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Impersonal Trust in B2B Electronic Commerce: A Process View 241<br />
the absence of salespeople makes trust based on the salesperson’s expertise,<br />
likeability and similarity mostly unavailable. Therefore, an impersonal type of trust<br />
may be more appropriate in B2B eCommerce. There is an urgent need to go<br />
beyond traditional dyadic relationships and examine a larger context of buyersupplier<br />
relations in B2B eCommerce. When an increasingly large number of firms<br />
conduct business with many new, even anonymous partners, the need to understand<br />
the concept of impersonal trust in B2B eCommerce becomes fundamental.<br />
Trust is important in impersonal exchange relationships, especially where<br />
information asymmetry and uncertainty may give rise to opportunism (Akerloff,<br />
1970), which usually leads to mistrust, agency risks and high transaction costs. B2B<br />
eCommerce takes place in an uncertain environment that allows substantial<br />
information asymmetry between firms. Opportunism creates the problems of<br />
adverse selection and moral hazard, which are described in agency theory (Jensen<br />
and Meckling, 1976). Adverse selection occurs when firms may be motivated to<br />
misrepresent their respective abilities to the other trading firm. Moral hazard occurs<br />
when firms do no put forth the level of effort agreed upon, or fail to complete the<br />
requirements of an agreement (Mishra et al., 1998). The problems of adverse<br />
selection and moral hazard could result in excessive risk associated with online<br />
transactions, eroding the foundations of B2B eCommerce, and jeopardizing its<br />
proliferation. However, according to game theory, under suitable mechanisms<br />
opportunism does not pay off in the long run (Kandori, 1992). The institutional<br />
structures of B2B exchanges can transform many single transactions into a<br />
continuous sequence of relations between organizations, preventing opportunism<br />
through cooperative signals and incentives. Drawing from agency theory and<br />
transaction costs economics (TCE), trust may be viewed as a risk-reduction<br />
mechanism, decreasing transaction and agency costs and providing flexible transactions<br />
(Beccera and Gupta, 1999). B2B exchanges provide means of building<br />
trust through a series of safeguarding mechanisms, such as accreditation, feedback,<br />
monitoring and legal bonds. Since B2B exchanges are becoming an important<br />
coordination mechanism for economic activity, this chapter attempts to provide a<br />
framework to explain the process by which their mechanisms may engender<br />
impersonal trust. Moreover, the consequences of impersonal trust in B2B<br />
eCommerce are examined.<br />
Despite the prolific differences between the traditional view of trust and<br />
impersonal trust in B2B eCommerce, this chapter proposes that impersonal trust<br />
can still complement interfirm exchange relations. The purpose of this chapter is to<br />
provide new insights into how trust develops in the impersonal context of B2B<br />
eCommerce by drawing on trust-building cognitive processes (Doney and Cannon,<br />
1997). The global concept of trust is viewed as a two-dimensional construct in<br />
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