Buyer-Supplier Relationships and the Adoption of Business-to-Business Electronic Marketplaces

Abstract

<p>Despite the high expectations that researchers and practitioners had for business-to- business electronic marketplaces (EMs), EMs have not prospered, for reasons that are not well understood. Research to this point on EM adoption is very limited due to their quickly changing nature and the complexity of the issue, which involves multiple economic, political and technical factors at both macro and micro levels.</p> <p>EM adoption and buyer-supplier relationships are related. Buyer-supplier relationships play an important role in firms' EM adoption decisions since businesses are not willing to change their current relationships with trading partners to adopt EMs and their support functionalities, such as auctions, reverse auctions, transaction support, etc. The adoption of EMs also impacts buyer-supplier relationships. A framework is proposed in this thesis to investigate these mentioned issues. A buyer-supplier relationship perspective is adopted to investigate EM adoption, and both the economic and power dimensions of buyer-supplier relationships are examined. It is proposed that power can speed up the adoption of EM functionalities and that the effect of power is moderated by market structure. Some important contingencies are suggested that underlay buyer supplier relationships, such as transaction uncertainty, transaction frequency, transaction specific investment, complexity of product description and non-contractible factors, and it is proposed that they are likely to affect choice of functionality. At the same time, it is proposed that EMs can make short-term relationships efficient and long-term relationships effective. It is also proposed that the use of EMs causes varying degrees of satisfaction of participants with their online trading partners.</p> <p>A case study approach was adopted to examine the framework. A total of five EMs and some of their participating buyers and suppliers were studied to validate the propositions. Some important findings are reported. The first finding was that the classification of EMs should not be a dichotomy, but a continuum. It was also found that complexity of product description could not explain why companies choose to use different functionalities, since simple products tended to be involved in EM trading, in all the functionalities that we studied. It was confirmed that relationship efficiency and effectiveness gains were moderated by the drawbacks of EMs and the lack of participant system and process integration into EM systems. Finally, based on the results of the case studies and the confirmed propositions, a refined framework is presented and described.</p>