Ethical Aspects of B-to-B Public e-Marketplaces: Creation of Trust in a Global Market

AUTHOR
Wassim MNIF

ABSTRACT

This study explores the ethical aspects of public e-marketplaces (EMPs) around trust. The ethical aspects of EMPs described in this paper are as follows: EMPs provide (a) a mechanism to evaluate trustworthiness of the participants, sellers and buyers, in a neutral way, (b) a technical platform for online trade with respect for different social norms and values, and (c) the ability and opportunity to compete with large companies and multinationals for small and medium enterprises (SMEs). This study is the first to deal with interrelationship between trust and cross-cultural issues in B-to-B EMPs. Previous studies have concentrated on examining trust in B-to-B EMP, ignoring the socio-cultural aspect.

The development of information and communications technology (ICT) has brought about a tremendous change in our lives, shifting our society from industrial to information-based one. In fact, one of the prominent results of this shift is the emergence of various types of e-commerce, including business-to-consumer (B-to-C), business -to-business (B-to-B), and consumer-to-consumer (C-to-C) e-commerce, with more weight for B-to-B e-commerce, which is by far the largest sector in terms of a turnover.

A survey of the literature in this field indicates that there remain some barriers, which hamper the development of online business and that ensuring trust in online trade is a critical factor for successful B-to-B e-commerce in general, especially for successful EMPs. In fact, the success of EMPs requires more than technical matters such as interoperability. EMPs should become a platform for online business trade as well as for evaluating trustworthiness of the participants. Accordingly, establishing trust or confidence between the participating buyers and sellers is a prerequisite for doing business in the digital environment.

The growing literature on online trade suggests a variety of useful remedies for developing trust including institution- and technology-based control mechanisms. However, issues and phenomena concerning trust in online commerce in EMPs are so complex to understand because of their global nature that in-depth, careful examination of online trust from a socio-cultural perspective is required in order to develop and implement effective, reliable measures to ensure trust in online trade in EMPs.

EMPs are central market space open for many buyers and sellers. Transactions made in EMPs are called ‘spot-sourcing’ in case that matches of buyers and sellers, whether they know each other or not, for transactions are made. On the other hand, when a transaction involves creating a network of suppliers, i.e., partnership based on a long-term contract in which partners know each other, such a transaction is called ‘systematic sourcing‘. For both types of sourcing, trust is needed in order to realize transactions and sustain the business relationship. Furthermore, establishing trust in EMPs would create and increase their liquidity; in other words, the number of buyers and sellers participating in those EMPs is expected to increase. This function of trust is notable in terms of business, because liquidity creation is one of the most important factors of successful EMPs.

The neutral governance provided by EMPs could bring about fair conditions of trade to the participants. Here, fair conditions mean that a participant trades in EMP under the conditions whose desirability in terms of business activities positively correlates with the trust of the participant. According to Mayer et al. (1995) and Sako and Helper (1998), trust in EMPs consists of the three dimensions of competence, integrity and benevolence. This paper deals with the last two dimensions with a special focus on benevolence dimension.

In addition, considering the global nature of EMPs and relationships among participants in EMPs, this study explores the trust-building mechanisms in B-to-B EMPs through a cross-cultural analysis and tries to provide a global concept of trust in the digital economy.

The well-known view that globalisation is a double-edged sword with positive effects on rich or developed countries and negative impacts on developing ones and the fact that usually businesses ignore the differences in cultures, religions and languages pertaining to the involved countries suggests the need for examination of the role of EMPs at the global level. In fact, EMPs tend to target SMEs, to which EMPs provide the ability to compete equally with their large and global counterparts. Hence, this paper tries to examine the function of EMPs that offers global governance for participating buyers and sellers. EMPs can help buyers and sellers achieve their common purpose, fair trade, by providing them with transparent information about the trade attributes and conditions and with secure communication and dispute resolution system.

ABSTRACT

Mayer, R., Davis, C., James, H. (1995), “An Integrative Model of Organization Trust”, Academy of Management Review, Vol. 20, No. 3.

Sako, M., and S. Helper (1998), “Determinants of Trust in Supplier Relations: Evidence from Automotive in Japan and the United States”, Journal of Economic Behavior & Organization, 34, pp. 387-417.

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