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Impersonal Trust in B2B Electronic Commerce: A Process View 253 1985), I argue that credibility is also a robust form that is increasingly important in the impersonal environment of B2B eCommerce. Many authors argued that trust is only embedded in repetitive transactions and ongoing relationships, essentially arguing that impersonal trust is not a true form of trust but a functional substitute for it (Granovetter, 1985; Williamson, 1993). Sitkin and Roth (1993) argued that ‘legalistic remedies’ are not effective in creating trust, while Granovetter (1985) maintained that institutional processes are ‘functional substitutes’ of trust. On the contrary, Shapiro (1987) argued that institutional practices and norms could provide a very strong level of trust. In sum, the role of impersonal trust in the literature has been controversial; however, given the importance of impersonal trust in today’s B2B eCommerce, this chapter attempts to disentangle the complex notion of trust and encourage research on the antecedents, underlying trust-building cognitive processes and consequences of each distinct dimension. By examining the two types of trust independently, research could validly conclude which type is robust, easy to build and maintain, and consequential. Lewicki and Bunker (1995) argued that there are different levels of trusting relationships with impersonal processes as the most fragile and familiarity ones as the most robust. However, the impersonal processes are fragile if the underlying institutional structure is fragile, and the signals and incentives are weak. Given strong and well-accepted institutional rules, practices and norms to guide B2B eCommerce, impersonal trust can also become a robust mechanism to govern interfirm economic activity. Even if familiarity trust is indeed more robust, familiarity may not always be possible in eCommerce, since it may be physically or socially difficult to personalize all interfirm relationships, and it might also have negative economic consequences (Helper, 1991). Therefore, impersonal trust can be encouraged in B2B exchanges without significant costs, and provide substantial benefits to the participating firms without forcing them into repetitive transactions. Managerial Implications This study has practical implications for the ways B2B exchanges might increase the general level of interorganizational trust. Heightening the extent of firm accreditation, improving feedback mechanisms, and ensuring an effective monitoring and legal system promotes a trustworthy environment. Failure to provide these antecedents of trust might reduce the general level of credibility in the marketplace, which would eventually force firms to seek other alternatives. Moreover, this study proposes that impersonal trust is an important determinant of satisfaction, reduced perceived risks, anticipated continuity and favorable pricing. These associations set new standards for B2B exchanges; an important consideration should be to Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
254 Pavlou develop the appropriate mechanisms to build and sustain interfirm trust. Since the future of most B2B exchanges relies on many participating firms, high liquidity and trade volume, impersonal trust would probably become an important determinant of the future of many B2B exchanges. This research not only proposes the antecedents of impersonal trust, but it also indicates the cognitive sequences by which trust develops. In considering their participation in B2B exchanges, firms should appreciate the role of impersonal trust that is based on functional mechanisms, institutional structures and regulations instituted in the marketplace. Since these structures provide the secure context in which interfirm exchange relations can develop, companies should either depend on these structures to trust other firms, or rely on exchange relations with familiar partners. Managers should decide which exchange relations should be based on impersonal trust, and which on familiarity trust. For more extensive managerial recommendations on how the proposed framework could be useful, see Pavlou (2000). Limitations and Suggestions for Future Research This research attempts to make theoretical contributions to the academic and managerial literature on the role of impersonal trust in B2B eCommerce. The purpose is to stimulate empirical research in the area towards validating the proposed framework and shedding some light on the pragmatic nature of impersonal trust in B2B eCommerce. It should be clear that this framework proposes only a subset of the many possible relationships between trust and its antecedents, cognitive processes, consequences and other moderating variables. Hence, other important constructs could have been neglected. Future research should take a more extensive approach to cover other variables related to impersonal trust in B2B eCommerce. Therefore, future research should identify other factors that complement the proposed conceptual model, and empirically test a more complete framework. The proposed framework may not be generalizable to other dissimilar cultures. Governance by familiarity trust is prevalent in Japanese markets; hence, impersonal B2B eCommerce might be an infeasible solution in this culture. For example, Sako (1992) compared Japanese and British companies and showed that Japanese firms exhibit higher levels of familiarity trust towards their trading partners. Therefore, the notion of worldwide B2B eCommerce may be restricted by the cultural norms of some nations that rely on familiarity relations. Future research should examine the role of ethnic culture in interfirm relations and predict the boundaries of global B2B exchanges. 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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