Trust and e-commerce in food supply chains: Configuration of a trust environment for electronic commerce - PDF Document

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  1. Trust and e-commerce in food supply chains: Configuration of a trust environment for electronic commerce Melanie Fritz, Tobias Hausen, Gerhard Schiefer, Maurizio Canavari* 1 Introduction The current use of business-to-business (B2B) e-commerce in food supply chains is opposed to the opportunities from e-commerce between food firms. Reasons for the reluctant adoption of B2B e-commerce come from the information asymmetry in agrifood products plus the per- ceived risk and uncertainty related to e-commerce. To overcome this perceived risk and un- certainty, trust is considered as predominant enabler. However, the problem is how trust may be generated in B2B e-commerce in food chains. This paper proposes the generation of trust in B2B e-commerce in the agrifood sector through “blended e-commerce”, which combines traditional transaction elements with the efficiency potential of e-commerce. 2 Generation of Trust for B2B E-Commerce in Food Supply Chains Trust in business relationships is the belief that a transaction partner will not exploit vulner- abilities. The theoretical background of trust in (electronic) business relationships is related to transaction cost economics, relationship marketing, information economics, and electronic commerce. Figure 1 shows that the generation of transaction trust in B2B e-commerce in food chains is complex and dynamically interrelated. Trust in transaction parties Trust in transaction parties Trust in control mechanisms Trust in control mechanisms Transaction partner Transaction partner Intermediary Intermediary Transaction partner Transaction partner Intermediary Intermediary Individual‘s level of transaction trust Trust generation Threshold Trust Level Transaction situation Individual and institutional factors Potential gain Risk attitude and perception Risk Fig. 1: Trust generation in B2B e-commerce in food supply chains (further developed from Tan, Thoen 2000) The individual‘s level of trust is specific to the transaction and must surpass his personal threshold to engage in the transaction. Trust in transaction partners and control mechanisms is generated by subjective and objective trust factors. These trust factors for e-commerce in food * Dr. Melanie Fritz, Dr.-Ing. Tobias Hausen, Prof. Dr. Gerhard Schiefer, Universität Bonn, Meckenheimer Allee 174, D-53115 Bonn, m.fritz@uni-bonn.de; Dr. Maurizio Canavari, Università di Bologna, Viale Giuseppe Fanin, 50, I-40127 Bologna, Italy 1

  2. chains are, e.g., recommendations from industry associations, positive transactions experi- ences, product warranties, a robust e-commerce infrastructure, or a common culture. It is im- portant to note that the importance of trust generating factors shifts over the time with increas- ing transaction experience. This shifting importance has to be considered for the design of trust in B2B e-commerce environments for food chains. Challenges for blended B2B e-commerce in food chains are: 1.Derive appropriate multimedia trust generating factors. 2.Exploit multimedia potential to generate trust in innovative ways. 3.Assess interchangeability of trust generating factors. An experimental long term study was performed in a fresh fruit trade food chain scenario where in traditional transactions “Transaction experience” and “Past personal experience” are the most important trust factors. These were transferred to a blended e-commerce environ- ment through the trust factors “Impression of company’s representative” (videoconference), “Past personal experience” (personal contact), and “Transaction partner’s reputation” (name). Therefore, different degrees of relationships between participants were realized in the study: Anonymous (A), reputation (R), videoconference (V), personally known (P). The study’s hypothesis was that the trust factors in blended e-commerce raise trust level suffi- ciently to make partners engage in electronic transactions. Table 1 shows the results of the study. Tab. 1: Results of experimental long term study Transaction phase Offers Deviation from expected value Realizations Deviation from expected value Number of transactions 220 (100%) Transaction relationship V 28 (13%) +0,5% 9 (14%) +1,5% Perspective P R A Sales 94 (43%) +18% 18 (28%) +3% 32 (14%) +1,5% 10 (15%) +2,5% 66 (30%) -20% 28 (43%) -7% Supply 65 (100%) 3 Conclusions and outlook “Blended e-commerce”, which combines traditional transaction elements with the efficiency potential of e-commerce, is an option for the generation of trust in B2B e-commerce in food chains to overcome perceived uncertainty and risk inhibiting adoption. Further studies are re- quired for other chain scenarios (e.g., meat, dairy, grain products) and for different cultural backgrounds (e.g. Germany, Italy, France, Spain) as many food transactions are cross-border, e.g. from Southern to Northern European countries. References TAN, Y.-H. and THOEN, W. (2001). Toward a Generic Model of Trust for Electronic Commerce. In- ternational Journal of Electronic Commerce 5 (2): 61-74 2