| Electronic Commerce Research |
| © Springer Science+Business Media, LLC 2011 |
| 10.1007/s10660-011-9084-2 |
Aytaç Gökmen1
| (1) | Department of International Trade, Çankaya University, Eskişehir Yolu 29. km, Yukarı Yurtçu, Ankara, Turkey |
 | Aytaç Gökmen Email: agokmen@cankaya.edu.tr |
Published online: 31 December 2011
Keywords Virtual business – E-commerce – Digital structures – Trade – Economic development – Turkey
The reality of globalization has opened a new era after the second millennium and has intensified the competition among businesses all over the world. As a result of the intensifying competition, the applications and operations of businesses have begun to alter. Today, businesses have got to have flexible and agile structures in order to adjust to the fast changing business environments and increasing competition. A good device to adjust to the intensifying competition is to virtualize the business operations and/or constitute virtual businesses1 as to correspond to competition. Virtual business are virtual agencies made up of independent and/or interdependent network of companies based on high technology as to facilitate mutual benefits such as skills, knowledge, cost reduction and core competences. The virtual model of businesses is fluid and flexible as to accommodate the changing business conditions. Virtual businesses are cyber and unrealized. But, it is possible to utilize this tool to virtualize the whole business or parts of its operations in order to benefit from divergent commercial opportunities via e-commerce. E-commerce is the exchange of goods and services over electronic means, fundamentally the Internet. The Internet facilitated the business operations and multiplied the trade volume in the entire world by using information and communication technologies (ICTs). Yet, the aim of this paper is to dwell on virtual (virtualized) business/operations, e-commerce, harmonization of traditional business structures with e-commerce and virtual operations, focus on the development of e-government and e-commerce implementations and regulation in Turkey as well as manifest the potential of the combination of virtualized enterprises and e-commerce within the case of Turkey regarding to economic issues and offer suggestions to enhance the e-commerce volume of Turkey in order to cover its deficits.
In today’s ever changing business environments, organizations face significant and fierce challenges. Economic and other types of activities are heading in compliance with the reality of globalization. Within this context, the Internet has ascended from being a communication tool to something penetrated in a great deal of businesses, corporate and consumer world. Businesses, whether small or large, utilize ICTs to create new opportunities and penetrate into new markets as to present their products and run everyday operations through the Internet in order to reduce costs and increase profitability. Internet and highly developed ICTs have a place in every organization whether profit, nonprofit or state and facilitate the way operations carried. The main reason for the utilization of Internet and modern communication technologies by organizations is not to miss the local or global investment opportunities and attain flexible working bodies in order to accommodate the changing competition context through e-organization structures. Therefore, the businesses of today and other institutional structures could be defined as ICT focused organizations placing Internet in the core of business structures and instigating the utilization of ubiquitous network tools to operate businesses flexibly, be ready to innovate and take any chance on time. That’s why, in the 21st century, the Internet revolutionized business structures so deeply that the utilization of ICTs and modern technology has become inevitable for every institution [2, 15, 28].
Today, virtual businesses are quite good instances to adapt to the fierce competition with flexible and agile organizational structures. Virtual business are networks of independent–interdependent–partially dependent structures that have fluid and flexible structures with almost no boundaries. In other words, virtual businesses are e-organizations, cyber organizations or e-enterprises that can perform the business goals and missions over network technologies. Virtual enterprises are able to do conventional organizational duties such as design, procurement, production, distribution, marketing, sales and revenue collection by means of ICTs and electronic business activities. Business missions are executed over networks of computers on the global basis and these networks of computers constitute a collective and coherent business entity and activity. Within a virtual enterprise, ICTs are utilized to provide quick execution means and galvanize e-operations as well as to continuously explore investment benefits both on the regional and global basis. With the very nature of it, virtual businesses could be configured as to virtualize a part of conventional organizational structures; semi permanent, interdependent, partially independent and geographically dissipated units in order to improve common performance as to be receptive to ever changing market and consumer needs. Digital economy and virtual enterprises encourage companies to virtualize at least a part of their operations. Today, large or small, almost every agency is not housed at one place and has a position in the virtual world by way of ICTs; because, the virtual enterprise is a natural aftermath of the globalization of the marketplace. Virtual organization is a network of utilities that connect various agencies to create advantage. Virtual organizations and partly virtualized conventional organizations are the ones that transcend limits in order to attain sources at any time and place, work across space, time and organizational borders reinforced by high ICTs. This facilitates enterprises, suppliers and consumers to remain in contact on the 7/24 basis. Moreover, members of virtual organizations and partly virtualized conventional structures shall bear abilities according to the necessities of the current situation. Additionally, the relations must depend on mutual trust too [2, 9, 11, 17, 28].
Within the recent years, the term virtual has been used widely. In spite of its widely usage, it could sound unspecific and fuzzy. Virtual could be defined as unreal, unrealized, having no actual formation and effect which is potential and theoretical. Virtual appears within the foresight of one’s imagination through a fictitious and potential conceptualization. Therefore, virtualizing a business in an individual’s mind require modern tools, especially ICTs as to create a real utility at the end of the process. Furthermore, a virtual or partly virtualized enterprise is the one that is unrealized, potential and exists in the mindset of a stakeholder. Within a virtual organization, regarding from the point of view of a commercial aspect, individuals still work for an enterprise; offices, warehouses, factories, distribution channels, work spaces exist and are tangible, but the process runs through the ICTs with concrete results in a disseminated and extended virtual organization structure. From the strategic perspective, virtual or partly virtualized businesses enjoy a platform linking independent or interdependent agencies through the ICTs. However, even though a virtual business is unreal within the mindset of an individual, it still runs concrete activities, hires laborers, uses hardware, designs, executes processes and etc. With this respect, the virtual business could also be called as networked business, outsourced enterprise or a strategic alliance too [6, 10].
The era of globalization has become an irreversible process and the enterprises that do not adapt to this process would cease to exist. Virtual economy (digital economy) is a reality brought along with globalization and in this regard, the Internet induces conventional businesses to take advantage of virtual operations in order to increase production, sales, profits and penetrate into new markets. With the virtual opportunities, businesses benefit from global production factors, link the production and investment opportunities in various parts of the world and extend the market potential widely. Thus, businesses could have abundant investment and sales opportunities to keep the economic pace high. The quick development of ICTs and qualified production factors made this process more efficient, faster and easier. In response to increasing competition and decentralization in organizational structures, many enterprises adapted to business environments by virtualizing their operations by way of using ICTs over geographical, cultural and organizational limits. Furthermore, the rapid expansion of Internet in the world and new communication tools obliged businesses to virtualize some of their operations in order to attain new consumers, business partners and related stake holders as well as in addition to this, the ever developing information technology supplies the necessary means in this process too. The role of intensifying global competition and world wide investment opportunities are very important to foster the virtual business operations. Moreover, this new form of business entity revolutionizes the work place as well as provides immense flexibility and responsiveness in the face of changing business structures and market conditions [6, 11, 22, 23].
| • | The comprehensive development of ICTs, |
| • | Rapidly changing consumer demand, market conditions and competition, |
| • | Widespread outsourcing opportunities and the need to focus on core competences, |
| • | Accelerating impact of Internet, |
| • | Increasing workforce quality, |
| • | Globalization of production and marketing, |
| • | Decentralization in the business structures, |
| • | Short product life cycle and obligation of innovation, |
| • | New emerging markets and investment opportunities. |
| • | The reallocation of resources and reduction in costs, |
| • | Decreasing time frame to penetrate a new market and reach more consumers, |
| • | Facilitation of cooperation among experts and recruitment of a qualified workforce, |
| • | Fast innovation and R&D operations on the global basis, |
| • | Quick response to changes in market demand, competition and consumers needs, |
| • | Accommodating the businesses with more flexible and agile structures in order to accomplish more production and increase profitability, |
| • | Expansion to global markets by means of networking and rational positioning, |
| • | Option to establish temporary cooperation mechanisms for temporary investments and strategic capacity share, |
| • | Possibility of cyber and global sourcing to meet the demands fast and focus more on core business activities, |
| • | Greater degree of freedom for workers and more motivation, |
| • | Online fulfillment of tasks and easy adaption to change, |
| • | Higher degree of cohesion, online networking and information flow in the structure, |
| • | Execution of tasks regardless of borders, time and related constraints, |
| • | Fast commercialization of new products and services over the Internet, |
| • | Instigation of multilateral share of data and knowledge in inter-organizational structures by way of improved coordination and ICTs, |
| • | Ability to execute duties in various locations and share of common benefits on the global basis, |
| • | Reduce human mistakes, procurement cycle period and flexible pricing, |
| • | Lower market entry and foundation expenses, |
| • | Faster learning for workers and low cost training by attaining up dated knowledge. |
Virtual businesses or partly virtualized businesses (cyber business, digital business, and e-business) are the business structures and efficient bodies of the future of the global business world. The intensifying competition, changes in demand and necessities of consumers as well as the ease of attaining to various sources on the global basis foster the formation of virtual businesses or virtualization of parts of conventional business activities and structures. This would also facilitate having flexible and agile organizational structures to respond to various changes in the global business market and the other challenging contexts. Thus, the e-structures are used by any institutions to exploit the advantages enumerated above. Virtual organization structures could be used in marketing and services industries such as e-government, e-business, online shopping, B2B (business to business), B2C (business to consumer), non store retailing, other e-services and e-commerce. Virtual organization structures have a wide extent and will possibly be the future of the business world in the coming decades.
The virtual business or virtualization of a portion of processes in enterprises is a fundamental requirement of the 21st century in order to lower the costs, penetrate new markets, reach more consumers and extend the scope of the business. The Internet has contributed to the development of e-commerce and the era of digitalization of business operations considerably. With the very nature of it, web-based commercial applications rested on ICTs facilitated the multiplication of business operations and trade volume in both developed and developing countries. With the development of Internet and related technologies as well as with the virtual business operations and e-commerce activities, without regarding the size and significance of a business, it is possible to accommodate enterprises with various opportunities to reach new consumers and benefit from global marketing chances [3, 16].
The omnipresence of Internet has altered the way that enterprises do business. With the increase in the extent of new ICTs, the era of doing electronic business has been rising at an immense impetus [27]. Especially, within the past thirty years web-based implementations increased in volume and enhanced the way to do business too; because, the web-based business implementations have become a substantial component of global competition and a quick way to attain new markets and consumers. Within this process, the growing number of Internet users on the global basis utilizing electronic data exchange has a considerable role and has been contributing to the enhancement of digital trade operations. For, the Internet has become an easy tool to develop e-commerce, e-communication, e-procurement, e-marketing, e-finance, e-audit and relative e-business applications [5, 7, 8].
The volume of global e-commerce operations has been expanding. Depending on several estimates, the exchange of accounts on the Internet amounts to billions of dollars each year. Also, the number of Internet users is increasing continuously and expected to reach more than 2 billion penetrators at the end of 2012 worldwide. Moreover, the highest increase in the number of online population is expected to realize in China, India, Brazil and Russia where the volume of trade and economies are expanding at a great pace [1]. Internet population is more than 800 million in Asia, about 500 million in Europe, 250 million in North America and 200 million in Latin America. But the highest Internet penetration is in North America, Europe and Oceania where the highest income amounts are. This means that as long as the Internet population and security increase, the volume of e-commerce would comply with that [31].
The concepts of e-business and e-commerce are sometimes used within the same meaning and defined in numerous ways that mean retailing, creating mutual relationships and conducting business on the Internet. Nevertheless, e-commerce is the interchange of goods, services, property, ideas, values and communication through electronic means in order to run and facilitate business transactions, thereby selling products and rendering services to the consumers virtually. While, the concept of e-commerce focus on the creation of convenient and profitable relations with the consumers (individual consumers, enterprises, state and etc.), the term e-business has a wider scope comprising other businesses, competitors, state, suppliers, distributors, agents, employees, partners and other related stakeholders. So, the fundamental behind the e-business concept is to utilize the Internet and ICTs to relate a business with other businesses, consumers, partners, state and other relative bodies as well as adapt to the changing business context more effectively [4, 7, 18, p. 4, 21, pp. 6–7, 27].
| • | Business–to–Consumer (B2C): Online marketing to individual consumers, |
| • | Business–to–Business (B2B): Online marketing to other business entities, selling supplies and necessary materials by quick digital means. Also comprises of the expansion of e-business activities on the global basis too, |
| • | Business–to–Government (B2G); Businesses meeting the procurement necessities of state entities, |
| • | Consumer–to–Consumer (C2C): Consumers selling to other consumers by way of a market making channel. |
| • | Peer–to–Peer (P2P): Enables the Internet population to allocate files and digital sources without passing through a web server. |
| • | Economic factors developed over the years such as online shopping, increasing income levels and online payment tools, |
| • | Modern and highly improved ITCs that increase the speed of the Internet that instigate the volume of online shopping, ability to make transactions digitally and the development of related infrastructures, |
| • | Broad band Internet access, not only from fixed locations with cable modems but also via portable computers, cellular phones and digital portable modems in order to attain knowledge where it is needed and on time, |
| • | Changing political and legal contexts that promote the growth of e-commerce. The development of e-government and e-business codes and activities on the global basis and legal developments to accelerate this process, |
| • | Incentives taken by international organizations such as the United Nations (UN), Organization for Economic Cooperation and Development (OECD) and World Trade Organization (WTO) that ease the dissemination of Internet, legal applications on electronic issues, changing laws and regulations facilitating the utilization of digital transactions, |
| • | The adoption of the Internet applications and operations in almost every country in the world with the cultural adaptation in this process and changing social norms. In most countries, businesses are conducted face-to-face, but the dissemination of Internet and success in new digital business operations fostered the volume of e-commerce, especially with online shopping and decreasing expenditures, |
| • | Introduction of new measures to meet the security needs of web-applications, |
| • | Quick access to product/service information by websites as well as fast web order, purchase, process and customer support, |
| • | The ease of world wide advertising and dissemination of information, |
| • | Ubiquity which is to be omnipresent in any part of the globe, |
| • | Achieving flexibility in organizational structures and adapt to new contexts. |
The web-based business operations and especially the e-commerce have been developing considerably and enhancing the production and marketing opportunities both in developed and developing countries. Moreover, the digital business transactions have comprised a substantial part of enterprises in running efficient business applications and reaching as many consumers as possible since the Internet has become a considerable marketing and distribution channel. It is also possible to state that the countries with more Internet penetration also have a greater trade potential too; because, the amounting volume of trade requires flexibility and optimal allocation of time. Moreover, the e-commerce applications could meet these necessities with its speed and immense coverage. Additionally, the utilization of digital trade transactions increases the speed of business operations to reach more stakeholders and correspond to orders more effectively. The digital commercial activities also effectively combine the inter-organizational activities, relations with suppliers, distributers, partners, clients and etc online on the global basis. E-trade facilitates to attain more markets and consumers as well as to adapt to the altering consumer necessities and market conditions simultaneously, thus accommodating enterprises with flexible organizational structures. Additionally, the distance is a significant factor in international trade. Communication, transportation and increasing work load as a result of time lags would increase the cost of doing business. However, doing business online by means of digital commerce and avoiding distances and time lags would facilitate cost saving and increase the efficiency of work done. Electronic commerce would also enable enterprises to establish partnerships in various parts of the world, create fast functioning business networks and respond to the market changes, consumer demands and competition as quick as possible. Also, the digital business entities can supply consumers always with updated knowledge. Consumers can acquire credible knowledge from the web site, make orders and receive the product on time which would increase the customer satisfaction. In turn, businesses can reach more clients and increase its sales volume and income [4, 5, 8, 30]. The digital commerce activities accommodate businesses and countries with immense opportunities, but establishing the necessary structure to meet these goals is also considerable.
Harmonization is to consolidate two or more models in a combined form and to coordinate simultaneously. With respect to businesses, harmonization of an organizational structure is to change and reconcile the processes and operations within a coherent framework. However, managing organizational change and accomplishing harmonization is not an easy task; but, it is fundamental for enterprises to change their organizational structures and processes in harmony with the changing market conditions, competition and consumer demand in order to survive in the global market place. Therefore, the process of organizational change is a significant means to adapt to altering conditions in the business arena. Organizational change would accommodate a business structure with flexibility and increase competitive power and agility when executed in a harmonious manner within the external and internal contexts. The realities of globalization and breakthroughs in ICTs have given impetus to competition among enterprises. A rational tool to adapting the enterprises to changing global business environment is to apply web-based technologies and e-commerce. Adaptation to and absorption of digital trade tools would make the business structures more flexible, competitive, competition and customer oriented as well as would enable to utilize the investment and marketing opportunities on the global basis [12, pp. 1–3, 19, p. 34].
Organizational change is a variation within the form, state or quantity over time in an organizational structure and process. The organizational change could be made in the whole organizational structure, processes, products, strategy or substructures. The change process could be adaptive, radical or evolutionary and etc. Yet, eventual target of change process is to enhance business and commercial performance. The business environment, business model and the change process to adapt to the environmental conditions are three significant factors to improve the business performance. Today, the Internet enables businesses to design electronic business models and structures that facilitate the interaction with consumers, suppliers, partners, competitors and the other related stakeholders on the global basis. Furthermore, in order to manage an accomplished organizational change, the external and internal processes shall be considered thoroughly. With respect to the realities of the 21st century, electronic business models could facilitate the efficient change process as well as alter the business strategy with an e-trade strategy. When business environments change, organizations change as to utilize opportunities and prevent risks as well as comply with the environmental variations. These environmental changes occur in an extra organizational scope and digital business models enable organizations both to enjoy flexible and agile structures and exploit the investment and commercial opportunities on the global basis [1, 12, pp. 1–4, 27].
E-commerce applications could be adopted in an enterprise with business process transformation as to alter the way of things done and enhance business models, strategies and objectives. Yet, the most important point is to achieve the continuous change and adaptation process in virtual business implementations in an open ended process. In some cases, the business process transformation shall be fundamental, yet in some cases minor changes could be adequate. Changing the business structure and processes with a virtual one is a difficult process since the aftermath is unpredictable in most cases. However, a successful business transformation trough a digital structure and e-business operations shall also include constant adaptation to environmental alternations both on the internal and external basis. A constant change process within a digital business structure and applications would result in more flexible business structures, accessing to more markets and reaching more consumers, continuous knowledge update and innovation as well as improvement of competitive power. Moreover, a well designed and effective virtual business network would enable businesses to operate on a great extent. Achieved digital business operations functioning in the virtual framework would enhance consumer, partner, supplier and stakeholder relations as well as improve marketing, resource allocation, business coordination and related implementations [27].
Enterprises could also access to different markets with standardized marketing mix supposing the world as a single market place via virtual business operations. The reason is that as the technology enhances and disseminated throughout the world as well as the decrease in cultural differences and distances would bring about the similar consumer preferences. Product standardization would also bring cost reduction benefits by offering the same marketing mix combination in each market thus enabling the business to lower the expenses by avoiding the design of a different marketing mix and strategy for each target market. Using the same marketing mix in each market shall also enhance the economies of scale and save sources to make new investments in different opportunities. By all means, following a standardized commercial strategy with digital commerce applications entails to suppose homogenized consumer necessities. Thus, the modification of the marketing mix remains in the minimum level too and businesses tracking a standardized marketing approach shall also comply with a global marketing strategy as well. However, following a global marketing program in an e-commerce framework shall not be considered as a complete success story in each case. Additionally, the sophisticated structure of international business process demonstrates differences with respect to legal, political, economic, financial, cultural and other various aspects. Because of these differences it could not be possible to promote a standardized product in every market. For instance, a well known laptop computer can be marketed on the Internet in every country, but the prices would be different according to the tax applications. But, it is more feasible for industrial and high technology products to be standardized and marketed on the global basis [1].
| • | Global strategy; is implemented when the influence of global integration is intense and local responsiveness is weak. In this model, the managerial structure of a business is highly centralized and the subunits follow the decisions taken by the headquarters strictly. Industries such as mining, oil exploring and refinement, construction, heavy tools etc could be classified in this category. |
| • | Multinational strategy; is implemented when the influence of global integration is weak and local responsiveness is intense. Businesses operating under this model are inclined to have decentralized managerial structures, deployment of authority and empowerment in order to be as responsive as possible to regional changes with respect to market conditions, consumer preferences and competition. Instances are food, beverages, convenience products and household appliances. |
| • | International strategy; is implemented in markets where the influence of both global integration and local responsiveness are ineffectual. In these sorts of markets, the businesses may opt to delegate full authority to subunits in order to take action punctually in order to comply with the sensitivity level of industries. Instances are textile, printing and publication industries. |
| • | Transnational strategy; is implemented in markets where the influence of both global integration and local responsiveness are intense. As for the businesses applying this strategy, an agile and organic structure with multi-dimensional strategic capability is substantial. Furthermore, this strategic capability shall be comprised of efficient, responsive and learning focused components. Therefore, businesses exploiting the transnational strategy combined with digital means are the ones utilizing facilities in combination of standardization and localization in the mean time. Instances are chemical, automobile, informational and computer industries. |
Harmonization of business structures with digital ones is very important and difficult when attempting to switch from conventional organizational structures to virtual or virtualized business structures. Yet, successful implementations of organizational change through a virtual one by means of digital and Internet tools would also result in flexible, agile, competitive and more consumer focused business models that would also enhance efficiency, profitability and consumer satisfaction.
The Internet background of Turkey dates back to 1993 when an Internet network was established in the well known college of Turkey, the Middle East Technical University (METU). This network had long been the only gateway of Turkey to the world by an online passage. The institutions that were using Internet were supposed to have a link through the METU channel. However, beginning in 1996 the number of the Internet servers began to rise with the Scientific and Technological Research Council of Turkey (STRCT) and TR-NET (a former subunit of the Turkish Telecommunication Company). Now, there are numerous Internet servers in Turkey that facilitate the social, business and public life. The first introduction of Internet and digital means were 18 years ago but with the amazing developments in the ICTs and technological infrastructure, the Internet access multiplied. Currently the e-commerce applications in Turkey are mostly from businesses through the end users that is B2C. However, as to comply with the present e-commerce applications in the world the exchange of goods and services from business to business through digital means that is B2B is in the increase. The business operations on the virtual basis among the suppliers, partners, dealers and subsidiaries are amounting each day. These e-commerce operations are expected to increase in the near future; because, businesses acquiring significant income with e-commerce operations tend to update the digital technologies that use and access to different markets. Many well know firms establish their virtual shops in addition to physically existing ones and adapt to the global competition process and change or adjust their structures to the digital economy [20, p. 35].
| • | Establishing the essential technical and administrative infrastructure, |
| • | Constituting the legal framework, |
| • | Taking fundamental measures to promote e-commerce, |
| • | Consolidating the national e-commerce policies and applications with international ones. |
The SCST was designated as the senior body monitoring and coordinating the functions of ECCC as well as consulting to ECCC. Upon this, an arduous action was initiated in Turkey to establish the required technical and administrative infrastructure as to facilitate the virtual and e-commerce operations. Additionally, juristical shortcomings were considered and actions were taken with respect to legal matters on the legislative and administrative basis. An Electronic Commerce General Coordination Council (ECGCC) was established within the framework of the Undersecretariat of Foreign Trade to monitor these matters. Also, consecutively a Public Net Supreme Council (PNSC) and Public Net Technical Council (PNTC) were constituted to provide technical and financial support to enhance the virtual and e-commerce issues. Yet, the most important step taken by the Turkish Government to take Turkey to the digital age with virtual bodies is the e-Transformation Turkey Project (eTTP) that was initiated by the State Planning Organization (SPO) [32, 34, 35].
| • | The revision of laws, policies, regulations and other legal matters with respect to ICTs and digital development, |
| • | Promote the participation of citizens in digital and virtual operations, |
| • | Achieving transparency and accountability in public administration in order to foster digital economy, |
| • | The instigation of the exploitation of the Internet, ICTs, digital applications and web operations to improve public and private interests mutually. |
In order to achieve these objectives and ensure the successful implementation of the eTTP a new coordination unit namely the Information Society Department (ISD) was established within the SPO. The purpose of establishing ISD was to prevent malfunction within the process of e-transformation. The project tends to comprise the whole Turkish society, maximize national benefits both on the public and private basis and increases the added value in the economy as well as is aimed at transforming the labor intensive traditional business market of Turkey into a digital knowledge economy [14, p. 104].
The eTTP is expected to increase the global competitiveness of Turkey with respect to public and private implementations, improve digital economy and integrate the economy of Turkey with that of the world by digital and virtual means. It is potential cost is 2 billion USD. It also aims at developing the human and physical sources of Turkey as well as constitutes a network impact in the whole country and diffuses the network efficiency in every phase of life. Furthermore, regarding to macroeconomic reflections, with the expected positive outcome of ICTs, digital economy and virtual business operations, the GDP growth of Turkey is anticipated to increase an additional 2% each year. The additional 2% GDP increase is expected to realize with 1.4% from the developments in labor productivity and 0.6% from the rise in employment opportunities thereby enhancing the national income [14, pp. 104–105, 13, p. 243, 36].
The implementation of the eTTP was begun with the initiation of a public portal (gateway) called the e-Government Gateway (eGG, www.turkiye.gov.tr). eGG is a means over which government services are rendered to legal and natural persons from a single point. The gateway enables parties to access information on secure and 7/24 basis which was designed as an uninterrupted, secure and fast one. The eTTP envisages the modernization of the public administration and establishment of an effective public network to facilitate the process both for the legal and natural persons. The eGG would facilitate the way of jobs done by electronic means. Also, the services to be delivered to parties by the eGG are as income tax declaration and notification, job searching, social security issues, commercial business establishment, personal document applications, car, driving license, passport, building permission applications, information inquiries, customs applications and much more [36, 41].
| • | Arranging e-commerce education projects for the businesses, especially for the small and medium sized enterprises (SMSE), |
| • | Providing the necessary financial sources to adopt e-commerce and virtual business operations in ordinary business structures, especially beginning from SMSE, |
| • | Making necessary legal notifications to facilitate e-commerce and comply with the global e-commerce regulations and transactions, |
| • | Lowering the prices of communication services in order to decrease the cost of e-commerce transactions, |
| • | Adapting the public institutions and their infrastructures to e-commerce and e-government implementations as efficiently as possible, |
| • | Promoting incentives to communication servers in the mean time taking the competition matters into consideration, |
| • | Establishing the online company registration system, forming a joint e-commerce information pool and facilitating the common utilization of the documents used in e-commerce. |
A considerable tool to develop the e-commerce in Turkey is the initiation of electronic signature (e-signature) in everyday life. E-signature is the sort of data in electric format which is linked to other electronic data used for authentication and would enable parties do business from remote places by digital ways. E-signature is a means to online verification. It is the substitution of handwritten signature with the digital one. Moreover, a profound software technology and legal precautions are necessary to initiate and develop this process [26]. In order to legalize the utilization of e-signature in Turkey, the Electronic Signature Law, number 5070 was issued January 23, 2004. The objective of the Law is to define the basics for the legal and technical properties and implementation of e-signature. E-signature is provided by the Electronic Certificate Service Providers (ECSPs) that are either public entities or establishments of natural persons or private law legal agencies that provide qualified electronic certificates and other related services. In order to ensure process safety, the ECSPs use secure products and systems, implement operations in reliable ways and take all fundamental precautions to prevent the copying and distortion of the certificates. A secure e-signature provided by an ECSP is solely assigned to a signature owner, enables the authentication of the identity of a user and has the same legal impact as that of a handwritten signature [33].
As to encourage the use and spread of e-signature, various measures were taken with regards to both ECSPs and activities of the third parties. ECSPs are liable for compensation of damages suffered by third parties as a result of infringing the provisions of the Law or the ordinances published in accordance to the e-signature law. Also, deterrent provisions are envisaged in the Electronic Signature Law to avoid the misuse and forgery of e-signature and ensure secure utilization. A person obtaining, delivering, coping or recreating an e-signature without the consent of the certificate holder shall be sentenced from 1 to 3 years and a minimum of 500 TL fine. If a person partly or fully generates electronic certificates without authorization or falsifies deliberately shall be sentenced from 2 to 5 years and fined minimum 1000 TL [33]. As it is clear in the Law that the state highly promotes the usage of e-signature in business issues in order to increase the digital commercial volume and takes necessary measures for secure application. However, the utilization of e-signature in the Turkish public would require some more time as the adoption of new patterns instead of conventional ones takes time.
The Republic of Turkey had been exposed to two major economic downturns one in 2001 and the other one in 2008 (Global Financial Crisis). The 2001 economic crisis resulted from the weak financial structure of Turkey and the 2008 Global Financial Crisis began in the mortgage market in the USA and spread the world. Both of the economic crises affected the Turkish economy very adversely. As a result, many businesses went bankrupt and the remaining ones began to look for new remedies to lower the expenses and expand to new markets [29]. At this point the virtual business operations and e-commerce transactions are highlighted as considerable investment choices. The Turkish businesses can expand to new markets, attain to new consumers, make their business operations with the related stake holders more efficiently and have flexible and agile structures as well as lower expenses by means of virtual business operations and e-commerce.
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011a | |
|---|---|---|---|---|---|---|---|
| Number of e-commerce transactions | 18,286,776 | 21,688,037 | 54,145,804 | 64,560,748 | 66,487,123 | 91,923,281 | 47,914,190 |
| Volume of e-commerce transactionsb | 925 | 1,608 | 3,691 | 6,058 | 6,848 | 10,150 | 5,170 |
| Number of transactions made with virtual cards | 540,118 | 843,545 | 1,416,595 | 1,801,101 | 1,595,330 | 2,995,585 | 2,035,704 |
| Volume of transactions made with virtual cards | 23.0 | 36.5 | 57.3 | 80.5 | 89.0 | 261.5 | 180 |
When Table 1 is reviewed it is obvious that the amount of e-commerce transactions has been amounting since 2005 and the number of e-commerce transactions 5 folded from 2005 to 2010. Furthermore, only the number of e-commerce transactions in May 2011 is more than two and a half times of the entire 2005 figure. This means that the Turkish entrepreneurs have tended to make virtual business operations more and adopted them in their businesses too. Additionally, the volume of e-commerce has been rising as well. The total volume of e-commerce was less than a billion $ in 2005 and it almost 10 folded in 2010. The volume of the e-commerce transactions only in May 2011 is 5.1 billion $ which is more than five times of the total volume of the year 2005. Here, another significant point is that, the number and volume of e-commerce transactions increased from 2008 to 2009 despite the adverse effect of the global economic crisis. This could also mean that making virtual business operations, e-commerce and participating in digital economy would lower the business transaction costs and facilitate the growth of commercial volume [37].
The number of transactions made with virtual credit cards was 540,118 in 2005 and increased to 2,995, 585 in 2010, almost 6 folded. The volume of transactions made with virtual credit cards was 23 million $ in 2005 and increased to 261.5 million $ in 2010, almost 8 folded. However, the amount of commercial transactions made with virtual cards is not that significant when compared to the volume of total e-commerce transactions. This could mean that the Turkish consumers do not trust and tend to make money exchange on the Internet, but only do e-commerce transactions and make payments via regular financial channels instead. In addition to this, the number of registered businesses entities in Turkey is 1,255,179, but among these businesses, the number of virtual enterprises is 25,881. Even though the number of virtual enterprises is very small when compared to regular business entities, the number of e-commerce transactions and the volume of e-commerce transactions substantiate the importance of digital economy in Turkey. In addition to this, the sectors where e-commerce is mostly applied in Turkey are car rental, gas stations, travel agencies, housing, jewelry, medical, garments, catering, retailing, furniture, household appliances, telecommunication, finance, insurance, hardware and food sectors [37]. These sectors are considerable ones in the everyday business life and the increase of commercial volume in these sectors would instigate the impetus in the Turkish economy as well.
| Years | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011a |
|---|---|---|---|---|---|---|---|
| GDP | 481.5 | 526.4 | 658.8 | 741.8 | 617.6 | 730 | 781 |
| GDP growth rate (%) | 7.6 | 6.9 | 4.7 | 1.1 | 4.7 | 8 | 4.5 |
| GDP per capitab | 5,008 | 7,609 | 9,100 | 10,400 | 8,400 | 10,000 | 10,600 |
| Unemployment (%) | 10.3 | 9.9 | 9.9 | 12.3 | 16.0 | 11.9 | 11.5 |
| CPI (%) | 7.7 | 9.7 | 8.4 | 10.1 | 6.5 | 6.4 | 4.9 |
| WPI (%) | 2.7 | 11.6 | 5.9 | 8.1 | 8.9 | 8.8 | 6.2 |
| Exports | 73.5 | 85.5 | 107.2 | 132.0 | 102.2 | 113.9 | 43.3 |
| Imports | −116.8 | −139.6 | −170.0 | −201.8 | −140.9 | −185.5 | 77.0 |
| Total trade volume | 190.3 | 225.1 | 277.2 | 333.8 | 243.1 | 299.4 | 120.3 |
| Volume of e-commerce transactionsc | 0.925 | 1.6 | 3.6 | 6.0 | 6.8 | 10.1 | 5.1 |
| Foreign trade deficit | −42.3 | −54.0 | −62.8 | −69.8 | −38.7 | −71.6 | 43.7 |
| Current account deficit | −22.6 | −32.2 | −38.0 | −41.4 | −13.9 | −48.6 | −29.0 |
| Internal debt | 182 | 175 | 195 | 211 | 219 | 235 | 238 |
| External debt | 170.6 | 206.5 | 247.2 | 289.8 | 268.2 | 282.3 | 290 |
| Total debt | 352.6 | 381.5 | 44.2.2 | 500.8 | 487.2 | 517.3 | 528 |
| Budget deficit | 7.2 | 3.8 | 10.6 | 13.0 | 34.8 | 26.4 | 2.6 |
The Turkish economy is one of the largest in the world and pursues an outward oriented commercial policy. For, it is substantial for countries to increase the GDP and trade volume in order to have competitive power over other countries. Yet, the e-commerce applications are another means to increase the GDP and trade volume as well as attain to many other consumers. As it is clear in Table 2 that the GDP volume and GDP growth rate have raised in Turkey since 2005, but it only decreased in the 2008 global financial crisis period. Additionally, the consumer price index (CPI) and the whole sale price index (WPI) decreased significantly, but only adversely affected in the 2008 global financial crisis period too. However, apart from these values, other economic figures indicate that the Turkish economy has not been doing well enough to be a global actor. First of all, the unemployment rate is at a substantial level. Second, the Turkish economy is subject (and/or has been subject) to a considerable amount of current account deficit, internal debt, external debt and budget deficit which weaken the economy at a great extent. These deficits in the economy mean that the burden of Turkey amounts in the face of other countries each day as well as spending the hardly earned currency and national savings to cover the gaps. At this point the production and commercial power are very important to cover the gaps in an economy. However, the Turkish economy is subject to a significant quantity of negative trade volume. The amount of e-commerce volume is very small when compared to the total trade volume too. Since it is obvious that the Turkish economy is not doing well enough and the main economic figures indicate an adverse impact, it is rational to strive to increase the production and commercial volume of Turkey in the first instance. Yet, considering the fact that there is a great trade deficit, it is possible to increase the commercial volume by doing e-commerce and would be more effective, flexible and less costly when compared to conventional commercial activities.
It is evident in Table 2 that the Turkish economy is not following an easy track and the indicators are showing a downturn. However, it is possible to cover the gaps with more production and increasing the commercial volume. E-commerce facilitates the business operations with agile and flexible structures, enables to reach different markets and more consumers, lowers expenses as well as enhances the commercial volume. However, the e-commerce volume of Turkey is very small when compared to total trade volume. Thus, it is fundamental to take the necessary precautions, especially by the government, to promote e-commerce and its byproducts like software and hardware industry as well as to create new production facilities and additional employment.
21st century is the age of globalization, high ICTs, digital economy and digital business structures. Virtual business is to transform or combine the conventional business transactions and structures with web based business models resting on high technology. Virtual business is to execute the regular business activities with the consumers, competitors, suppliers, state and other related stake holders on the electronic basis. Yet, e-commerce is a part of virtual business transactions that is the exchange of goods and services over the Internet.
The virtual business operations and e-commerce facilitate the organizations to have flexible, agile and fluid structures. These sorts of business models enable companies to respond to competition and meet consumer demand quickly, lower expenses, focus on core competences as well as attain new consumers and markets. E-business and e-commerce in virtual organizational structures allow the businesses to execute their transactions on 7/24 basis, at any time and any place. Virtual structure could be constituted permanently or temporarily depending on the necessity and be modified or rearranged according to the conditions.
The virtual business applications and e-commerce are also in the rise in Turkey. The main frame of the digital economy and administration was established in Turkey before the year of 2000 in a complicated structure with the constitution of SCST, ECCC, PNSC and PNTC. Yet, the most important step was taken towards a digital economy and administration with the initiation of the eTTP under the supervision of SPO with an access through the e-Government Gateway. With the breakthroughs in digital applications in Turkey, the digital economy and e-commerce began to increase at a significant pace beginning in 2005. From 2005 to 2010 the e-commerce volume and number of transactions multiplied in Turkey at an important extent. However, when the e-commerce volume of Turkey is compared with the total trade volume (Table 2), it is evident that the e-commerce operations have to be developed in Turkey. Moreover, as it is obvious in Table 2 that the main economic figures in Turkey are indicating constraints, the development of e-commerce in the forth coming years could be a remedy and additional value to the economy since doing e-commerce could result in lower costs and higher profit when compared to conventional way of doing business.
Moreover, the Turkish entrepreneurs shall follow the transnational strategy when doing e-commerce since the global integration is high tanks to globalization and the consumer demand has been increasing in almost every region of the world. Today, the structures of the businesses should be decentralized and organic in order to respond to ever-changing consumer demand punctually in order not to miss market opportunities and create flexible capability based on standardization and localization at the same time. The Turkish e-commerce businesses shall adapt their structures and strategies to the transnational strategy when the business is strong and ready to go international and face the fierce competition in the global market place; because, doing business in different parts of the globe would be beneficial to penetrate into new markets, allocate risks and avoid possible domestic market imperfections.
| • | Developing the digital economic structure with government stimulation, |
| • | Improving the Internet security in Turkey while doing virtual business transactions, |
| • | Promoting the private enterprises to benefit from the ICTs and web based commercial means more, |
| • | Informing the private entrepreneurs at a significant extent on virtual business transactions and e-commerce as well as giving the necessary training, |
| • | Providing financial credits and long term loans to invest in e-business sector and when penetrating new markets by e-commerce transactions, |
| • | Spreading consciousness on digital economy among the public and promote the citizens to do more e-transactions, |
| • | Increasing awareness on e-government applications, digital transactions and e-Government Gateway in the public, |
| • | Constituting a public secure network fully equipped with all sorts of facilities to develop and expand the scope of virtual businesses and e-commerce in Turkey. |
In addition to these, a supreme authority solely responsible from e-business and e-commerce matters shall be established instead of the ECGCC operating under the Undersecretariat of Foreign Trade. As explained previously, Turkey has been and is subject to substantial macroeconomic deficits and e-commerce should be a low cost and profitable remedy to cover the deficits both in the public and private sector. Therefore, a supreme authority, for instance the Supreme Council of E-Business and E-Commerce, independent of any other institution and possessing its own legislation and jurisdiction could be established since e-commerce and e-business is a vital issue. This authority could monitor the application of e-commerce and e-business regulations and reinforcement of them.
Furthermore, initiatives should be taken by the government to foster the utilization of e-signature since conformation of actions within large limits can increase the volume of work done. Today, the e-signature is used mostly within the limits of every organization and not standardized. Also, there is not cooperation to standardize the process. This leads to the problem of uniform perception of e-signature in organizations. Therefore, application of standardization shall be established within the code by enacted the public authority. Additionally, the Turkish public is not very inclined to do transactions by electronic means even though the transactions are monitored by the Supreme Council of Telecommunication and security forces. Therefore, the government shall encourage and inform the public on the safety of processes and increase the digital business and trade volume in the near future in order to increase the number of digital transactions and make the economy of Turkey an integral one of the world.
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Footnotes
Virtual business operations, e-commerce & its significance and the case of Turkey: current situation and its potential
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