What Are Transaction Costs and Why are They Important?

Key Topics

 

1. What are transaction costs and why are they important? Provide one example of how electronic commerce could help change an industry’s economic structure from a hierarchy to a network.
2. What is the difference between organizational culture and company climate? What kinds of culture and climate should be developed in an organization to motivate its employees to share their knowledge with others? How would you as a manager motivate your employees to willingly share their knowledge and incorporate it into the organizational knowledge management system (KMS)?
3. You are the administrator of a Web server for an electronic commerce site. The site receives about 12,000 visitors per day, maintains a product catalog of about 4000 items, and processes about 2000 sales per day. The average sale amount is $87. The site accepts four major credit cards and it outsources its payment processing for all of the credit cards to another company. In about 200 words, describe the types of threats that could be launched against your Web server, given the types of activity (catalog presentation, order entry, and payment processing) it handles and the volume of those activities. Consult sources on the Internet or in your library to help you complete this exercise.
4. In about 400 words, describe the similarities and differences between XML and HTML. Provide examples of at least two situations in which you would use XML and two situations in which you would use HTML.
5. You have decided to buy a new printer for your home office. List specific activities that you must undertake as you gather information about printer capabilities and features. Use Web sites of 3-4 office supply retailers to gather information. Write a short summary of the process you undertook so that others who plan to undertake a similar task can use your information.

 

 

1. What are transaction costs and why are they important? Provide one example of how electronic commerce could help change an industry’s economic structure from a hierarchy to a network.

Answer:
 
Transactions costs are those expenses that are incurred whenever there is the process of buying or selling. Transactions costs are important as it allows the stakeholders in understanding the total return from the transaction. The example from the ecommerce industry: The advancement in the ecommerce business has allowed the organization change the way things were being communicated. In the previous days, the companies followed the top-down approach of the communication where numerous papers were used and the communications were difficult and confusing. However, the ecommerce has helped in the introduction of the lateral communication where the various functions can interact with everyone at any time and thus removed the paper based system. It reduced the transaction to bare minimum in comparison to earlier period.
 

2. What is the difference between organizational culture and company climate? What kinds of culture and climate should be developed in an organization to motivate its employees to share their knowledge with others? How would you as a manager motivate your employees to willingly share their knowledge and incorporate it into the organizational knowledge management system (KMS)?

Answer:Organizational culture refers set of values and consideration of the norms that are found to be similar among specific set of people. These are the important beliefs that are comparatively stable and develop over time. On the other hand, company climaterefers to the current level of health. It refers to the way the company staffs feel about the jobs, and various entities. It also combines the productivity level of each staffs and the capability of the organization as a whole to reach certain goals.The employees should be given extrinsic rewards whenever they contribute in sharing their knowledge with others or the organization as a whole. I would implement various reward structure that can motivate the employees to share their knowledge. Moreover, the same will be uploaded on KMS by assigning the specific duties (such as KRA for a certain week or month).
 

3. You are the administrator of a Web server for an electronic commerce site. The site receives about 12,000 visitors per day, maintains a product catalog of about 4000 items, and processes about 2000 sales per day. The average sale amount is $87. The site accepts four major credit cards and it outsources its payment processing for all of the credit cards to another company. In about 200 words, describe the types of threats that could be launched against your Web server, given the types of activity (catalog presentation, order entry, and payment processing) it handles and the volume of those activities. Consult sources on the Internet or in your library to help you complete this exercise.

 

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Answer:There are many potential threats that can be expected to a Web server. Some of them are: 

- Taking the complete site or corrupting the data file present on the server can be one of the potential threats. This can be conducted by the competitors who want the company to stall all the activity. This is done to harm the competitors.
- The second threat can be in the form of gaining the access to the customers’ personally identifiable information. This is also done primarily by the competitors who want to get the access to the personal data of the clients or any third party who keeps interest in selling the information to the competitors of the existing company.
- The third form of threat can be in the form of gaining the access to the payment information. The payment information is sought by unsocial elements within the society who look for stealing money from the others’ banks.
 

4. In about 400 words, describe the similarities and differences between XML and HTML. Provide examples of at least two situations in which you would use XML and two situations in which you would use HTML.

Answer:HTML refers to the Hypertext Markup Languagethat states the way documents need to be developed. It instructs the way codes should be formed and use of various tags within the document need to be formatted. XML refers to the markup language that gives the description of the text. There are numerous differences between both the languages along with the similarities. HTML is not specific about the case-sensitivity, whereas XML considers this element. In HTML some of the elements might not contain both the closing and opening tags, whereas in XML it is mandatory that all the codes have opening and closing tag. Moreover, formal nesting is not necessary in HTML, whereas same is necessary in XML. HTML is considered as less strict in comparison to XML. XML can help organizations such as financial institutions in the development of the KMS whereas, HTML cannot perform that responsibility and can be used to develop websites that can be used in spreading knowledge be it far-off students or employees.
 

5. You have decided to buy a new printer for your home office. List specific activities that you must undertake as you gather information about printer capabilities and features. Use Web sites of 3-4 office supply retailers to gather information. Write a short summary of the process you undertook so that others who plan to undertake a similar task can use your information.

Answer:Mentioned below are the steps that were followed while deciding over purchase of printer:
1.    Determination of the OS currently installed in the computer and the printer type that will be the best fit with the OS.
2.    Understanding the type of printer required for the business. It was determined that the business needs a printer with a memory card in it.
3.    Understanding the budget for the printer defined by the company.
4.    Understanding and refining the features that is most important for the company.
5.    Factors to consider can be the image resolution, operating costs, speed, size of printout, post-script fonts, photo-quality, digital camera cards and memory sticks, network enabled, image processing, ease of use, compatibility and warranty.
6.    Bringing all the information defined above and visiting three to four printer sellers either online or offline

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