance problems and the performance of employees. A third problem is inconsistencies in bandwidth of the different parties because of variances in the quality of e-commerce tools used. These problems reflect the negative impact of e-commerce. Nevertheless, these may be necessary to achieve improved processes and systems in the successful adoption of e-commerce.               The solutions recommended were at the business and government levels. Business level solution is the stronger role of leadership in directing e-commerce adoption, ensuring better understanding of the functions of e-commerce, and development of an effective and responsive change management strategy. Government level solution comprises improvements in the infrastructure and encouragement of online use of businesses and households would support greater adoption of e-commerce.               Policy recommendations based on the influences of e-commerce on the shipping industry in southern peninsular Malaysia focuses on the areas for improvement in e-readiness. There is need to leverage existing infrastructures to improve the value obtained from already existing broadband connections and Internet access. The government needs to establish incentives that more widespread use of online transactions by households and business firms through ICT education and localization of online language. Improving physical infrastructures in support of business such as the enhancement of the online services at Johor Port or the streamlining of the network systems of different ports to enhance the effectiveness of e-commerce systems are areas for improvement in e-commerce. In e-government, improved transformation strategies, greater web presence, and greater use of online transactions in service delivery would create a ripple effect in the business sector including the shipping industry. Trade in ICT goods and services requires more intense trade in ICT goods and service, implying the development of the ICT industry in the country and importation of ICT innovations, would also support the greater influence of e-commerce in the business sector, including the shipping industry.   5.3 Recommendations               The recommendations for the study pertain to the content and objectives of the study as well as areas for future research. In terms of the content of the study, one recommendation is the expansion of the sources of primary data to ensure a greater representation of the shipping industry in southern peninsular Malaysia. Another recommendation relative to the content is the use of quantitative measures beyond descriptive statistics. Together with the collection of data from a greater number of sources, the results would yield better support for the study. 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Leveraging the Global Information Revolution for Economic Development: Singapore’s Evolving Information Industry Strategy.            Information Systems Research. 9(4), 95-117. Zott, C., Amit, R., & Donlevy, J. (2000). Strategies for value creation in e  commerce: best practice in Europe. European Management Journal, 18(5),          463-475.                                   APPENDICES   Appendix A: Survey Questionnaire ____________________________________________________________________ Instructions: Please place an answer on the line provided.   A. Demographic Data Name (optional):_________________________________________________________ Position in the Company:__________________________________________________ Department or Area of Specialization:_______________________________________ Years of Employment:____________________________________________________ 	 	    Instructions: Please place a check/s on the line provided following your selected answer. B. E-Commerce Capability of the Company 1. Select the best description of the size of the company.             Small_____                 Medium_____ Large_____ 2. Select the best description of the scope of operation of the company.             Domestic_____           Multinational_____     3. Select the best description of the source of capital of the company.             Internal_____  Both Internal & External_____                         C. E-Commerce Adoption of the Company 1. Has your company adopted e-commerce?             Yes_____                    No_____                     Uncertain_____ 2. Has e-commerce been integrated into the vision of the company?             Yes_____                    No_____                     Uncertain_____ 3. Do the top executives of the company support the adoption of e-commerce?             Yes_____                    No_____                     Uncertain_____ 4. Does corporate culture accommodate e-commerce?             Yes_____                    No_____                     Uncertain_____ 5. Has e-commerce been reflected in strategic planning and corporate communications?             Yes_____                    No_____                     Uncertain_____ ________________________________________________________________________ Instruction: Please check as many answers that apply. D. Extent of E-Commerce Adoption of the Company 1. Does the company utilize any of the following e-commerce tools?             Internet_____             Intranet_____             Extranet_____ 2. Does the company have online linkages with the following parties?             Business Partners_____          Suppliers_____           Employees_____             Customer_____           Other Parties (please specify)_____   ________________________________________________________________________ Instruction: Please explain your answer fully. D. Attitudes of Managers towards E-Commerce 1. Does e-commerce benefit the company? Please explain. 2. Do you think cooperation in the e-commerce initiative of the company determines its success? Please explain. 3. What are problems in the adoption of e-commerce? Please explain. 4. What solutions would you recommend to address these problems? Please explain.                         Appendix B: Geographical Distribution or Spread of Malaysian Ports   http://www.portsworld.com/main/ports.htm                                         Appendix C: Facilities at Port Tanjung Pelepas (PTP) http://www.ptp.com.my/container.html                     Appendix D: Facilities at Johor Port   Source: http://www.portsworld.com/Ports/johorport.htm

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