8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
1/61
An Investigation into the Adoption of E Commerce at Premier Banking
Corporation
A Research Report
presented to the
Graduate School of Business Leadership
University of South Africa
In partial fulfilment of the
requirements for the
MASTERS DEGREE IN BUSINESS LEADERSHIP,
UNIVERSITY OF SOUTH AFRICA
by
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
2/61
Precious Rachael Mbire
Student # 70994307
ACKNOWLEDGEMENTS
I am indebted to my fellow colleagues, workmates and managers at Premier Bank for
their support and contributions during the data collection exercise. In addition, I would
like to thank my family for all of their prayers, love and support they have provided me:
my mom Vongai, sisters Charity, Beulla and Moreblessing and my little niece Nattie, a
true source of joy. I am especially grateful to my supervisor Mr. B. Masiya for his
dedication and professionalism in guiding me through this project.
2
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
3/61
ABSTRACT
This study investigates the level of adoption to e-commerce by Premier Banking
Corporation. (PBC)
The study was done using the literature survey method and the questionnaire. The
questionnaire was administered personally by the researcher leading to a 99% return
rate.
The major conclusion from this study is that the level of e-commerce at (PBC) is
relatively poor as evidenced by the lack of internet banking.
Recommendations drawn from this research are that (PBCs) senior management
should be committed to the establishment of a more effective information system and
invest substantially more in information technology to meet the demanding needs and
expectations of customers.
The study presents a further study to assess the effects of successful implementation
of e-commerce on the operations of PBC.
3
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
4/61
ContentsPage
ABSTRACT ................................................................................................................................... 3
This study investigates the level of adoption to e-commerce by Premier Banking Corporation.
(PBC) .............................................................................................................................................. 3
Contents .......................................................................................................................................... 4
CHAPTER 1 INTRODUCTION AND RESEARCH PROBLEM ................................................ 6
1.1 BACKGROUND OF STUDY ............................................................................................7
1.2 PROBLEM STATEMENT ................................................................................................8
1.3 OBJECTIVES OF THE STUDY ......................................................................................8
1.4 STUDY PROPOSITION ....................................................................................................8
1.5 STATEMENT OF HYPOTHESIS ................................................................................... 8
1.6 SCOPE OF THE STUDY ..................................................................................................9
1.7 JUSTIFICATION OF THE STUDY ................................................................................9
1.8 ASSUMPTIONS OF THE STUDY ...................................................................................9
1.9 RESEARCH OUTLINE .................................................................................................... 9
CHAPTER 2 LITERATURE REVIEW ....................................................................................... 10
2.1 INTRODUCTION ............................................................................................................ 11
2.3 BANKING CONSUMER OPTIONS .............................................................................. 17
2.4 TYPES OF ONLINE BANKING ....................................................................................17
2.5 GLOBAL EMPIRICAL RESEARCH ON E COMMUNICATION ........................ 192.6 SUCCESS FACTORS IN E-COMMERCE .................................................................. 21
2.7 GETTING THE BUSINESS ON THE WEB ................................................................. 24
CHAPTER 3 METHODOLOGY ................................................................................................. 27
3.1 INTRODUCTION ............................................................................................................ 27
3.4 SAMPLING ....................................................................................................................... 29
3.5 DATA COLLECTION ..................................................................................................... 32
CHAPTER 4 RESEARCH FINDINGS AND DISCUSSION ..................................................... 40
4.1 INTRODUCTION ............................................................................................................ 40
4.2 RESPONSE RATE ........................................................................................................... 40
4.3 LENGTH WITH ORGANISATION .............................................................................. 40
4.4 UNDERSTANDING E-COMMERCE ........................................................................... 41
4.5 ELECTRONIC COMMUNICATION TECHNOLOGY USED AT PBC .................. 43
4.6 LEVEL OF E-COMMERCE AT PBC ...........................................................................44
4.7 E-COMMUNICATION PRODUCTS ............................................................................ 45
4.8 BENEFITS OF E-COMMUNICATION ........................................................................ 46
4.9 PROBLEMS OF E-COMMUNICATION ..................................................................... 46
4.10 SUCCEESFULL IMPLEMENTATION OF E-COMMERCE .................................. 47
4.11 E-COMMERCE SUITABILITY AT PBC ................................................................... 48
4.12 RESOURCES FOR E-COMMERCE ........................................................................... 49
4.13 CHALLENGES BEING FACED BY PBC DUE TO LACK OF E-COMMERCE . 49
4.14 CHAPTER CONCLUSION .......................................................................................... 50
5. CONCLUSIONS AND RECOMMENDATIONS ................................................................... 51
5.1 CONCLUSIONS ...............................................................................................................51
5.2 RECOMMENDATIONS OF THE STUDY ................................................................... 52
4
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
5/61
5.3 AREA OF FURTHER STUDY ....................................................................................... 52
APPENDIX A COVERING LETTER ...................................................................................... 53
APPENDIX B- QUESTIONNAIRE ............................................................................................ 54
LIST OF REFERENCES .............................................................................................................. 59
List of figures
Figure 1 Length in organisation .................................................................................................... 40
Figure 2 level of e-commerce at ZSE ........................................................................................... 44
Figure3 Is e-commerce suitable for business at PBC? ................................................................. 48
Figure 4 Do you have adequate resources to adopt e-commerce? ................................................ 49
5
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
6/61
List of tables
CHAPTER 1 INTRODUCTION AND RESEARCH PROBLEM
1.1 INTRODUCTION
6
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
7/61
An analysis of how the adoption of ecommerce solutions can enhance the
performance of Premier Banking Corporation is the focus of this study. This has been
necessitated by the advent of the digital age, especially e communication that has
offered the financial services sector opportunities for reduced transaction costs,
improved customer service and enhancement of customer base.
1.1 BACKGROUND OF STUDY
Premier Banking Corporation is a wholly owned subsidiary of Premier Finance Group, a
Zimbabwean registered financial services group of companies. The Group comprises of
three wholly owned subsidiaries which are, Premier Asset Management, PremierBanking Corporation, (PBC) and Premier Capital Management. PBC is currently the
Groups foremost operating subsidiary, having led the companys entry into the
financial services sector in 2002 as Premier Discount Company Limited. The Discount
House was registered as a financial institution under the Banking Act in August 2002
and opened its doors to the public on 1 October 2002. Premier Discount Company
Limited converted to a merchant Bank in November 2004 and consequently changed
its name to Premier Banking Corporation. PBC is an integral part of a sophisticated
financial sector that consists of the Reserve Bank of Zimbabwe at the apex,
commercial banks, merchant banks, discount houses, finance houses and the
insurance sector.
PBC comprises of six client facing units namely, Agri-finance, Business Banking,
Financial Markets, Global Banking, Investment Banking and Personal Banking. The
bank is structured to best serve its target clientele and interacts with those clients
through a combination of physical and electronic channels that offer a spectrum of
banking services, from the basic vanilla products to customised solutions for its diverse
market.
Despite PBCs well established nature, the bank has not fully capitalized on the
technological advancements mostly on the area of e communication. The bulk of the
organisations business is carried over the counter physically and this has had far
reaching inconveniences to the market especially in todays fast paced technological
world where real time decisions ought to be made. This has ultimately constrained the
7
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
8/61
growth of PBC and has also led to a decline in the number of corporate clients with fully
active transactional accounts with the bank.
1.2 PROBLEM STATEMENT
PBC has not fully embraced e commerce in its operations and this has been noted as
a major growth constraint of the organization. Instead of continuously investing more
resources in new technology, it seems the bank has somewhat relaxed after the initial
adoption of e commerce programmes. The bank provides a limited range of e
commerce products and as such clients have been negatively affected since one can
not make real time decisions. Furthermore, the bank seems to have failed to capitalise
on the benefits of the e commerce programs adopted.
1.3 OBJECTIVES OF THE STUDY
(i) To assess the level of e commerce at PBC
(ii) To identify operational constraints caused by the lack of e communication
at PBC.
(iii) To establish the benefits that have been realised by the bank through theadoption of e commerce solutions.
(iv) To analyse how the adoption of e commerce at PBC could facilitate smooth
business flow between the bank and its customers.
(v) To recommend ways in which PBC could enhance its operations through the
adoption of e commerce solutions
1.4 STUDY PROPOSITION
The study proposes that the adoption of e commerce at PBC can lead to the
organisations superior performance.
1.5 STATEMENT OF HYPOTHESIS
(i) Null Hypothesis
8
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
9/61
There is no relationship between the implementation of e commerce solutions
at PBC and its performance. Enhanced performance of PBC is independent of
the adoption of the e commerce solutions.
(ii) Alternative Hypothesis
The implementation of e commerce solutions can enhance the performance of
PBC.
1.6 SCOPE OF THE STUDY
The study will be carried out mainly at PBC headquarters in Harare. This is so becauseof financial and time constraints as well as from the fact that most of the strategic
decisions are made and found at the headquarters. The study respondents shall be
staff and management at PBC head office and selected clients.
1.7 JUSTIFICATION OF THE STUDY
The study results and recommendations will serve to bridge the literature gap that
exists since the existing literature reveals little regarding the impact of e commerce in
Zimbabwes financial sector. Furthermore, uncertainty exists as to what extent e
commerce benefits financial institutions in a developing country like Zimbabwe. The
study results will also benefit researchers and consultants in this field with study
material. PBC will also benefit if it embraces the recommendations that will be made at
the end of this study.
1.8 ASSUMPTIONS OF THE STUDY
(i) The respondents will provide accurate and relevant information
(ii) The study will receive maximum co operation from the respondents.
(iii) The prevailing situation at PBC will prevail up until the end of the study.
(iv) Data collection instruments will have adequate reliability and validity.
1.9 RESEARCH OUTLINE
9
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
10/61
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
11/61
2.1 INTRODUCTION
In this section, literature by different authorities on ecommerce will be reviewed.
The historical development of ecommerce, Business to Business (B2B) e
commerce, success factors and benefits of ecommerce will be discussed. This
section will form the basis on which study findings will be discussed and it provides
a link between this study and what other researchers and authors have found out in
relation to the research problem, through reviewing related literature. The main
thrust of this literature review is to highlight the relationship between variables in the
study and empirical evidence so as to provide basis for testing the hypotheses
postulated in the previous section and for advancing arguments. Literature review is
an essential element of research and according to Leedy (1982), the more one
knows about the investigations relevant to ones own study the more one can
approach the problem of interest in ones area of investigation.
2.2 HISTORICAL DEVELOPMENT OF ELECTRONIC COMMERCE
Kessler (2003) put forward that electronic commerce consists primarily of the
distributing, buying, selling, marketing, and servicing of products or services over
electronic systems such as the Internet and other computer networks. It can involve
electronic funds transfer, e-marketing, online marketing, online transaction processing,
electronic data interchange (EDI) and automated data collection systems. He adds that
it typically uses electronic communications technology such as the Internet, extranets,
e-mail, e-books, databases and electronic catalogues. This study proposition is going
to review how the adoption of such e commerce solutions can enhance the
performance of PBC.
The meaning of the term "electronic commerce" has changed over the last 30 years.
Originally, "electronic commerce" meant the facilitation of commercial transactions
electronically, usually using technology like Electronic Data Interchange (EDI) and
Electronic Funds Transfer (EFT), where both were introduced in the late 1970s, for
example, to send commercial documents like purchase orders orinvoices electronically
(Bach and Erber, 2001).
According to Alexander (2000) e-commerce is defined as the complete set of
processes that support commercial/business activities on a network. In the 1970s and
1980s, this would also have involved information analysis. The growth and acceptance
of credit cards, Automated Teller Machines (ATM) and telephone banking in the 1980s
11
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Computer_networkhttp://en.wikipedia.org/wiki/Electronic_funds_transferhttp://en.wikipedia.org/wiki/E-marketinghttp://en.wikipedia.org/wiki/Online_marketinghttp://en.wikipedia.org/wiki/Online_transaction_processinghttp://en.wikipedia.org/wiki/Electronic_data_interchangehttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Extranethttp://en.wikipedia.org/wiki/E-mailhttp://en.wikipedia.org/wiki/E-bookhttp://en.wikipedia.org/wiki/Databasehttp://en.wikipedia.org/wiki/Catalogueshttp://en.wikipedia.org/wiki/Electronic_Data_Interchangehttp://en.wikipedia.org/wiki/Electronic_Funds_Transferhttp://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Invoicehttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Computer_networkhttp://en.wikipedia.org/wiki/Electronic_funds_transferhttp://en.wikipedia.org/wiki/E-marketinghttp://en.wikipedia.org/wiki/Online_marketinghttp://en.wikipedia.org/wiki/Online_transaction_processinghttp://en.wikipedia.org/wiki/Electronic_data_interchangehttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Extranethttp://en.wikipedia.org/wiki/E-mailhttp://en.wikipedia.org/wiki/E-bookhttp://en.wikipedia.org/wiki/Databasehttp://en.wikipedia.org/wiki/Catalogueshttp://en.wikipedia.org/wiki/Electronic_Data_Interchangehttp://en.wikipedia.org/wiki/Electronic_Funds_Transferhttp://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Invoice8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
12/61
were also forms of e-commerce (Grooves et al, 1997). However, from the 1990s
onwards, this would include enterprise resource planning systems (ERP) and data
warehousing.
In the "dot.com" era, it came to include activities more precisely termed "Webcommerce" -- the purchase of goods and services over the World Wide Web via secure
servers (note HTTPS, a special server protocol which encrypts confidential ordering
data for customer protection) with e-shopping carts and with electronic payment
services, like credit card payment authorizations.
Today, it encompasses a very wide range of business activities and processes, from e-
banking to offshore manufacturing to e-logistics. The ever growing dependence of
modern industries on electronically enabled business processes gave impetus to the
growth and development of supporting systems.
Although a large number of "pure e-commerce" companies disappeared during the dot-
com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such
companies had identified valuable niche markets and began to add ecommerce
capabilities to their web sites. For example, after the collapse of online grocerWebvan,
two traditional supermarket chains, Albertsons and Safeway, both started ecommerce
subsidiaries through which consumers could order groceries online. This resulted in a
significant increase of the market share for the supermarkets. In line with the above
purchase of groceries, the researcher is going to apply a litmus test of the same on
PBC and see whether all banking transactions can be done via e commerce. This will
allow clients to log on to PBCs website from anywhere in the world and be able to
transact.
The evolution of e-commerce in the early 2000s onwards saw multinational (MNCs) ortransnational (TNCs) companies establishing regional shared services centers, regional
data centers and regional call centers. Today, this is not only a crucial part of a
company's long-term corporate strategy in cost containment, but also in maintaining
and winning market share in a borderless, global marketplace. The application of such
e commerce solutions should be able to increase trade volumes at PBC since it will
be able to attract investors from any where in the country and even beyond the
borders.
12
http://en.wikipedia.org/wiki/Enterprise_resource_planninghttp://en.wikipedia.org/wiki/Data_warehousinghttp://en.wikipedia.org/wiki/Data_warehousinghttp://en.wikipedia.org/wiki/World_Wide_Webhttp://en.wikipedia.org/wiki/HTTPShttp://en.wikipedia.org/wiki/Protocol_(computing)http://en.wikipedia.org/wiki/Encryptionhttp://en.wikipedia.org/wiki/E-shopping_carthttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Dot-comhttp://en.wikipedia.org/wiki/Dot-comhttp://en.wikipedia.org/wiki/Webvanhttp://en.wikipedia.org/wiki/Albertsonshttp://en.wikipedia.org/wiki/Safewayhttp://en.wikipedia.org/wiki/Shared_serviceshttp://en.wikipedia.org/wiki/Data-centrehttp://en.wikipedia.org/wiki/Call_centershttp://en.wikipedia.org/wiki/Enterprise_resource_planninghttp://en.wikipedia.org/wiki/Data_warehousinghttp://en.wikipedia.org/wiki/Data_warehousinghttp://en.wikipedia.org/wiki/World_Wide_Webhttp://en.wikipedia.org/wiki/HTTPShttp://en.wikipedia.org/wiki/Protocol_(computing)http://en.wikipedia.org/wiki/Encryptionhttp://en.wikipedia.org/wiki/E-shopping_carthttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Dot-comhttp://en.wikipedia.org/wiki/Dot-comhttp://en.wikipedia.org/wiki/Webvanhttp://en.wikipedia.org/wiki/Albertsonshttp://en.wikipedia.org/wiki/Safewayhttp://en.wikipedia.org/wiki/Shared_serviceshttp://en.wikipedia.org/wiki/Data-centrehttp://en.wikipedia.org/wiki/Call_centers8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
13/61
BUSINESS-TO-BUSINESS E-COMMERCE
As the Zimbabwean economy becomes increasingly integrated into the global village,
the internet becomes more and more relevant and important as well. No business in
this world can achieve sustainable long term growth without the internet. The use of e
commerce can be used to get competitive prices. Many Zimbabweans nowadays utilize
the internet to search for business information as well as for transaction purposes.
Online advertising, marketing and selling is now a common business practice of today,
tomorrow and beyond. Most investors in this age especially in foreign markets prefer to
buy goods and services in the comfort of their offices using their banks and credit
cards. This will create less hustle for both the buyers and the sellers as funds and
securities will directly move from one account to the other electronically.
Business-to-Business refers to a broad range of intercompany transactions, including
wholesale trade as well as company purchases of services, resources, technology,
manufactured parts and components, and capital equipment. May (2000) argues that
B2B also includes many types of financial transactions between companies, such as
reinsurance, commercial credit and electronic networks for trading bonds, securities
and other financial assets. He adds that B2B transactions exclude those involving
households, such as retail sales, inter-consumer exchange, and employment.
Companies in B2B e-commerce offer innovative economic transactions. Daniel (2006)
contends that acting as intermediaries, many B2B companies propose to design
innovative transactions between a company and its many suppliers; that is, they
reorganize supply chains.
For example, some B2B companies provide centralized online auctions. Emcmillan(2004) put forward that centralized markets create efficiencies by reducing search
costs, allowing buyers and sellers to meet each other through the central exchange.
Bahra (2001) argues that when there are many buyers and sellers, centralized markets
also can reduce time costs by replacing bilateral negotiation with formal bidding
mechanisms and information about transaction prices. Moreover, by partially
supplanting the procurement function of buyers and the sales function of suppliers, B2B
intermediaries affect company decisions about procurement and intra- firm transfers of
goods and services. Cotton (2002) notes that companies may choose to rely more on
outside intermediaries for procurement and sales activities, and less on internal
13
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
14/61
purchasing and sales personnel. Procter (1998) adds that B2B e-commerce is directed
toward alleviating transaction inefficiencies in the supply chain.
Companies in manufacturing, mining, construction, transportation, public utilities, and
other sectors all buy from and sell to other firms. There is substantial intercompany
exchange in the financial sector as well, in such areas as securities trading, investment
banking and reinsurance (UNCTAD, 2004). Bodnar and Hopwood (1998) assert that
such transactions consume substantial efforts involving marketing and sales,
purchasing, financing, technology procurement, and accounting. Ecommerce
promises to reduce the costs of inter-business transactions by automating many
individual steps in the procurement process.
Traditionally, inter-business transactions begin with a company evaluating the input
purchasing required to carry out its business strategies or a supplier seeking buyers for
its goods and services (Sarmento, 2000). Next buyers search for suppliers (and vice
versa), through advertising, trade shows, brokers, and dealers. Buyers then negotiate
with potential sellers concerning product specifications and prices, and perhaps
conclude a spot transaction or form a long-term contract. After the agreement has been
reached, the transaction itself still involves ordering, billing, arrangements for
transportation, confirmation of payments, and acceptance of delivery.
Norris (2001) put forward that ecommerce innovations aim to reduce the cost of
procurement before, during and after the transaction. Before the transaction, Internet
technology may lower the cost of searching for suppliers or buyers and making price
and product comparisons. Alf Sherk, the founder of e-Chemicals, claims that When
youre dealing with one or two drum quantities, the cost of comparison shopping can bemore than the value of the product (Jones, 1999). According to Bahra (2001)
intermediaries reduce search costs by consolidating markets, providing an assortment
of goods and services that gives buyers the cost efficiency of one-stop shopping. He
adds that online intermediaries further lower search costs by providing information.
Vuksic and Strugar (2001) are for the view that by merely providing a comprehensive
list of potential suppliers of a specialized product, the intermediary can significantly
reduce search costs for a buyer. Laudon and Laudon (1998) add that costs can be
reduced by providing catalogues of product information from different suppliers,
enabling easy product comparisons, rather than requiring the buyer to use up costly
14
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
15/61
time to contact the suppliers for the information. Norris (2001) also adds that
intermediaries can provide price information for each product. The intermediary may
even provide dynamic pricing mechanisms, such as auctions or automated negotiation
rules, which cause prices to respond quickly to variations in demand and supply.
Furthermore, Alexander (2000) argues that B2B e-commerce attempts to create
markets that will replace intra-firm transfers of goods and services. He adds that
vertically integrated firms engage in substantial internal sales and procurement
activities. Groves et al (1997) note that B2B e-commerce can enable outsourcing of the
management of these external and internal transactions; that is, specialized
intermediaries may handle many of these transactions. For companies that purchase
externally, these intermediaries would substitute for many of the activities of company
purchasing departments. May (2000) adds that vertically integrated companies might
reorganize to outsource production of goods and services that were previously
produced internally, and again rely on intermediaries to help with procurement. The end
result would be a fundamental change in the way that businesses transact with each
other as well as the way in which businesses are organized.
Erber et al (2001) contend that such innovations in economic transactions depend on
advances in computer networking technology that significantly reduce the costs of data
communication. The Internet and its associated hardware and software technologies
can lower the costs of communicating data, both data transmission between companies
and within organizations (Intel, 2004). Kessler (2003) assert that although advances in
computer networking technology provide the impetus, advances in Internet commerce
depend on innovations in the way that transactions are organized. Lowering transaction
costs often entails the design of novel types of transactions. For example, the oilcompanies BPAmoco, Royal Dutch/Shell Group and Totalfina Elf Group along with
financial services companies Deutsche Bank, Goldman Sachs, Morgan Stanley Dean
Witter and Societ Generale have announced a new electronic marketplace for over-
the-counter energy, metal, and other commodities called the Intercontinental
Exchange, that will replace transactions that were largely conducted by telephone
(Shmukler, 2000). The Intercontinental Exchange market will have various novel
features including the provision of information to traders regarding their counterparties,
such as their credit worthiness, and information regarding market aggregates (Market
News Publishing, 2000).
15
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
16/61
Internet commerce offers many of the benefits of electronic data interchange (EDI)
without its high costs. Like EDI, Internet commerce offers the benefits of speed and
accuracy (Intel, 2005). Ben (2006) adds that by linking their computers, companies can
communicate without the costs of translating computer files into paper documents, a
process that involves errors, delay and costly clerical personnel. EDI provided these
benefits years ago for some companies, but costs were relatively high because EDI
involves proprietary software and point-to-point communications (Alexander, 2000).
Cotton (2002) argues that internet technology typically involves open standards on a
global network. In order to add a new supplier to their EDI purchasing system, for
example, a firm would have to establish a new network link with that supplier, and have
new software installed on that suppliers computer systems. Shapiro and Varian (1999)
argue that internet-based electronic purchasing connections can be much less costly to
set up, since they involve hardware connections that the company is probably already
using for other purposes, and can likely be established using off-the-shelf software
rather than customized proprietary solutions.
Bach and Erber (2001) put forward that after the transaction, electronic commerce may
allow companies to communicate at very little cost to confirm delivery and to monitor
contractual performance. In addition, companies will more readily be able to use the
information generated by the transaction to update their inventory and accounting
records. Seybold (2000) put forward that companies can automatically link their
transactions to software used for supply chain management, enterprise resource
planning, and final customer sales. A key technology expected to facilitate B2B e-
commerce is the application of Extensible Markup Language (XML). The language is a
refinement of the Standard Generalized Markup Language (SGML), which is alanguage used to define languages. The XML language allows documents to be treated
as data, so that computers can exchange data more effectively, thus aiding the
automation of data exchange between companies. Standardized XML data-description
tags are being developed for different market applications, in order to capture the
types of data that are most important in each market (sizes, prices, material grades,
colours, delivery methods, etc.). If the standards are generally adopted, this will help
manufacturers, suppliers and distributors to exchange commercial information without
creating customized formats for each partner (Mitchell, 1999).
16
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
17/61
Hypertext Markup Language (HTML) speeded the development of Internet web sites by
establishing a standard format for documents that allows users to use a standard
browser to view styled text, graphics, and hyperlinks to other Web pages. The XML
standard promises similar advantages for exchange of information between
businesses, including data on sales, inventory, production, payments and
transportation. Using XML, a person can receive and analyze data obtained on the
Internet without the need to go back to the host server on which the data is stored, thus
vastly speeding up communication and making more efficient use of scarce server
capacity and reducing Internet traffic. For example, a user can obtain information from
a travel agency about flights on a given day and then compare airfares and itineraries
without relying on data processing by the travel agencys server (Bosak and Bray,
1999). Because of its flexibility, XML should allow each industry to establish simple
standards for the exchange of data and the execution of commercial transactions.
2.3 BANKING CONSUMER OPTIONS
Bahra 2001 defined three types of business models that are available to the consumer:
Brick and mortar institution- financial institution that has a building and personalservice representatives but does not offer internet banking services.
Brick and click- financial institution that has a physical structure and also offers
internet banking services
Virtual bank-financial institution that has no public building and exists only
online.
2.4 TYPES OF ONLINE BANKING
Internet banking- Conducted through a personal computer that connects to a
banking website via the internet. Internet banking can also be conducted via
wireless technology through either Personal Digital Assistants (PDAs) or cellular
phones.
Electronic Banking is conducted by using Automatic Teller Machines (ATMs),
telephones (not via the internet) or debit cards
Advantages of using Online Banking to the clients:
17
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
18/61
Convenience- save on time and transport costs to the bank
24 hours by 7 days access to the bank
Secure electronic transactions
Instant credit/ payments
Quicker and easier reconciliations
Saving on transit and cash handling fees
Reduced staff embezzlement and fraud
Advantages of using Online Banking to the banks
Less queues
Reduced stationary costs
No need to have huge amounts of cash in vaults as most transactions are
electronic
Reduced pressure on the bank personnel
Profitability increases
Increased distribution because of the virtual nature of the channels
Strengthens the brand
Advantages of using Online Banking to the economy
Reduced costs associated with note printing
Cheque frauds reduced
Improves clearing systems
General lifestyle improves because of the better convenience brought by
electronic banking.
Disadvantages of electronic payment channels
The disadvantages of eBanking mainly relate to security threats, abuse of resources,
technology complexity, cost challenges, legal issues and cost incurring disadvantages.
18
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
19/61
It is imperative that banks adequately address these disadvantages if they are to reap
the benefits from e commerce.
Security Challenges
Document processing using computers is amenable to abuse.
Cost incurring disadvantages
Ecommunication investments require huge initial costs for a secure network
and sophisticated hardware and software.
Legal issues
Legal issues pose a major constraint to conducting ecommunication on the
internet.
2.5 GLOBAL EMPIRICAL RESEARCH ON E COMMUNICATION
Banks are realising that in order to fully exploit the capabilities of the internet, they must
reshape their strategies and deliver products in a more innovative manner in terms of
product variety and lower prices. (Grooves, Biemer, Lyberg, Massey, Nichloas and
Hagel 111 1997). It is possible to conduct on line, all traditional features of banking,
due to the product oriented nature of banking. Flexibility of online banking resulted in
nearly 30% of savings for consumers. This was the motive that justified the embracing
of the internet by Wells Fargo Bank (Laudon and Laudon 1998).
According to Sarmento, (2000) if banks can provide what customers want and not be
hampered by the legacy of complex internal structures, they will have a chance for
survival and growth through the internet. Over the past few years, the internet has had
a magnificent effect on financial services because it offers an unprecedented degree of
information efficacy.
It is estimated that in the United States, only 500 000 households invested online in
1996. (Forrester Research). By 2001, the number of households that conducted on-line
financial transactions and grown to about 3.3 million. (Vuksic & Strugar 2001). Today,
roughly 4.5 million households use internet banking and or bill payment at least once a
month, and that number is expected to increase 53.5 million , nearly 40% of all
households by 2008.
19
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
20/61
Given the wealth of opportunities the internet creates for financial services companies
and the accelerated pace with which banks are going online, having an internet
presence will become a strategic necessity for most banks, thrifts and other financial
institutions. From 1977 to 1988, Citibank, an early adopter of ATM technology,
increased its market share in New York City from 4% to 13.4%. ATMs were a
substantial driver of this impressive growth. Indeed in its early stages, the ATM was a
source of strategic differentiation for Citibank and other early adopters, but as
technology was deployed more widely, the source of value associated with the ATM
shifted. No longer does ATM differentiate a bank, it is now expected by consumers as a
basic service offering. ATMs have migrated from a differentiator to a strategic necessity
and so will internet banking.
For most banks, the future of the internet lies in how well it can be integrated with more
traditional delivery channels. But in the end, profitability will depend primarily on the
quality of the products and services that banks deliver to customers, not necessarily on
how those products are delivered. (Cotton 2000). More recently, banks have
augmented their distribution networks with transactional web sites, which allow
customers to open accounts, apply for loans, check balances, transfer funds and make
and receive payments online.
Despite the many factors inhibiting the growth of e commerce in Africa, and minimal
progress in appropriate legislation, commercial concerns in several African countries
are actively pursuing e commerce ventures, albeit on a small scale. Two rather
imperfect measures of e commerce activities are the extent of internet and web
based activity in a country. Table 1 below shows a breakdown for SADC countries in
terms of internet subscribers per country and the international bandwidth used.
Table1 Overview of internet usage and international bandwidth for SouthernAfrican Countries (Jensen, 2001)
Country Dialup Number International International
20
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
21/61
Internet
Subs Total
#
ISPs Bandwidth
Kbps
Hubs #
Total 892,850 132 793,634 32
South Africa 750,000 75 750,050 5Total Excluding
SA
142,850 57 43,634 27
Mauritius 35,000 1 4,096 1
Botswana 25,000 6 14,000 1
Zimbabwe 20,000 8 5,120 1
Tanzania 20,000 14 4,096 3
Namibia 15,000 3 3,072 2
Zambia 6,500 3 3,072 3
Mozambique 6,000 5 2,048 3
D.R.Congo 4,500 5 2,048 3Angola 4,000 4 192 1
Malawi 2,400 2 1,024 3
Seychelles 3,000 2 4,098 2
Swaziland 1,200 2 256 2
In several respects South Africa is unique in Africa as regards e commerce.
Accordingly it is dealt with separately. In the SADC region (excluding South Africa) the
overall volume of e business is very small and growing at a slower rate than world e
business. For several well known reasons, South Africas e commerce characteristics
straddle the line between developed and developing countries. The South African
market is leveraged by its superior technical, social and capital infrastructure.
It has been noticed that during the last few years, African governments started lifting
barriers to competition in the whole continent. Africas international internet bandwidth
will grow tenfold in the next five years, mostly driven by the demand for data services.
(Pyramid 2004)
2.6 SUCCESS FACTORS IN E-COMMERCE
Ben (2006) put forward that an e-commerce company will survive not only based on its
product, but by having a competent management team, good post-sales services, well-
organized business structure, network infrastructure and a secured, well-designed
website. Such factors include:
21
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
22/61
A good management team armed with good and sound information technology
strategy. A company's IT strategy should be a part of the business re-design
process.
Providing an easy and secured way for customers to effect transactions. Creditcards are the most popular means of sending payments on the internet,
accounting for 90% of online purchases. In the past, card numbers were
transferred securely between the customer and merchant through independent
payment gateways. Such independent payment gateways are still used by most
small and home businesses. Most merchants today process credit card
transactions on site through arrangements made with commercial banks or
credit cards companies.
Providing reliability and security. Parallel servers, hardware redundancy, fail-
safe technology, information encryption, and firewalls can enhance this
requirement.
Providing a 360-degree view of the customer relationship, defined as ensuring
that all employees, suppliers, and partners have a complete view, and the same
view, of the customer. However, customers may not appreciate the big brother
experience.
Constructing a commercially sound business model. If this key success factor
had appeared in textbooks in 2000, many of the dot-coms might not have gone
into bankruptcy.
Engineering an electronic value chain in which one focuses on a "limited"
number of core competencies -- the opposite of a one-stop shop. (Electronic
stores can appear either specialist or generalist if properly programmed.)
Operating on or near the cutting edge of technology and staying there as
technology changes (but remembering that the fundamentals of commerce
remain indifferent to technology).
Setting up an organization of sufficient alertness and agility to respond quickly to
any changes in the economic, social and physical environment.
22
http://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Payment_gatewayhttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/Parallel_computinghttp://en.wikipedia.org/wiki/Hardwarehttp://en.wikipedia.org/wiki/Redundancy_(engineering)http://en.wikipedia.org/wiki/Fail_safehttp://en.wikipedia.org/wiki/Fail_safehttp://en.wikipedia.org/wiki/Technologyhttp://en.wikipedia.org/wiki/Encryptionhttp://en.wikipedia.org/wiki/Firewall_(networking)http://en.wikipedia.org/wiki/Authoritarianismhttp://en.wikipedia.org/wiki/Business_modelhttp://en.wikipedia.org/wiki/Dot-comhttp://en.wikipedia.org/wiki/Value_chainhttp://en.wikipedia.org/wiki/Core_competencyhttp://en.wikipedia.org/wiki/Cutting_edgehttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Payment_gatewayhttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/Parallel_computinghttp://en.wikipedia.org/wiki/Hardwarehttp://en.wikipedia.org/wiki/Redundancy_(engineering)http://en.wikipedia.org/wiki/Fail_safehttp://en.wikipedia.org/wiki/Fail_safehttp://en.wikipedia.org/wiki/Technologyhttp://en.wikipedia.org/wiki/Encryptionhttp://en.wikipedia.org/wiki/Firewall_(networking)http://en.wikipedia.org/wiki/Authoritarianismhttp://en.wikipedia.org/wiki/Business_modelhttp://en.wikipedia.org/wiki/Dot-comhttp://en.wikipedia.org/wiki/Value_chainhttp://en.wikipedia.org/wiki/Core_competencyhttp://en.wikipedia.org/wiki/Cutting_edge8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
23/61
Providing an attractive website. The tasteful use of colour, graphics, animation,
photographs, fonts, and white-space percentage may aid success in this
respect.
Streamlining business processes, possibly through re-engineering andinformation technologies.
Providing complete understanding of the products or services offered, which not
only includes complete product information, but also sound advisors and
selectors.
May (2000) asserts that naturally, the e-commerce vendor must also perform such
mundane tasks as being truthful about its product and its availability, shipping reliably,and handling complaints promptly and effectively. Bhasin (2003) put forward that a
unique property of the internet environment is that individual customers have access to
far more information about the seller than they would find in a brick-and-mortar
situation.
Erber et al (2001) note that a successful e-commerce organization must also provide
an enjoyable and rewarding experience to its customers. They add that many factors
go into making this possible. Such factors include:
Providing value to customers. Vendors can achieve this by offering a product or
product-line that attracts potential customers at a competitive price, as in non-
electronic commerce.
Providing service and performance. Offering a responsive, user-friendly
purchasing experience, just like a flesh-and-blood retailer, may go some way to
achieving these goals.
Providing an incentive for customers to buy and to return. Sales promotions to
this end can involve coupons, special offers, and discounts. Cross-linked
websites and advertising affiliate programs can also help.
Providing personal attention. Personalized web sites, purchase suggestions, and
personalized special offers may go some of the way to substituting for the face-
to-face human interaction found at a traditional point of sale.
23
http://en.wikipedia.org/wiki/Business_processhttp://en.wikipedia.org/wiki/Reengineeringhttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Discounts_and_allowanceshttp://en.wikipedia.org/wiki/Affiliate_marketinghttp://en.wikipedia.org/wiki/Point_of_salehttp://en.wikipedia.org/wiki/Business_processhttp://en.wikipedia.org/wiki/Reengineeringhttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Discounts_and_allowanceshttp://en.wikipedia.org/wiki/Affiliate_marketinghttp://en.wikipedia.org/wiki/Point_of_sale8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
24/61
Providing a sense of community. Chat rooms, discussion boards, soliciting
customer input and loyalty programs (sometimes called affinity programs) can
help in this respect.
Owning the customer's total experience. E-tailers foster this by treating anycontacts with a customer as part of a total experience, an experience that
becomes synonymous with the brand.
Letting customers help themselves. Provision of a self-serve site, easy to use
without assistance, can help in this respect. This implies that all product
information is available, cross-sell information, advise for product alternatives,
and supplies & accessory selectors.
Helping customers do their job of consuming. E-tailers and online shopping
directories can provide such help through ample comparative information and
good search facilities. Provision of component information and safety-and-health
comments may assist e-tailers to define the customers' job.
2.7 GETTING THE BUSINESS ON THE WEB
There are three steps to analyze when looking at the creation of an online business:Consideration, Implementation, and Finalization.
Consideration
How does a business know whether they should engage in such a practice?
Despite the obvious advantages to e-commerce, it does not always meet the long
term needs of a company (Groves et al, 1997). Alexander (2000) notes that if the
market for the product or service is quite small, then there is no need to engage ine-commerce as it will be less difficult to gain competitive advantage and would only
result in unnecessary costs and expenses. May (2000) put forward that if the
company wishes to remain domestic and not expand its services, then a company
would be better suited to follow the normal processes of advertising than
participating in e-commerce. Seybold (2001) notes that a company must consider
whether the business would even succeed or thrive in the e-commerce
environment. For example, selling food online would not be a viable venture, as the
ultimate costs (wastage, storage, transportation) would outweigh the benefits.
24
http://en.wikipedia.org/wiki/Chat_roomhttp://en.wikipedia.org/wiki/Internet_forumhttp://en.wikipedia.org/wiki/Loyalty_programhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Product_informationhttp://en.wikipedia.org/wiki/Product_informationhttp://en.wikipedia.org/wiki/Consumerismhttp://en.wikipedia.org/wiki/E-tailerhttp://en.wikipedia.org/wiki/Online_shopping_directorieshttp://en.wikipedia.org/wiki/Online_shopping_directorieshttp://en.wikipedia.org/wiki/Search_enginehttp://en.wikipedia.org/wiki/Chat_roomhttp://en.wikipedia.org/wiki/Internet_forumhttp://en.wikipedia.org/wiki/Loyalty_programhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Product_informationhttp://en.wikipedia.org/wiki/Product_informationhttp://en.wikipedia.org/wiki/Consumerismhttp://en.wikipedia.org/wiki/E-tailerhttp://en.wikipedia.org/wiki/Online_shopping_directorieshttp://en.wikipedia.org/wiki/Online_shopping_directorieshttp://en.wikipedia.org/wiki/Search_engine8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
25/61
However, Cotton (2002) argues that if a company believes that their product has
great market potential outside of their domestic realm, and feel that they can
participate in e-commerce, then some time must be taken to lay down the floor plan
for the business. Some aspects to consider are:
i. What is the idea for the business?
ii. Is it a product or service?
iii. What is the name of it?
iv. Will you emphasise price, quality, service, or another point?
v. What is the target market?
Implementation
The key to successfully starting and creating an online business is choosing the
right Web host (Intel, 2005). Try to find one that offers guarantees, is flexible,
responds to your concerns, and quite simply is one that offers the services that you
want and need. Once the firm has found the right Web host and created an
account, the next step is start building the firms site. Daniel (2006) put forward that
having an attractive yet simple site will have a great impact. Ensure that it projects
the right image and is directed to the right target market for your product. It should
be easy to navigate and have a solid search option. Also clarify what sorts of
policies you will implement, such as return policies, acceptance or rejection of
credit cards, check-out, and any other payment options such as cheques or money
orders.
If selling products, there are many types of software out there to help you create aneffective and efficient ordering system. Look at the features that you will need for
your site and compare them to the software that is available.
Finalization
Now that the firm has created the website and is ready to begin, the next important
step is to market your online business (Intel, 2005). The options are numerous and
can include:
i. Join a search engine and pay a fee for placement
25
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
26/61
ii. Contract with affiliate sites and programs
iii. Advertise
iv. Virally market
v. Use promotions
A key step is developing some sort of PR strategy. Cotton (2002) put forward that
customers are the most important aspect of the business. Make them happy. This can
include offering links on your site to answer Frequently Asked Questions (FAQs),
shipping quickly, designing a system for easy returns, as well as any other type of
customer service ( Norris, 2001).
Ben (2006) asserts that it is also important to constantly change and maintain the
freshness of the organisations site. This includes altering colors and creating new
displays. Daniel (2006) adds that another noteworthy option is to include some sort of
statistical counter so as to find out where the customers are logging in from and what
they doing on the site. Test any advertisements that you create to see how effective
they are.
26
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
27/61
CHAPTER 3 METHODOLOGY
3.1 INTRODUCTION
Research methodology is the philosophical basis on which research is founded,
White B (1998). It basically looks at the research design, units of analysis, data
collection instruments, the population and sample of interest.
3.2 RESEARCH PHILOSPHY
Based on the positivism philosophy, the research will take both qualitative and
quantitative approaches in order to provide an in-depth analysis of the data. Research
paradigms incorporate the fundamental philosophical concepts and values about the
nature of reality and the scientific pursuit of knowledge. Essentially, two schools of
thought about the research process dominate the literature: positivism (quantitative)
and phenomenological (qualitative) research. They hold diametrically different views
about the way in which knowledge is developed and judged as being acceptable.
Taking into consideration the strengths and weaknesses that flow from purely
positivism and phenomenological bias in research, the researcher will adopt a mixed
approach that draws from both extremes, but, with a heavy inclination towards the
latter. This approach is considered to be adequate as it enables the researcher to
increase the reliability and validity of the findings because weaknesses of one method
are balanced by the strengths of the other method.
POSITIVISM RESEARCH
Positivist research is generally quantitative and involves the use of numerical
measurement and statistical analysis of measurement to examine phenomena. It
views reality as consisting phenomena that can be observed and measured (Remenyi
et al, 1998:32) thus assuming that the researcher is independent of and neither affects
nor is affected by the subject of the research (Chill and Johnson, 1997). The
advantages of this quantitative approach are that it places great premium on objectivity
and reliability of findings and encourages replication. Applied to social sciences and
business management research, positivism may not always be appropriate, as all
27
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
28/61
social phenomena cannot be accurately and reliably measured, thus reducing the
validity of the findings.
PHENOMENOLOGICAL RESEARCH
In contrast, phenomenological or qualitative researchers argue that the world is socially
constructed and that science is driven by human interests and that the researcher, as a
subjective entity, is part of the world he or she is observing. Total objectivity, is
therefore an impossible aim. The advantages of this qualitative, interpretive orientation
in research are that the findings often have greater validity and less artificiality as the
process of observing phenomena in natural, real-life settings often allows researchers
to develop a more accurate understanding of those phenomena.
Good qualitative research often reveals depth of understanding and richness of detail.
Research driven by phenomenological philosophy is sometimes undermined by the
subjectivity of the researcher and the poor reliability of the findings in that, two
researchers may arrive at different conclusions based on their observations of the
same phenomena at the same time (Saunders et al2003:84).
3.3 RESEARCH DESIGN
A research design is a plan and structure of investigation so conceived to obtain an
answer to a research problem, Jones A.R (1996). In this study, the researcher will
use the descriptive survey approach combined with case studies in order to elicit as
much information as possible from the respondents. A case study uses multiple
sources of evidence, Johnson (1994), and this has the advantage of exposing the
researcher to a wide range of views on the subject matter being investigated.
www.statpac.com/surveys/sampling.htm. (17 November 2006: 11.05 a.m.) states that
whatever the research question(s) and objectives, there will be need to collect data to
answer them. The website further advises that it is incumbent on the researcher to
clearly define the target population to which the objectives of the study are addressed.
For the purpose of this study, the researcher will identify two major groups of people
that have both direct and indirect influences on the operations of PBC.
The first group is composed of people or individuals who work from within the
organization and are mandated with policy formulation and implementation. This group
28
http://www.statpac.com/surveys/sampling.htm.http://www.statpac.com/surveys/sampling.htm.8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
29/61
of influencers include chief executive officer and line management, operating core staff
as well as supporting staff.
On the other hand, the second group will comprise of the banks clients and also
corporates who do not currently hold accounts with PBC.
3.4 SAMPLING
Samples will be drawn from various levels of employees in the participating
organisations using the stratified sampling method. A sample is a proportion of the
population that is representative, Babie (1989). The stratified sampling method was
used to ensure that all sections of the population were represented in the samples
that were drawn in order to have a representative balance of views. Stratified
sampling uses natural divisions of a sample frame such as sex, age, income group,or occupation and this ensures adequate representation of the population.
Sampling Techniques
For some research questions, it is possible to survey an entire population as it would
be of a manageable size. However, for many research questions and objectives, it will
be impossible to either collect or to analyse all the data available owing to restrictions
of time, money and often accessibility. In order to overcome these challenges, the
researcher will employ sampling techniques. Sampling techniques provide a range of
methods that enable one to reduce the amount of data to collect by considering only
data from a subgroup rather than all possible cases or elements. Sampling is therefore
likely to be less expensive, saves time, have manageable data and produce equally or
more accurate results than a population (Henry 1990). Sampling techniques can be
divided into two groups namely; probability and non-probability sampling.
Probability Sampling
Probability sampling is based on the concept of random selection a selection
procedure that ensures that each element of the population is given a known chance of
selection and is usually equal for all cases. Five main cases can be used to select a
probability sample and these are simple random sampling, systematic sampling,
stratified random sampling, cluster sampling and multistage sampling.
29
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
30/61
This technique is most commonly associated with surveybased research (Sanders et
al, 2005) where there is need to make statistical inferences from the sample about the
population. With probability sampling, researcher bias and subjectivity is reduced or
eliminated through the random selection of elements. Although it provides the
researcher with a powerful statistical analytical tool, probability sampling is rather costly
and time consuming.
Non-Probability Sampling
In contrast, non-probability sampling is non random, subjective and purposive in that
the research may select the sample using deliberate and consciously controlled criteria
other than those associated with randomness of selection. Since the probability of
each element being selected from the population is not known, it is almost impossible
to address objectives or questions that require statistical inferences about the
characteristics of the population. For this reason, non-probability sampling is more
frequently used for exploratoryqualitative studies such as case study research.
Cost and time variables may also influence the choice of non-probability sampling as
probability sampling requires careful planning and comprehensive effort in electing the
population and establishing the sampling frame. Non-probability is also more flexible
as it allows the researcher to capture a wider range of important facets than the
probability sampling. Despite its simplicity, the fact that it allows researcher bias and
subjectivity to affect sampling procedures, the research findings are subject to
distortions. As with probability sampling, non-probability sampling is divided into five
main categories, namely; convenience judgement or purposive, quota, maximum
variation and snowball sampling.
Sampling method used
In view of the research objectives and the pros and cons of the probability and non-
probability sampling techniques, the researcher will use non-probability sampling due to
its flexibility in selecting the sample. A quota sampling technique will be used to
identify target groups of respondents who are in a position to provide necessary and
30
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
31/61
informed opinions which would assist in testing the hypothesis as stated in Section 1.8
above.
According to Saunders et al(2005), quota sampling may be an appropriate choice toimprove the representativeness of the study if the population is divided proportionately
into predetermined categories and the elements in each category are deliberately
selected from the population until a particular quota has been met for each category.
Saunders et al (2005) went further by stating that the quota sampling requires two
basic conditions first, the categories should have a distribution in the population that
can be estimated and, secondly, the variable used in forming each category should be
pertinent to the topic of study.
In this respect, the researcher first identified the categories and their proportions as
they are represented in the population. To reinforce the quota sampling method, a
judgemental sampling method was also incorporated in order to identify or choose
relevant elements and or respondents from each category to the issues being studied.
This method was considered to be appropriate because samples or elements were
chosen deliberately as they were considered to be representative of the population on
the basis of the samples knowledge of the companys business fundamentals.
Sample Size
The size of the sample is almost always a compromise between the accuracy
(confidence) of the findings and the amount of time and money needed in the
collection, checking and data analysis. Given these competing influences, it is not
surprising that the final sample size is almost a matter of judgement as well as of
calculation (Saunders et al, 2005). Any research must, however, be guided by the fact
that a sample that is too small is not likely to be representative of the population, while
one that is too large is likely to increase costs and time demands without producing
significant benefits. Bell J. (1999) submitted that statistically, a minimum sample of 30
is held by many researchers to be acceptable.
31
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
32/61
Cognisant of this advice, the researcher considered that a proportion of one third (1/3)
from each of the population categories as defined above, giving a total sample of 70
would suffice for purposes of this study. The sample (refer to table 2) would be
representative to meet the requirements of this enquiry since it is the quality, rather
than the quantity of the sample that is the researchers prime concern. The quality of
the sample is important as valuable lessons can be drawn from it and be applied
successfully to the economy at large.
Table 2 Sample size
Category Sample Size
PBC Clients 40
PBC staff 20
Listed corporates but non clients 10
TOTAL 70
Research Instruments
Research instruments are the tools used for gathering data for research. Using
more than one method of collecting data is often a prudent procedure. In this light
the researcher will use questionnaires and personal interviews.
The researcher will engage various groups of employees in interviews during lunch
breaks in order to complement questionnaires so that some of the shortcomings of
questionnaires could be addressed.
3.5 DATA COLLECTION
In almost all studies, a researcher has two main sources of data, namely, primary and
secondary data sources. However, there are several data collection methods available
to the researcher and these include, survey, experiment and ethnography. Some of
these clearly belong to the deductive tradition, others to the inductive approach.Allocating these data collection strategies to one tradition or the other is unduly
32
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
33/61
simplistic because these strategies are not mutually exclusive to each other (Bell
1999:78). With this in mind and the need to answer the research objectives, the
researcher will use both primary and secondary data.
Primary Data
Primary data will be mainly collected through a survey method directed at stakeholder
groups considered to be in a position to give relevant informed opinions e commerce
in the banking environment. The survey method is considered to be appropriate
because it allows for the collection of a large amount of data from a sizeable population
in a highly economical way. The survey method is also flexible and adaptable, thus it
gives the researcher more control over the research process.
In order to collect relevant, reliable and adequate primary data, the researcher will use
the self administered questionnaire and the interviewer administered method.
Self Administered Questionnaire
A common place for observing data beyond the physical reach of the observer is
the questionnaire, Leedy (1980). The researcher will employ the questionnaire
method of collecting data, which is a set of written questions that are either mailed
to the individual or simply handed out.
The questionnaire will be divided into three sections. Section A will solicit information
on demographic data for the respondents, as it is always important to know such
information as age and gender of the respondents. Section B will seek to obtain data
through the use of close-ended questions, which, according to Bouma and Atkinson,
(1999), are questions that force the respondent to select a single response from a list.
Section C is meant to collect data through open-ended questions designed in such a
way that the respondents were given room to express themselves in their own words.
The whole set of questions will enable comprehensive responses to be given to the
research to give a true picture on the subject researched on.
33
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
34/61
Self administered questionnaires are those which are completed by the respondents
without direct interference from the interviewer. Such questionnaires can be conducted
electronically through e-mail, through postal services, through the fax, or personally
hand delivered to each respondent and collected.
In this study, the researcher will use the self-administered questionnaire as the main
mode of primary data collection because of its flexibility to capture data from different
sets of people at no extra costs. A self-administered questionnaire also allows
respondents to work through the questionnaire at their own pace and any possible bias
brought to bear by the presence of an interviewer is avoided. Furthermore,
questionnaires provide uniform or standardized data, which is normally easy to process
and present. The main shortcoming of the questionnaire method is that respondents
would be trying to recreate their views and attitudes which they held at a past time.
People usually tend to forget some important facts and end up guessing in order to fill
the questionnaire.
To gain maximum synergy, the researcher will craft the questionnaire in such a way
that the questions individually and collectively provide the relevant information or data
required to successfully address the research objectives and questions. In this regard,
the questionnaire will have a range of question categories, each consisting of a small
number of related questions, intended to elicit information of a particular type relating to
the research topic. Due to the time factor and poor response rate associated with the
postal questionnaires, the researcher will resort to the personal hand delivery and
collection questionnaire as well as the online e-mail questionnaire.
Interviewer Administered Questionnaire
Responses to this type of instrument are recorded by the interviewer on the basis of
each respondents answers and these include telephone questionnaires and structured
interviews. The researcher will try to avoid telephone interviews because of the
complexity of the subject matter, the time taken and the relative costs involved.
Telephones would only be limited for constantly reminding respondents of the
impending deadlines.
34
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
35/61
Semi-structured interviews are also preferred to total structured interviews as the
researcher would want to gather more information or data by varying the order in which
questions are asked and by asking new questions in the context of the research limits.
The main advantages of using interviews are:
the high response rate they can elicit
getting in-depth and comprehensive information
assist the respondents who may have difficulty comprehending some questions
respondents appreciate the seriousness of the researchers commitment to the
study.
The face-to-face interviews will be limited to the management of PBC as they are the
core architectures and executors of the companys e commerce strategies.
Both close-ended and open-ended questions will be used to collect data where
appropriate. Close-ended questions are used to circumscribe the respondents
responses to questions that needed specific answers. This also helps to guard against
unnecessary digression by the respondents. In this respect, single-option responses,
multiple choice questions, rating questions and ranking questions were used. The
closed-ended questions also provided easy coding and data analysis. On the other
hand, open-ended questions were used for probing sensitive issues as respondents
are provided with enough space to write their responses.
Advantages of the questionnaire
As a data collection instrument, the questionnaire was preferred due to the following
considerations;
The cost of sending out questionnaires is relatively low and this is
considered to be appropriate given the current hyperinflationary
environment prevailing in Zimbabwe.
35
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
36/61
The approach allows time and space for respondents to think and
assimilate questions. Confidentiality is guaranteed through ensuring
anonymity.
The questionnaire allows for use of close-ended questions, which are
easy to administer and help keep the minds of the respondents
focused on the subject.
Questionnaires enable the researcher to cover a wider geographical
area,
However questionnaires have their own limitations, which include the following;
Questionnaires are suitable for respondents with some acceptable
degree of
literacy in order for them to understand them and respond accordingly.
This means that views of illiterate people cannot be captured using the
questionnaire method. However given the topic under study the
researcher is comfortable that there will be no illiterate respondents.
Some respondents may lose their questionnaires or simply
withhold them and the researcher would be required to redistributemore questionnaires to ensure a high response rate.
Questionnaires are inappropriate for complex issues that may
need further explanation to and from the respondents.
Completion of questionnaires can be delegated to other individuals
who may not necessarily be the prime target of the researcher.
However it is possible to minimize limitations of questionnaire method and theresearcher was always on guard in order to keep these limitations at minimum
levels. Using simple language and making items clear helps in reducing
limitations of questionnaires.
Personal Interviews
Interviewing involves verbal discussion with the target individual, White B
(1998). The researcher approached selected research subjects and asked
structured questions where spontaneous responses were obtained.
36
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
37/61
Interviewing individuals helps in addressing some of the shortcomings of the
questionnaire method, especially where illiterate respondents were involved.
The success of a personal interview depends on the integrity and skill of the
interviewer, Fred Carswell (1995). In this light the researcher had to be tactful
in order to keep the interview consistent with the objectives of the research.
Some of the identified advantages of the interview method include the
following;
Interviews have a high response rate compared to questionnaires
since a skilled interviewer can persuade all but the most reluctant to
answer the questions.
The interviewer can explain questions that the interviewer cannot
understand.
It enables the interviewer to verify the answers by making visual
checks of age and appearance, for example, through observation and
non-verbal communication.
Offers the potential of collecting more information than other
methods.
However personal interviews have their own limitations that the researcher has
to manage in order not to compromise the quality of the study and these include;
The interviewer may, even unknowingly, introduce bias through the way he
asks questions. A good example is asking leading questions.
Failure to control the interview process.
Due to the nature of the research, some people may be too embarrassed to
give personal information in an interview and might end up withholding important
information.
It may turn out to be a very expensive method especially where interviewees
are geographically dispersed.
In order to minimize limitations of the interview method, the researcher will use
good interpersonal skills coupled with her working experience, as a relationship
manager, to ensure that the identified limitations of the personal interview
method will not influence the outcome of the research.
37
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
38/61
3.6 DATA COLLECTION PROCEDURES
Various steps will be taken in administering research instruments and collecting
of data from the research subjects in this study. The researcher will use the
telephone, fax machine and the postal system in order to communicate with the
research subjects. For ease of collecting the completed questionnaires,
envelopes will be provided to the respondents so they will seal their responses
inside the envelopes and hand them over to the chosen representative. The
researcher will then get in touch with the representative to collect the responses
from a single point.
In order to ensure that the identified challenges will not interfere with the
research, the researcher will employ good time management and planning
techniques so that maximum use of time is achieved given the power cuts.
Ethical Considerations
In research, ethics are terms of a code of behaviour appropriate to academic
conduct, Babie (1989). Throughout the whole process of this study, from seeking
access to the organisations to data collection, analysis and reporting, ethical
considerations were observed. The following are some of the ethical issues
taken into account by the researcher in this study.
The confidentiality of data collected and the anonymity of participants will be
upheld by the researcher. Participants names and identification particulars will
neither be requested for nor documented. In the publication and analysis of
results, some information that could reveal confidential organisational aspects or
those issues perceived to have the potential to tarnish the image of the
organisations involved were left out.
Property Rights
The research will seek to avoid, at all costs, infringing on legal property rights.The researcher thus obtained permission to conduct the research and to have
access to other relevant information on PBC.
38
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
39/61
3.7 DATA PRESENTATION AND ANALYSIS PROCEDURES
The researcher will analyze the data collected using the SPSS method and
results will be presented using tables, charts and descriptive statistics. Chartsand tables aid in data presentations in that they have a visual impression and
enable the reporter to present complex data in a simple and comprehensive
way. Data will also be analyzed in percentages for ease of interpretation by
readers.
39
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
40/61
CHAPTER 4 RESEARCH FINDINGS AND DISCUSSION
4.1 INTRODUCTION
This chapter presents the research findings and discussion. These will be discussed in
relation to the literature of the study.
4.2 RESPONSE RATE
A total of 70 questionnaires were sent to the study respondents 65 were successfully
completed and returned representing a study response rate of 93%. The response rate
is high enough to warrant validity of the study findings.
4.3 LENGTH WITH ORGANISATION
Figure 1 Length in organisation
From the study findings most of the respondents (46 %) have 1-2 years with PBC, 45%
have 3-5 years, and 6 % have above 5 years, whereas an insignificant 3 % have less
than a year with PBC. Given that PBC established its entrance in the market in 2002, it
can be concluded that most of the respondents have been with the organisation for a
reasonably long time, hence are familiar with the processes at the organisation and
thus their contributions are of great value to the study.
40
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
41/61
4.4 UNDERSTANDING E-COMMERCE
Table 3 below shows how the respondents understood e-commerce.
Table 3 Understanding e-commerce
Response % of respondents
Facilitation of commercial transactions
electronically
62
Complete set of processes that support
commercial /business activities on a
network
59
Buying and selling of goods and service
over an electronic system
71
Using the internet to trade 69
Table 3 shows that the majority of the respondents (71%) held that e-commerce is the
buying and selling of goods and services over an electronic system, 69% believed that
it is the using of the internet to trade, 62 % were of the view that e-commerce is the
facilitation of commercial transactions electronically while only 59% held that it is a
complete set of processes that support commercial or business activities on a network.
Table 4 Understanding e-commerce
Response % of respondents
Facilitation of commercial transactions electronically 62
Complete set of process that support
commercial/business activities on a network 59Buying and selling of goods and service over an electronic
system 71
Using the internet to trade 69
Table 4 shows that majority of the respondents (71%) held that e-commerce is the
buying and selling of goods and services over an electronic system, 69% believed that
it is the using of the internet to trade, 62% were of the view that e-commerce is the
41
8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
42/61
facilitation of commercial transactions electronically while only 59% held that it is a
complete set of processes that support commercial or business activities on a network.
Kessler (2003) put forward that electronic commerce (also referred to as EC, e-
commerce or ecommerce) consists primarily of the distributing, buying, selling,
marketing, and servicing ofproducts orservices over electronic systems such as the
Internet and othercomputer networks. Seybold (2001) asserts that the 'electronic' or 'e'
in e-commerce or e-business refers to the technology/systems; the 'commerce' refers
to be traditional business models. According to Alexander (2000) e-commerce is
defined as the complete set of processes that support commercial/business activities
on a network. In the 1970s and 1980s, this would also have involved information
analysis. In light of the above the respondents may have an understanding of e-
commerce and entails that the respondents may have an understanding of the
concepts under study. Their contributions add value to the study findings.
Table 5 what respondents think e-commerce involves
Response % of respondents
Buying, selling, distribution, marketing and servicing of
products or services over electronic systems
59
Electronic funds transfer
63
Supply chain management
37
Electronic data collection
43
Electronic data interchange
67
The study findings show that most of the respondents (67%) held a perception that e-
commerce involves electronic data interchange, 59% said it involves buying, selling,
42
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Computer_networkhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Computer_network8/6/2019 Dessert at Ion Draft Research Report MBL (2) Final
43/61
distribution, marketing and servicing of products or services over electronic systems,
and 37% believed that e-commerce consists of electronic data collection. From the
study findings e-commerce involves electronic data interchange, electronic funds
transfer and buying, selling, distribution, marketing and servicing of products or
services over electron