Governance Mechanisms in Business-to-Business Electronic Markets

2010 ◽  
Vol 74 (4) ◽  
pp. 45-62 ◽  
Author(s):  
Rajdeep Grewal ◽  
Anindita Chakravarty ◽  
Amit Saini
2010 ◽  
Vol 74 (4) ◽  
pp. 45-62 ◽  
Author(s):  
Rajdeep Grewal ◽  
Anindita Chakravarty ◽  
Amit Saini

Author(s):  
Ana Rosa del Aguila-Obra ◽  
Antonio Padilla-Melendez

There have been numerous studies about business-to-business (B2B) electronic commerce and market structure, most of them analyzing the relationships between buyers and sellers and the role of intermediaries. This research is based mainly on earlier papers about the role of information technology (IT) and electronic communications networks in the companies’ relationships. The use of these computerized inter-organizational networks leads to lower transaction costs, which encourages the development of electronic markets, where there is a severe price competition and greater buyer choice. In this chapter, we analyze the development of global B2B electronic markets and if these markets are becoming a way of improving trust between organizations at an international level, increasing, therefore, the inter-organizational cooperation among them. Based on the literature review and on the analysis of some global electronic markets, we define and describe these platforms, stressing the strategic role of each of the principal participating actors. Furthermore, we propose a model to explain the trust-related sources of competitive advantage for the new intermediaries in electronic markets and compare those with the off-line market’s characteristics. In addition, some propositions related with the trust-building mechanisms are defined.


2020 ◽  
Vol 57 (6) ◽  
pp. 1113-1134 ◽  
Author(s):  
Christian Homburg ◽  
Arnd Vomberg ◽  
Stephan Muehlhaeuser

Multichannel sales systems in business-to-business markets vary substantially in their designs and thereby either attenuate or aggravate agency conflicts between manufacturers and sales partners. Drawing on multiple agency theory, the authors introduce direct and indirect channel usage as focal design dimensions of multichannel sales systems and investigate each channel’s performance effects using a matched manufacturer–sales partner data set. Whereas direct channel usage predominantly lowers agency conflicts in terms of information asymmetry and sales partner moral hazard, indirect channel usage amplifies moral hazard concerns. How those sales partner effects translate into manufacturer performance outcomes critically depends on governance mechanisms, confirming predictions from governance value analysis: formalization enhances performance outcomes for manufacturers in the case of indirect channel usage but diminishes performance in the case of direct channel usage. The authors observe converse effects for centralization and information exchange: centralization and information exchange enhance outcomes of direct channel usage but diminish outcomes of indirect channel usage. The focal managerial implication is that managers must align the design of their multichannel sales systems with effective governance mechanisms.


Author(s):  
Kevin Zhu

This chapter explores the private and social desirability of information transparency of a business-to-business (B2B) electronic market that provides an online platform for information transmission. The abundance of transaction data available on the Internet tends to make information more transparent in B2B electronic markets. In such a transparent environment, it becomes easier for firms to obtain information that may allow them to infer their rivals’ costs than in a traditional, opaque market. How then does this benefit firms participating in the B2B exchanges? To what extent does information transparency affect consumers and the social welfare in a broader sense? Focusing on the informational effects, this study explores firms’ incentives to join a B2B exchange by developing a game-theoretic model under asymmetric information. We then examine its effect on expected profits, consumer surplus, and social welfare. Our results challenge the “information transparency hypothesis” (that is, open sharing of information in electronic markets is beneficial to all participating firms). In contrast to the popular belief, we show that information transparency could be a double-edged sword. Although its overall effect on social welfare is positive, its private desirability is deeply divided between producers and consumers, and even among producers themselves.


2011 ◽  
pp. 1953-1977
Author(s):  
Qizhi Dai ◽  
Robert J. Kauffman

New technological innovations have made it possible for new intermediaries to create value in business processes that involve the procurement of manufacturing and services supplies. Associated with these innovations is the emergence of business-to-business (B2B) electronic markets. These act as digital intermediaries that aim to reduce the transaction costs and mitigate the risks inherent in procurement. They improve buyers’ capabilities to search for attractive prices and also serve to increase the liquidity of sellers’ products. In this chapter, the authors explore the evolution of B2B e-market firms in terms of the strategies they employ to “perfect” their value propositions and business processes for the firms. This is a critical aspect of their attractiveness as business partners for the buyers and sellers that participate in their electronic marketplaces. The key theoretical perspectives of this work are adapted from economics and strategic management. They enable the authors to construct a “partnering for perfection” theory of strategic alliances in e-procurement markets. This perspective is captured in a series of inquiries about “why” and “when” B2B e-markets are observed to form alliances. The authors carry out an innovative econometric analysis that delivers empirical results to show the efficacy of the theory in interpreting real world events. The chapter concludes with a discussion of the implications of this work in academic and managerial terms.


2011 ◽  
pp. 918-929
Author(s):  
Ana Rosa del Aguila-Obra ◽  
Antonio Padilla-Melendez

There have been numerous studies about business-to-business (B2B) electronic commerce and market structure, most of them analyzing the relationships between buyers and sellers and the role of intermediaries. This research is based mainly on earlier papers about the role of information technology (IT) and electronic communications networks in the companies’ relationships. The use of these computerized inter-organizational networks leads to lower transaction costs, which encourages the development of electronic markets, where there is a severe price competition and greater buyer choice. In this chapter, we analyze the development of global B2B electronic markets and if these markets are becoming a way of improving trust between organizations at an international level, increasing, therefore, the inter-organizational cooperation among them. Based on the literature review and on the analysis of some global electronic markets, we define and describe these platforms, stressing the strategic role of each of the principal participating actors. Furthermore, we propose a model to explain the trust-related sources of competitive advantage for the new intermediaries in electronic markets and compare those with the off-line market’s characteristics. In addition, some propositions related with the trust-building mechanisms are defined.


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