Ethical Issues In E-Commerce Area

The ethical concept can mean a lot of different things for different people, but in general, it is about what is right or wrong in the workplace. Basically, there is no clear moral scope to direct leaders through intricate dilemmas about what is right or wrong (Carter 2010). Perhaps most importantly, attention to ethics in the workplaces aid to ensure that when managers or employees are struggling during tough and critical moment, they can still maintain a steady moral compass. In reality, each company takes a broad variety of approaches on discussing ethics, but in the end, it relies on its own code of ethics or on the exemplary behaviour of people at the top organisation level. According to Robbins (n. d. ), ethics represent the principle, values and beliefs that elucidate right and wrong behaviour. The unique capabilities of the Internet and e-commerce have captured the attention of the marketing community. More and more new and growing companies are interested in developing a business model involving the Internet presence. However, there is still a great deal of doubts about it and many are still unfamiliar with the ethical issues affiliated with its usage as a marketing medium. So, what are the issues particularly related to e-commerce? Let’s list some of the ethical issues spawned with the growing of Alibaba and eBay.

Ethical Issues

Alibaba Selling of counterfeit goods Illicit business exercises are overpowering over Alibaba Group's stages for a significant long time, but then the organization has not taken up compelling techniques to counter it. Alibaba’s Taobao was once blacklisted by the US Trade Representative for its lack of regulation on fake products and piracy online. The US Chamber of Commerce even calls the Hanghou-based company one of the world’s largest sources of counterfeit products online. When did a product search on Taobao with the word "Gucci" with the price set less than $50, about 30,000 results are exhibited, displaying all similar-looking Gucci products (Schumen 2015). With further interrogations done, some of the sellers claimed that they hire factories to produce these wares using the original design. Most of the products’ design are close to those of Gucci products, with slight modifications done, including replacement of the letter "G" in a handbag's pattern with letter "D" (Schumen 2015).

As a result, Alibaba Group was being sued over alleged sales of counterfeit goods by the owner of Gucci and Yves Saint Laurent, Paris based Kering. According to Raymond (2015), it is stated that by using Taobao, one of the trading platforms of Alibaba Group, a merchant is said to have sold approximately 2000 units of fake Gucci handbag for $2-$5 each. The original price for the authentic bag is $795 each. The lawsuit stated that Alibaba Group has permitted the counterfeiters for selling fake products through Taobao.

Solution to the problem

The occurrence of this problem signifies poor organizational structure as the employees have failed to report to their managers regarding the counterfeit goods sold on its site, which indicates the lack formal hierarchy. Actions are only taken when lawsuits are filed against them. Alibaba then promised to conduct a periodic check to determine any possible counterfeit products by using third parties' tool (Gucci sues Alibaba over "counterfeit goods" 2015). They also claimed to penalize the parties involved including banning of the seller account. Besides, Alibaba has introduced ‘dotless visual codes’ to enable seller to sign up their product brands, proving the genuineness of the goods.

eBay Shill bidding

Shill bidding is where sellers use memberships of people they know, or fake memberships they have created, to put bogus or false bids on auctions aiming to increase the bid of the price of goods they are. According to Dr Hampton Finer, an economist in NY Attorney General, shill bidding tends to increase the price of the products and EBay may earn certain fee based on the price (Asher 2009). Cohen expressed that an Aussie eBayer has falsely raised the cost of a thing by roughly $156 in one sale on eBay's platform. The bidder has made 141 offers on 41 items over a month, and every one of the items were enrolled by a similar dealer (Asher 2009). Solution to the problem eBay has realised the weakness in its organisation’s structure and decided to devise a solution in order to restore its organisation performance and responds correctly to its uncertain environment. eBay has implemented an artificial intelligence system that detects and studies the bidding patterns and practices. Serious actions and penalties such as suspension of account are applied if any malicious behaviour is detected (Shill bidding policy n. d. ).

Selling of Holocaust Memorabilia

The Holocaust was a genocide during Word World II. Approximately six million Jews were murdered by Adolf Hitler’s Nazi regime and its collaborators in tragedy. According to Marsden (2013), eBay is facing an international condemnation for selling dozens of pieces of artefact that belonged to the victims of Holocaust. The Holocaust Memorabilia included a striped concentration camp uniform thought to have been worn by a Polish Baker who died in Auschwitz. The uniform was on sale for £11,200. These artefacts are supposed to belong to the museum, but the action of eBay for allowing these sales on its online auction site has demeaning the victims’ family. Solution to the problem eBay has publicly apologised and vowed to donate £25,000 to charity to reflect its concern (Nicol & Murphy 2013). This might happen due to eBay’s weak organisation structure. There is no formal rules and regulations for preventing such incident. In consequence of it, eBay decided to further tighten their trading policy by filtering out the illicit items sold on its site (Marden 2013). More than 30 death camps items were removed from sales by eBay “in view of the seriousness of the issue” (Nicol & Murphy 2013).

Comparison of Ethical Issues between Alibaba and eBay

As seen from the ethical issues faced by both Alibaba and eBay, the arise of these problems are mainly due to the weak organisations’ structure and frail rules and regulations of the both companies. In addition, both companies have failed to identify the weaknesses of the organisation’ strategies in relative to the factors in the uncertain external environment. Therefore, new strategies must be planned and implemented in conjunction to these weaknesses. Also, problem arise because of the weak aspect in the organisation culture. Further enhancements are required for the culture to adapt to the changing environment and focus should be dedicated to the Attention to Detail aspect. Employees in both companies should have done a better analysis and pay attention to the problems faced by customers in the first place. Due to weakly held of this cultural aspect, their employees were unable to identify the Concentration of Effect and Greatness of Harm that the unethical issues can brought to their companies. For instance, in the case of eBay, the organisation did not consider the impact of selling concentration camp victim’s artefacts on the victim’s families and how it would brought disrepute to the company name itself.

Whereas for Alibaba, immediate actions are only taken when lawsuits are filed against them by Gucci and Saint Laurent for the selling of their counterfeit products. If both companies have identified the issues earlier, these problems can be avoided. In response to the weaknesses and issues of the organisations, both companies have utilised Renewal strategy (Turnaround Strategy) by further identifying their weaknesses and defined effective large-scale organizational restructuring solutions as a long-term approach to the problems. Instead of putting the blame on others, both companies admitted their mistakes and weaknesses and promised to enhance their policies and rules to prevent such problem in future.