Objectives of knowledge management

3 
Fewer printed materials. Online e-newsletters and brochures replace their physical 
equivalent so saving paper and distribution costs.
4 
Less packaging. Although theoretically there is less need for fancy packaging if an item is 
sold online, this argument is less convincing, since most items like software or electronic 
items still come in packaging. At least those billions of music tracks downloaded don’t 
require any packaging or plastic.
5 
Less waste. Across the whole supply chain of procurement, manufacturing and distribu-
tion the Internet can help reduce product and distribution cycles. Some even claim that 
auction services like eBay and Amazon Marketplace can promote recycling and reuse.
6 
Dematerialisation. Better known as ‘digitisation’, this is the availability of products like 
software, music and video in digital form.
If companies trading online can explain these benefits to their customers effectively, as HSBC 
has done, then this can benefit these online channels. 
But how much could e-shopping reduce greenhouse gas emissions? A study by Finnish 
researchers Siikavirta
et al.
(2003), limited to e-grocery shopping, has suggested that it is 
theoretically possible to reduce the greenhouse gas emissions generated by grocery shopping 
by 18% to 87% compared with the situation in which household members go to the store. 
The researchers estimated that this would lead to a reduction of all Finland’s greenhouse gas 
emissions by as much as 1%, but in reality the figure is much lower since only 10% of grocery 
shopping trips are online. 
Environmental and green issues related to Internet usage
M04_CHAF6542_06_SE_C04.indd 154
7/23/14 12:18 PM

---

155
Chapter 4
E‑environment
Cairns (2005) has completed a study for the UK which shows the importance of gro-
cery shopping – she estimates that car travel for food and other household items represents 
about 40% of all UK shopping trips by car, and about 5% of all car use. She considers that 
a direct substitution of car trips by van trips could reduce vehicle-km by 70% or more. A 
broader study by Ahmed and Sharma (2006) used value chain analysis to assess the role of 
the Internet in changing the amount of energy and materials consumed by businesses for 
each part of the supply chain. However, no estimates of savings are made.
Taxation 
How to change tax laws to reflect globalisation through the Internet is a problem that many 
governments have grappled with. The fear is that the Internet may cause significant reduc-
tions in tax revenues to national or local governments if existing laws do not cover changes 
in purchasing patterns. Basu (2007) notes that around a third of government taxation 
Taxation 
Box 4.6 
HSBC customers plant virtual forest 
HSBC has committed to improving the environment since it became a climate‑ neutral 
company globally in November 2005. Through the use of green technologies and 
emission‑ offset trading, HSBC counteracts all CO 
2
emissions generated by its building 
operations and corporate travel. In 2006, 35% of operations in North America were 
offset by investments in Renewable Energy Certificates from wind power alone. 
Another aspect of HSBC green policy is its online banking service, where it encour‑
ages paperless billing. For example, in the UK in 2007, over 400,000 customers 
switched from paper statements to online delivery, creating a virtual tree each time 
( Figure 4.10 ), and for every 20 virtual trees, HSBC promised to plant a real one. 
Figure 4.10 
HSBC virtual forest
 Source:
www.hsbc.co.uk . 
M04_CHAF6542_06_SE_C04.indd 155
7/23/14 12:18 PM

---

156
Part 1
Introduction
revenue is from domestic consumption tax, with revenue from import taxation around 17%. 
Governments are clearly keen that this revenue is protected.
Government revenue is normally protected since, taking the UK as an example, when 
goods are imported from a non-EU territory, an excise duty is charged at the same rate as 
VAT. While this can be levied for physical goods imported by air and sea, it is less easy to 
administer for services. Here agreements have to be reached with individual suppliers.
In Europe, the use of online betting in lower- tax areas such as Gibraltar has resulted in 
lower revenues to governments in the countries where consumers would have formerly paid 
gaming tax to the government via a betting shop. Large UK bookmakers such as William Hill 
and Victor Chandler are offering Internet- based betting from ‘offshore’ locations. Retailers 
have set up retail operations on Jersey to sell items such as DVDs and CDs which cost less than 
an £18 Low Value Consignment Relief threshold, so no VAT or excise duty needs to be paid.
This trend has been dubbed LOCI or ‘ location- optimised commerce on the Internet’ by 
Mougayer (1998).
Since the Internet supports the global marketplace it could be argued that it makes little 
sense to introduce tariffs on goods and services delivered over the Internet. Such instru-
ments would, in any case, be impossible to apply to products delivered electronically. This 
position is currently that of the USA. In the document ‘A Framework for Global Electronic 
Commerce’, President Clinton stated that:
The United States will advocate in the World Trade Organization (WTO) and other appro-
priate international fora that the Internet be declared a tariff- free zone.