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Impersonal Trust in B2B Electronic Commerce: A Process View 245 contingencies to avoid relying on another firm’s benevolent motives. Hence, B2B exchanges provide a set of trust-building functions such as accreditation, feedback, monitoring and legal bonds that make opportunism irrational, thus promoting a trustworthy environment. The fact that many real-life anonymous B2B exchanges function without familiarity trust (e.g., Altra.com, Chemconnect.com) suggests that impersonal trust is at least sufficient for basic market transactions. Credibility can be regarded as the dimension of trust that governs economic activity along with the price mechanism in B2B eCommerce. Following Ganesan (1994) and the recommendations of Geyskens et al. (1998), I propose that trust has two theoretically and empirically distinct dimensions, credibility and benevolence. Impersonal trust based on credibility mostly applies to B2B eCommerce, which focuses on institutionalized structures and arrangements that B2B exchanges provide to create a stable context within which interfirm cooperation could develop. A Process View of Impersonal Trust Doney and Cannon (1997) drew on several theories developed in social psychology, sociology, economics and marketing to isolate five cognitive processes through which trust engenders. These distinct processes by which trust can develop are the capability, the transference, the calculative, the intentionality, and the prediction process. These processes suggest a trust-building attempt, followed by a favorable outcome towards actually engendering trust. Therefore, these processes assume both an attempt towards developing trust, followed by a positive outcome. For example, the calculative process does not solely generate trust; the outcome of the calculation may generate trust given a favorable assessment of the calculation. In general, these five processes engender the global construct of trust. However, only the capability, transference and calculative processes are able to generate trust in an impersonal context. The processes of intentionality and prediction necessitate interaction and familiarity-learning from contact. Therefore, only capability, transference and calculative are proposed to act as mediating variables connecting the antecedents of impersonal trust in B2B eCommerce with credibility. For a more exhaustive view of all five impersonal and familiarity trustbuilding cognitive processes, see Pavlou (2001). Capability Process Can I trust a firm to have the competence to perform as expected? According to Sako and Helper (1998), competence is the source of capability trust, which assesses whether a firm is able to carry out its promises. Doney and Cannon (1997) argued that trust can be developed from evaluating a firm’s competence. The capability process is unavoidable in all aspects of B2B exchange relations, and as Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
246 Pavlou long as there is adequate information to perceive competence, this impersonal trustbuilding process can become the groundwork of a trustworthy relationship. Therefore, the capability process of engendering trust may develop in eCommerce to promote trust in a firm’s credibility. Transference Process Can I trust a firm based on its performance in prior transactions with others? The institutional source of trust is associated with structural arrangements that build trust through incentive mechanisms (Shapiro, 1987). Trust can be gained based on reliable information received from a trusted <strong>net</strong>work of firms, suggesting that trust can be transferred from one buyer to another, even if the trustor has no other experience. A firm may employ the cognitive transference process (Doney and Cannon, 1997) to analyze information from other firms to form its trust perceptions. Therefore, given a trustworthy <strong>net</strong>work of firms, the transference process of engendering trust can become another element of impersonal trust and build trust in a firm’s credibility. Calculative Process Can I trust a firm based on a calculation of its costs and benefits of cooperating? The economics literature suggests that the primary source of trust is based on a buyer’s sober calculation of the other firm’s cost and benefits of cheating (Dasgupta, 1988). Hence, trust involves a calculative process that a buyer assesses the potential losses compared to the short-term gains of a firm’s non-cooperative behavior (Doney and Cannon, 1997). This process suggests that as long as it is irrational for a firm to cheat, it can be trusted since it is to its advantage to cooperate. Therefore, the calculative process can become another constituent of trustworthy transactions. This subjective calculation has different implications for the two dimensions of trust. While a firm’s credibility can be trusted, benevolence cannot be generated based on the calculative process. According to the definition of benevolence, the other firm is expected to cooperate, even given the chance (greater benefits) of cheating; hence, the calculative process will always suggest that a firm’s benevolence cannot be trusted because the benefits of cheating given the chance would always be greater. Therefore, the trust-building calculative process can build trust in a firm’s credibility. Antecedents of Impersonal Trust in B2B eCommerce An increasingly important application of interfirm eCommerce is the B2B exchange, which is an interorganizational information system (IOIS) through which multiple firms interact to identify and select partners, negotiate and execute Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
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Acquisition Editor: Mehdi Khosrow-P
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The Economic and Social Impacts of
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vi Preface E-commerce is not new, t
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