Electronic Business, commonly known as E-Business, is the application of information and communication technologies which supports the entire activities of business. E-Business involves the processes of the entire value chain including; electronic purchasing and supply chain management electronically (Bocij et al., 2008). In the simplest form, E-Business implies buying, transferring products and services through internet. For E-Business, competence based approach provides clear set of expectations for employees, which enables them to take much better decisions and actions. This is because the approach presents them the competencies and aims they have to achieve. There are two major approaches that can be adopted for E-business; Competence-based approach and Activity-based approach.
This type of strategic management describes how firms can achieve high performance for significant time duration. The theory of competence-based strategic management assesses ways that can be adopted to gain competitive advantage and benefit in a systematic way (Bocij et al., 2008). In this type of approach, firms prepare a list of important competencies that are required for controlling the business in an effective manner and the hiring of staff that is required to fulfill those listed competencies.
This type of strategic management describes a special type of costing model that points put the key activities of an organization and then allocate each activity's cost keeping in mind the products and services and also considering the actual usage of each (Bocij et al., 2008). Through this approach, a firm gets the ability estimate the cost of the products and services involved in the business. The system has the ability to measure the cost of each and every product or service. The cost analysis helps to establish the output metrics.
Suitability of Competence-based Approach in E-Business Rather than the Activity-based Approach
The competency based approach seems to be more suitable for E-Business as compared to the activity based approach. The processes between physical business and electronic or virtual business are almost similar, but there are some sections that are best served using competency based approach. Competency based management strategy can serve E-Business in an effective manner providing benefit to the overall business setup. Small businesses can expand their profit margins by developing technical competencies in the E-business setup. Competency-based thinking demands that business holders develop an understanding of internet marketing methods strongly and intelligently (Mulford, 2010). They must be able to adopt different methods to attract internet traffic towards the website in the form of customers.
For E-Business, competence based approach provides clear set of expectations for employees, which enables them to take much better decisions and actions. This is because the approach presents them the competencies and aims they have to achieve. It also provides the employees with the overall strategy of the team and the organization leading them to better motivation and inspiration for work. It offers reference for day to day requirements and needs which establishes the E-Business to remain up to date meeting the needs of the online ...