Governance Mechanisms in Business-to-Business Electronic Markets

Abstract

Rather than relying on traditional relational exchanges, recent technological advances have made it feasible for firms to undertake market-based transactions through information technology-mediated electronic markets. The success of such business-to-business electronic markets depends on the governance practices of the market maker-that is, the firm that manages and administers the electronic market. Market makers use three governance mechanisms to manage electronic markets: (1) monitoring the market participants (i.e., buyers and sellers that participate in the market), (2) building a sense of community among market participants to instill mutual respect and trust, and (3) self-participating in the electronic market to build know-how about how the market functions. Building on transaction cost analysis theory, the authors suggest that the influence of these governance mechanisms on electronic market performance (i.e., meeting strategic and financial objectives) depends on behavioral and external uncertainty in the market. Survey data from market makers show that (1) monitoring is effective for reputed market makers and when demand uncertainty is high, (2) community building is beneficial when pricing is static rather than dynamic, and (3) self-participation is useful when the market maker is well reputed and when the market relies on dynamic pricing.

Entrepreneurial orientation and firm performance in family SMEs: the moderating effects of family, women, and strategic involvement in the board of directors

“…This design and the extensiveness of the survey encourage respondents to think carefully about each answer; respondents also had the opportunity to ask the interviewer to read the instructions and definitions for each question ). Third, we considered different response formats within and across the sections of the survey (Grewal et al 2010). Most of the questions used 10-point Likert scales, though we used different indices, such as "completely agree"/"completely disagree," "completely wrong"/"completely right," and "very seldom"/"very frequently" (Kortmann 2015).…”

The relationship between consumer shopping stress and purchase abandonment in task-oriented and recreation-oriented consumers

“…The regression also included the two-way interactions between motivational orientation and consumer shopping stress as well as the two-way interactions between motivational orientation and the quadratic form of consumer shopping stress. Before creating the higher order and interaction terms, we meancentered the consumer shopping stress variable to increase interpretability of its main effects (Grewal et al 2010). …”

“…In this context, if consumers do not get fulfillment from the outcome of the shopping activity (e.g., the purchase of a product), abandoning the purchase may increase stress levels. To account for this possibility, we used a control function procedure that has been applied to similar problems in previous research (e.g., Grewal et al 2010). The procedure derives a proxy variable to capture the part of the endogenous predictors that correlates with the error term in the main equation, so the remaining variation in the endogenous variable is independent of the error and traditional estimation approaches will be consistent (Petrin and Train 2010).…”

“…Given that the correction for endogeneity bias is conditional on the values of the endogeneous consumer shopping stress variable, we then estimated the impact of the shopping stress and the interaction terms between the residual from Stage 1 and the linear and quadratic form of consumer shopping stress, respectively, on purchase abandonment along with the residual (Garen 1984;Grewal et al 2010). Formally, the Stage 2 regression model is:…”

Current Research On Reverse Auctions:PART II-Implementation Issues Associated With Putting Competitive Bidding To Work

“…As Grewal, Chakravarty & Saini captured it: "The market maker's role in facilitating interactions between buyers and sellers requires it to emphasize governance mechanisms that can ensure that market participants are able to participate in a fair manner. The better governed an electronic market is, the higher is the likelihood that it will attract participants and thus improve market performance (conceptualized as meeting strategic and financial objectives)" [51].…”