Aggregation and the Role of Trusted Third Parties in SME E-Business Engagement: A Regional Policy Issue

YesIt is against the background of low engagement by SMEs in e-business that this paper seeks to highlight the potential importance of aggregation and of the role of trusted third parties in facilitating higher levels of involvement. The paper is based on an ongoing SME e-business research programme and reports on some recent research on SMEs that were using high complexity e-business applications and explores the extent to which the research findings could address the core concern of low engagement. This qualitative case study based research includes analysis of data collected from 13 community intermediaries, acting as trusted third parties. It concludes that the role of community intermediaries appears to be central to the adoption of critical e-aggregation applications provided by service providers. For policymakers, this important role of critical e-aggregation applications in facilitating e-business engagement by SMEs has emerged as part of this research but there is limited evidence of policy initiatives that reflect this

Trusted operational scenarios - Trust building mechanisms and strategies for electronic marketplaces.

This document presents and describes the trusted operational scenarios, resulting from the research and work carried out in Seamless project. The report presents identified collaboration habits of small and medium enterprises with low e-skills, trust building mechanisms and issues as main enablers of online business relationships on the electronic marketplace, a questionnaire analysis of the level of trust acceptance and necessity of trust building mechanisms, a proposal for the development of different strategies for the different types of trust mechanisms and recommended actions for the SEAMLESS project or other B2B marketplaces.trust building mechanisms, trust, B2B networks, e-marketplaces

African small and medium enterprises, networks, and manufacturing performance

This paper examines the role of private support institutions in determining small and medium enterprise (SME) growth and performance in Sub-Saharan Africa (SSA). It finds that SMEs in SSA get around market failures and lack of formal institutions by creating private governance systems in the form of long-term business relationships and tight, ethnically-based, business networks. There are important links between these informal governance institutions and SME performance. Networks raise the performance of"insiders"and, in the sparse business environments of the SSA region, have attendant negative consequences for market participation of"outsiders,"such as indigenous African SMEs. This is indicated through the determinants of access to supplier credit. Policy interventions will be needed to improve the platform for relation-based governance mechanisms and to address the exclusionary effects of tight networks.Economic Theory&Research,Banks&Banking Reform,Business in Development,Business Environment,Technology Industry

The Potential of Critical E-Applications for Engaging SMEs in E Business: A Provider Perspective

YesAgainst a background of the low engagement of SMEs in e-business this paper investigates the emergence of, and potential for, critical e-applications defined as `an e-business application, promoted by a trusted third party, which engages a significant number of SMEs by addressing an important shared business concern within an aggregation.¿ By a review of secondary data and empirical investigation with service providers and other intermediaries the research shows that such applications can facilitate the e-business engagement of SMEs. There are three key findings, namely: the emergence of aggregation specific e-business applications; the emergence of collaboratively based `one to many¿ business models; and the importance of trusted third parties in the adoption of higher complexity e-business applications by SMEs. Significantly this work takes a deliberately provider perspective and complements the already considerable literature on SME IT adoption from a user and network perspective. In terms of future research the importance of a better conceptual understanding of the impact of complexity on the adoption of IT by SMEs is highlighted

German and Israeli Innovation: The Best of Two Worlds

This study reviews – through desk research and expert interviews with Mittelstand companies, startups and ecosystem experts – the current status of the Israeli startup ecosystem and the Mittelstand region of North Rhine- Westphalia (NRW), Germany. As a case study, it highlights potential opportunities for collaboration and analyzes different engagement modes that might serve to connect the two regions. The potential synergies between the two economies are based on a high degree of complementarity. A comparison of NRW’s key verticals and Israel’s primary areas of innovation indicates that there is significant overlap in verticals, such as artificial intelligence (AI), the internet of things (IoT), sensors and cybersecurity. Israeli startups can offer speed, agility and new ideas, while German Mittelstand companies can contribute expertise in production and scaling, access to markets, capital and support. The differences between Mittelstand companies and startups are less pronounced than those between startups and big corporations. However, three current barriers to fruitful collaboration have been identified: 1) a lack of access, 2) a lack of transparency regarding relevant players in the market, and 3) a lack of the internal resources needed to select the right partners, often due to time constraints or a lack of internal expertise on this issue. To ensure that positive business opportunities ensue, Mittelstand companies and startups alike have to be proactive in their search for cooperation partners and draw on a range of existing engagement modes (e.g., events, communities, accelerators). The interviews and the research conducted for this study made clear that no single mode of engagement can address all the needs and challenges associated with German-Israeli collaboration

Simplistic vs. Complex Organization: Markets, Hierarchies, and Networks in an 'Organizational Triangle'

Transaction cost economics explains organizations in a simplistic ‘market-vs.-hierarchy’ dichotomy. In this view, complex real-world coordination forms are simply considered ‘hybrids’ of those ‘pure’ and ideal forms, thus being located on a one-dimensional ‘line’ between them. This ‘organizational dichotomy’ is mainly based on relative marginal transaction costs, relative lengths of value-added chains, and ‘rational choice’ of coordination form. The present paper, in contrast, argues that pure ‘market’ and ‘hierarchy’, even including their potential hybrids, are a theoretically untenable and empirically void set. Coordination forms, it is argued, have to be conceptualized in a fundamentally different way. A relevant ‘organizational space’ must reflect the dimensions of a complex world such as dilemma-prone direct interdependence, resulting in strong strategic uncertainty, mutual externalities, collectivities, and subsequent emergent process. This, in turn, will lead either to (1) informally institutionalized, problem-solving cooperation (the instrumental dimension of the institution) or (2) mutual blockage, lock-in on an inferior path, or power- and status-based market and hierarchy failure (the ceremonial dimension of the institution). This paper establishes emergent instrumental institutionalized cooperation as a genuine organizational dimension which generates a third ‘attractor’ besides ‘market’ and ‘hierarchy’, i.e., informal network. In this way, an ‘organizational triangle’ can be generated which may serve as a more relevant heuristic device for empirical organizational research. Its ideal corners and some ideal hybrids on its edges (such as ideal clusters and ideal hub&spoke networks) still remain empirically void, but its inner space becomes empirically relevant and accessible. The ‘Organizational Triangle’ is tentatively applied (besides casual reference to corporate behavior that has lead to the current financial meltdown), by way of a set of criteria for instrumental problem-solving and a simple formal algorithm, to the cases of the supplier network of ‘DaimlerChrysler US International’ at Tuscaloosa, AL, the open-source network Linux, and the web-platforms Wikipedia and ‘Open-Source Car’. It is considered to properly reflect what is generally theorized in evolutionary-institutional economics of organizations and the firm and might offer some insight for the coming industrial reconstructions of the car and other industries.Market vs. Hierarchy; Transaction Costs; Complexity; Institutionalization; Network Formation; Hub&Spoke Supplier Networks; Open-Source Networks

Library purchasing consortia in the UK: activity, benefits and good practice.

Following a brief introduction in Section 1, Section 2 sets out the operational context of library purchasing consortia. A range of key factors have shaped recent developments in the four LIS sectors under consideration (FE, HE, health and public libraries); some have exerted a common influence over all (e.g. information technology, European Commission purchasing directives, new central government, decline in bookfunds); some are sector-specific (e.g. purchasing arrangements, regional administrative frameworks, collaborative partnerships). The structure and markets of the book and periodical publishing industry in the UK are reviewed, with attention paid to historical as well as more recent practice that has had an impact on library supply. Although each component of the LIS purchasing consortia jigsaw displays individual characteristics that have evolved as a response to its own environment, the thread that links them together is constant change. Section 3 presents the results of a survey of identified library purchasing consortia in the four library sectors. It treats common themes of relevance to all consortia arising from information gathered by seminar input, questionnaire and interview. These include models of consortium operation, membership and governance, ‘typical’ composition of consortia in each sector, and links to analogous practice in other library sectors. Common features of the tendering and contract management process are elicited and attention paid to any contribution of procurement professionals. Finally, levels of consortium expenditure and cost savings are estimated from the published statistical record, which readily demonstrate in financial terms the efficiency of the consortial purchase model for all types of library in the United Kingdom. Section 4 presents the results of a survey of suppliers to libraries in the United Kingdom of books and periodicals, the two sectors most commonly represented in current contracts of library purchasing consortia. It sets out in some detail the operating context governing the highly segmented activities of library booksellers, as well as that pertaining to periodicals suppliers (also known as subscription agents). Detailed responses to questions on the effects of library purchasing consortia on suppliers of both materials have been gathered by questionnaire survey and selected follow-up interviews. Results are presented and analysed according to supply sector with attention given to the tendering process, current contracts under way, cross-sectoral clientele, and advantages and inhibitors of consortia supply. Further responses are reported on issues of how consortia have affected suppliers’ volume of trade, operating margins and market stability as perceived in their own business, the library supply sector and the publishing industry. Finally, overall conclusions are drawn and projections made as to future implications for both types of library suppliers. Section 5 synthesises findings, details enabling and inhibiting factors for consortia formation and models of best practice amongst consortia. The scope for cross-sectoral collaboration is discussed and found to be limited at present. Pointers are given for future activity

Choosing between Auctions and Negotiations in Online B2B Markets for IT Services: The Effect of Prior Relationships and Performance

The choice of contract allocation mechanism in procurement affects such aspects of transactions as information exchange between buyer and supplier, supplier competition, pricing and, eventually, performance. In this study we investigate the buyer’s choice between reverse auctions and bilateral negotiations as an allocation mechanism for IT services contracts. Prior studies into allocation mechanism choice focused on factors pertaining to discrete exchange situation, such as con-tract complexity or availability of suppliers. We broaden the research by focusing on buyers’ past exchange relationships with vendors. Based on the literature on the economics of contracting and agency theory, we hypothesize that prior re-peat interaction with vendors favors the use of negotiations over auctions in the next transaction, while the need to explore the marketplace due to buyer’s inexperience or dissatisfaction with vendor’s performance in the most recent project leads to the use of auctions instead of negotiations. We find support for these hypotheses in a longitudinal dataset of 2,081 IT projects realized by 91 repeat buyers at a leading online services marketplace over a period of eight years. Taken together, the results show that analyzing B2B auctions and negotiations should move beyond analyzing discrete instances and instead analyze them in the context of the individual firm’s history and supplier strategy.outsourcing;IT services;online marketplace;reverse auctions

The role of trust in the transition from traditional to electronic B2B relationships in agri-food chains

E-business adoption rates in the agri-food sector are rather low, despite the fact that technical barriers have been mostly overcome during the last years and a large number of sophisticated offers are available. However, concerns about trust seem to impede the development of electronic relationships in the agri-food chains as trust is of particular importance in any exchange of agri-food products along the value chain. Drawing on existing research, characteristics and dimensions of trust are initially identified both in traditional and in electronic B2B relationships and a typology of trust is proposed. The aim of the paper is to provide an overview of the implementation and use of trust elements that e-commerce offers dedicated to agri-food sector. This assessment will show the current situation and discuss gaps for further improvement with the objective to facilitate the uptake of e-commerce in agri-food chains