Exchange of Goods and Services Between Two

¶ … exchange of goods and services between two or more people, otherwise known as commerce, is as old a practice as mankind. In recent times commerce has added a twist, pairing it with electronic resources. With the invention of the computer and the creation of the Internet business done online became known as Electronic Commerce (e-commerce). E-commerce combines technology, information systems, and the long reaching arm of the Internet to bring together businesses and customers in a paperless exchange of business information. It has proven to be an alternative means of conducting business that formerly was done in person, by phone, or in a brick-and-mortar store.

Business-to Business electronic commerce facilitates inter-organizational interaction and transaction. Here two or more business entities interact with each other directly or through an intermediary (Kumar & Kumar, 2009). In 1990 Tim Berners-Lee invented the World Wide Web, taking an academic computer network and transforming it into a communications system available to anyone with a computer. By the turn of the new century the Internet had grown to such an extent that businesses were able to offer their services and products online.

When speaking about globalization most refer to the recent past of the 1990s as the beginning but in truth one must go back to the late 19th and early 20th centuries. Human innovation brought forth the invention of the telephone and airplane, opening people to possibilities before unknown. Prior to this having contact with others at great distances took long periods of time. As time passed technological advances made it faster and easier to conduct business transactions.

Globalization and therefore e-commerce, brings market forces from all corners of the world, from industrial complexes and financial centers of large urban areas to small villages in remote locations, together to exchange goods and services. Economies across the world have integrated labor and technology, along with political, cultural, and environmental plans, bringing substantial benefits to all involved. As the economy moves from local to national markets, transactions span longer social and geographical distances -- this requires the production of institutional, formal trust (Koh, Fichman, & Kraut, 2009).