Trust and Risk in Business Networks: Towards a Due Diligence for Electronic Commerce

This paper develops a due diligence for electronic transactions with new partners in business networks with complex goods such as food products to enable the use of e-commerce potentials in first time transactions. The e-commerce due diligence is a means to reduce perceived risks and uncertainties for businesses and create trust and confidence in the electronic transaction with appropriate information. The paper presents a conceptual framework for the due diligence integrating the principles of transaction decision making and the four phases of a transaction process. The operationalization of the framework assigns trust signals and control elements to the four process phases to be communicated during the process.Trust, risk, electronic commerce, first time transactions, due diligence, food networks, Agribusiness, Institutional and Behavioral Economics, Marketing,

E-COMMERCE IN AGRICULTURE: DEVELOPMENT, STRATEGY, AND MARKET IMPLICATIONS

Marketing,

The Applicability of Transaction Costs Economics to Vertical Integration Decision: Evidences from a Brazilian Beef Processor

This article aims to explore the vertical integration decision of a beef processor from an integrated approach operations strategy and transaction costs economic theory. In this research, vertical integration as a structural decision of operations strategy determined by the occurrence of transaction costs. The paper presents one case study carried out in one beef Processor Company which illustrates the main theoretical assumptions. The results suggest that transaction costs economics helps to identify key points of major strategic decisions on vertical integration due to its behavioural perspective, reducing the effect of uncertainty and asset specificity of this decision. At the end of the paper, future research is suggested.vertical integration, operations strategy, transaction costs economics, Agribusiness, Agricultural Finance, Industrial Organization,

Asymmetric Information in Agriculture Supply Chain Management: A Literature Review

Food markets have been in a state of upheaval for some time now. Due to the current trend of numerous consumers favouring sustainable nutrition, the organic food market has proven to be an important market for both consumers and producers. This development enables consumers to continue to afford sustainable food in the future. Due to the complexity and non-transparency of value chains (especially in the organic food market) as well as the insufficient labelling of organic food, there is a lack of information in the organic food market. This often results in market failure. The aim of this research is to understand the problems caused by asymmetric information in the food supply chain and to present the principal-agent theory to detect and describe asymmetric information and as an economic model for understanding asymmetric information in the food supply chain. The principal-agent theory is most frequently used to explain and describe asymmetric information. The imperfection of principal-agent theory is due to the lack of and insufficient application of theories from related disciplines such as transaction theory and game theory. Furthermore, the theory assumes the existence of an informed agent and an uninformed principal. Finally, the analysis of information asymmetry is based on the existence of only principal and agent and neglects the information asymmetries in multi-level network-value chains. This paper presents a structured literature review that provides an overview of the current literature on the subject of asymmetric information in multi-level network-value chains. The identified studies are classified, and gaps are identified for future research

Role of informal institutions in Ready-to-Use-Food (RUF) supply chains in Ethiopia

Ready-to-Use food (RUF) product are nutrient dense foods given to individuals that are suffering from acute malnutrition. Currently 5.8 million children suffer from malnutrition in Ethiopia and the timely and efficient delivery of ready-to-use food products has a significant impact on the lives of these children. However, challenges exist in both the local and international production and delivery of RUF products. One of the challenges is the high transaction costs that exist in the supply chains. Transaction costs are the costs associated with searching for information regarding a product or its market, negotiating a deal and enforcing the terms of the deal. In situations where transaction costs are high due to missing or weak markets and institution, people have relied on different mechanisms including social capital (trust and information sharing) to deal with these costs and carry out business and transactions. The purpose of the study is to examine the role institutions, in particular informal institutions, play in addressing these challenges and improving the supply chain for Ready-to-use food products and chickpea marketing (which is a potential ingredient in new RUF formulations). The institutions examined in this study are mainly the non-market institutions like trust and information sharing that build social capital. Data was collected through surveys and interviews from RUF supply chain actors in Ethiopia. These include chickpea producers, RUTF producers, major demanders (humanitarian organizations and governments), transporters, beneficiaries (feeding centers and hospitals). These agents’ use of informal institutions and trust level during transactions with each other is assessed. Interviews with key informants in the value chain in Ethiopia were conducted to further inform the analysis of institutions in supply chain organization and identify areas of high transaction cost. The transaction costs that are present in the supply chains were further identified through focus group discussions with farmers and a farmer survey. Both qualitative and quantitative methods were used to analyze these data. The structure equation model (SEM) was used to quantitatively analyze the data obtained from farmer survey. The study also found that trust between trading partners reduces the time farmers spent negotiating price with buyers. Trust between trading partners also increased the marketed surplus of farmers. Information sharing among trade partners positively affects trust between partners. The study finds that institutions facilitate chickpea marketing through improving trust and information sharing among trading partners. The results indicate that membership in informal institutions strengthens the trust and information sharing between trading partners and this in turn reduces the transaction costs associated with chickpea trade. In addition, the current performance of the RUF supply chain in Ethiopia is found to be relatively efficient with some issues in the availability of local and imported inputs and the failure to comply with quality standards. These results imply that existing, informal institutions in developing countries can be as effective as formal institutions so effort should be put towards their development and improvement. The RUF supply chain can also be further improved by increasing the capacity of local manufacturers to increase production and their capacity to adhere to quality standards. Stabilizing input markets to make inputs to RUF production more consistently available will also improve the production capacity and improve the price and accessibility of RUF products

A new model for solution of complex distributed constrained problems

In this paper we describe an original computational model for solving different types of Distributed Constraint Satisfaction Problems (DCSP). The proposed model is called Controller-Agents for Constraints Solving (CACS). This model is intended to be used which is an emerged field from the integration between two paradigms of different nature: Multi-Agent Systems (MAS) and the Constraint Satisfaction Problem paradigm (CSP) where all constraints are treated in central manner as a black-box. This model allows grouping constraints to form a subset that will be treated together as a local problem inside the controller. Using this model allows also handling non-binary constraints easily and directly so that no translating of constraints into binary ones is needed. This paper presents the implementation outlines of a prototype of DCSP solver, its usage methodology and overview of the CACS application for timetabling problems

An Agent-based Approach for Improving the Performance of Distributed Business Processes in Maritime Port Community

In the recent years, the concept of “port community” has been adopted by the maritime transport industry in order to achieve a higher degree of coordination and cooperation amongst organizations involved in the transfer of goods through the port area. The business processes of the port community supply chain form a complicated process which involves several process steps, multiple actors, and numerous information exchanges. One of the widely used applications of ICT in ports is the Port Community System (PCS) which is implemented in ports in order to reduce paperwork and to facilitate the information flow related to port operations and cargo clearance. However, existing PCSs are limited in functionalities that facilitate the management and coordination of material, financial, and information flows within the port community supply chain. This research programme addresses the use of agent technology to introduce business process management functionalities, which are vital for port communities, aiming to the enhancement of the performance of the port community supply chain. The investigation begins with an examination of the current state in view of the business perspective and the technical perspective. The business perspective focuses on understanding the nature of the port community, its main characteristics, and its problems. Accordingly, a number of requirements are identified as essential amendments to information systems in seaports. On the other hand, the technical perspective focuses on technologies that are convenient for solving problems in business process management within port communities. The research focuses on three technologies; the workflow technology, agent technology, and service orientation. An analysis of information systems across port communities enables an examination of the current PCSs with regard to their coordination and workflow management capabilities. The most important finding of this analysis is that the performance of the business processes, and in particular the performance of the port community supply chain, is not in the scope of the examined PCSs. Accordingly, the Agent-Based Middleware for Port Community Management (ABMPCM) is proposed as an approach for providing essential functionalities that would facilitate collaborative planning and business process management. As a core component of the ABMPCM, the Collaborative Planning Facility (CPF) is described in further details. A CPF prototype has been developed as an agent-based system for the domain of inland transport of containers to demonstrate its practical effectiveness. To evaluate the practical application of the CPF, a simulation environment is introduced in order to facilitate the evaluation process. The research started with the definition of a multi-agent simulation framework for port community supply chain. Then, a prototype has been implemented and employed for the evaluation of the CPF. The results of the simulation experiments demonstrate that our agent-based approach effectively enhances the performance of business process in the port community

On the road to carbon reduction in a food supply network: a complex adaptive systems perspective

Purpose: In acknowledging the reality of climate change, large firms have set internal and external (supplier oriented) targets to reduce their greenhouse gas (GHG) emissions. This study explores the complex processes behind the evolution and diffusion of carbon reduction strategies in supply networks. Design/methodology/approach: The research uses complex adaptive systems (CAS) as a theoretical framework and presents a single case study of a focal buying firm and its supply network in the food sector. A longitudinal and multilevel analysis is used to discuss the dynamics between the focal firm, the supply network and external environment. Findings: Rather than being a linear and controlled process of adoption-implementation-outcomes, the transition to reduce carbon in a supply network is much more dynamic, emerging as a result of a number of factors at the individual, organizational, supply network and environmental levels. Research limitations/implications: The research considers the emergence of a carbon reduction strategy in the food sector, driven by a dominant buying firm. Future research should seek to investigate the diffusion of environmental strategies more broadly and in other contexts. Practical implications: Findings from the research reveal the limits of the control that a buying firm can exert over behaviours in its network and show the positive influence of consortia initiatives on transitioning to sustainability in supply networks. Originality: CAS is a fairly novel theoretical lens for researching environmental supply network dynamics. The paper offers fresh multilevel insights into the emergent and systemic nature of the diffusion of environmental practices in supply networks