Q & A Table of Contents
Electronic Businesses and Negotiation
From: MBA Student Portugal
Question: If I want to begin a business in the electronic commerce what should you advise me to do? What are the negotiation I will have to do? And what are the problems I will face? (like legal problems)
Response: My familiarity with electronic commerce is kind of limited. I use it in the form of my Website to promote my business, provide information, and sell a limited range of products. It is an extension of an ongoing, more traditional kind of business. I'll try to address some of the issues as I see them:
Negotiations using electronic media are an extension of the normal
negotiation that takes place between people and organizations. We have progressed or perhaps regressed from the time when negotiation only meant face-to-face bargaining between individuals. Written correspondence, telephones, telegrams, etc. have now been joined by the Internet as a communications medium.
One peculiar advantage of the Internet is that one can carry on business communication, even negotiation, with people in different time zones without worrying whether you are calling too early or too late. Fundamentally, however, unless the parties communicate in a way that is understood clearly, negotiation fails to yield workable results.
Since you write from Portugal, I have no idea whatsoever what sorts of laws govern electronic commerce. In the United States we are concerned about security and privacy. Thus, for example, I have chosen not to accept credit card payments for our products because of the risk of fraud.
Selling products over the Web presents interesting challenges: you can't squeeze the orange, take the car for a test drive, or otherwise develop personal familiarity with the product when you only see it on a computer monitor. Even the addition of sound still means there is a distance involved. Currently there is a prescription drug for sale in the States called Viagra which is used to treat male impotence. Even though it is legally only available by prescription, I understand it is being offered for sale over the Web, without the intervention of a doctor. Think of the risks involved, particularly with a drug whose side effects can, in extreme circumstances, cause death.
The legal issues of electronic commerce are governed by the political units within which the commerce can take place. Since the Web is global, it is virtually impossible to be positive that you are in full obedience with every possible law. Is the sale taxable in Country X? Is the product legal in Country Y? Is information about this sort of product allowed to be made available to children under 12 in Country Z?
To simplify things, it probably makes the most sense to assess the prospect in the same way one does with any other business: legality, costs, advertising, shipping, taxation, the market for the service or product, capitalization, etc.
One can negotiate over distances using a variety of means. The addition of electronic media to the total communications mix simply means that we have the opportunity to get our messages across in an increasing variety of ways.
Negotiation itself is a low-tech human activity; electronic communication is not a replacement for the traditional media, but rather an enhancement.
Good luck and good negotiating, Steve.
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