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Issues of trust and commitment in collaborative commerce

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625 ISSUES OF TRUST AND COMMITMENT IN COLLABORATIVE COMMERCE Kazuo Nakatani, Florida Gulf Coast University, [email protected],edu Ta-Tao Chuang, Gonzaga University, [email protected] ABSTRACT This paper discusses factors that affect the creation of trust and commitment in collaborative commerce (c-commerce). It also discusses decisions that organizations must make when applying c-commerce applications. The goal of the paper is to propose a model to describe the building process of trust and commitment in the context of c-commerce. Keywords: collaborative commerce, c-commerce, trust, commitment, e-commerce. INTRODUCTION A new type of enterprise application software, called collaborative commerce (c-commerce), is currently changing the way business partners work together. C-commerce software enables companies to exchange proprietary data, jointly manage projects, and cooperate on the design of new products across divisions and across companies. According to a report (2), the size of the c- commerce market would grow from $5.8 billion in 1999 to $36.5 billion in 2004 (estimated by AMR and IDC). Successful cases of c-commerce have been reported in various industries, such as the aviation and aeronautics, automobile manufacturing, and telecommunications. Recent research indicates that, among others, trust and commitment between business partners are two important factors for the success of c-commerce. Trust and commitment could be existent in a well-established relationship between business partners, and consequently companies that have a long history of partnership could immediately reap the benefits of c-commerce by taking the advantage of opportunities enabled by c-commerce technologies. Meantime, those companies with no long-term, committed partners should consider the issues that might affect the creation of trust and commitment before they adopt c-commerce. This paper presents a model that addresses those issues when applying c-commerce. The goal of the article is to propose a model to describe the building process of trust and commitment in the context of c-commerce. BACKGROUND The globalization of economy and increasing demands from customers are gradually changing businesses’ views of competition and cooperation. Competition occurs not only among individual firms, but also among supply chains or coalitions. Companies in a coalition or in a supply chain of products that are substitutes for each other may need to cooperate to compete. Also, cooperation occurs not only among business partners, but also among competitors. For example, in order to develop compatible products, it is not unusual that software vendors collaboratively work together to develop industry standards or protocols. A supply chain can be created in four different forms (9). The first form of a supply chain is created through open market negotiations. This is usually price-based and legal binding.
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IACIS 2003 ISSUES OF TRUST AND COMMITMENT IN COLLABORATIVE COMMERCE 626 Penalty is often used as an enforcing mechanism of contracts. The duration of such a relationship is short, if not one-time, and the relationship is often adversarial.
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