Inter-organizational Trust in Business to Business Electronic Commerce

University Of Central Missouri, Warrensburg MO

Investigators

Abstract

Business-business e-commerce involves the use of computers and telecommunications in routine business relationships. It mostly affects the organizations' operations and daily relationships with their suppliers, customers, banks, insurers, distributors, and other trading partners. Although most popular accounts of e-commerce focus on business-to-consumer e-commerce, business-to-business e-commerce is becoming the key in inter-organizational relationships, (Keen, 2000; Lee and Turban, 1999). The close coupling between buyers and suppliers (sellers) form inter-organizational relationships. Trust in e-commerce participation has received a lot of attention, especially in the recent years. However, to date there has been no systematic examination or formulation of a model of inter-organizational trust for business-to-business e-commerce. Much of the literature on trust has tended to focus from a psychological rationale, while neglecting factors such as trading partner trust behaviors, and the process involved in developing trust and its impact on organizational and social issues within which e-commerce operations take place. The purpose of this research project is to increase the growth of business-to-business e-commerce in Vermont by examining how trust mechanisms evolve and contribute to business-to-business e-commerce adoption in Vermont. Therefore, the core objective of this research project is to investigate, explore and examine the impact of trust mechanisms in business-to-business e-commerce. By doing this, success factors in business-to-business e-commerce can be identified and utilized to provide guidelines to enhance the growth of businesses in Vermont that will in turn create more jobs. This will in turn, increase the awareness of trust behaviors among e-commerce practitioners. E-commerce organizations in Vermont will be able to practice business-to-business e-commerce more confidently (by enforcing best business practices); thus improving their chances of surviving in a competitive global market environment (particularly against their neighboring cities such as Boston and Montreal). Indeed the geographical location of Vermont makes it even more attractive to conduct e-business. Experienced e-commerce practitioners (trading partners) will be able to observe the behaviors of their trading partners and will be able to monitor, assess, and evaluate trust behaviors of themselves and their trading partners. Although governance mechanisms (in the form of legal contracts, trust and security-based mechanisms in e-commerce) provide technological assurances (using digital signatures, encryption mechanisms, functional acknowledgment procedures, and trading partner agreements) that help mitigate perceived risks of e-commerce, this research project will emphasize on the importance of developing collaborative trustworthy trading relationships. A key strength of the research is that the respondents will include practitioners from a wide range of organizations and occupations. Therefore, while the organizations and their people will not be selected randomly, quite a diverse group from a cross-section of industries will participate that will in turn benefit the entire Vermont business community.