Eisentraut, Renate

Koch, Michael

Moeslein, Kathrin

English

AIS Electronic Library (AISeL)

Association for Information SystemsAIS Electronic Library (AISeL)AMCIS 2001 Proceedings Americas Conference on Information Systems(AMCIS)December 2001Building Trust and Reputation in Communitiesand Virtual EnterprisesRenate EisentrautTechnische Universität MünchenMichael KochTechnische Universität MünchenKathrin MoesleinTechnische Universität MünchenFollow this and additional works at: http://aisel.aisnet.org/amcis2001This material is brought to you by the Americas Conference on Information Systems (AMCIS) at AIS Electronic Library (AISeL). It has been acceptedfor inclusion in AMCIS 2001 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contactelibrary@aisnet.org.Recommended CitationEisentraut, Renate; Koch, Michael; and Moeslein, Kathrin, "Building Trust and Reputation in Communities and Virtual Enterprises"(2001). AMCIS 2001 Proceedings. 291.http://aisel.aisnet.org/amcis2001/2911The project TiBiD (Telekooperation in Beziehungsnetzwerken für informationsbezogene Dienstleistungen) is funded by the German FederalMinistry of Education and Research; FKZ 01HG9991/2. See: http://www.telekooperation.de/tibid/.1506 2001  Seventh Americas Conference on Information SystemsBUILDING TRUST AND REPUTATION IN COMMUNITIESAND VIRTUAL ENTERPRISESRenate EisentrautTechnische UniversitätMüncheneisentraut@ws.tum.deMichael KochTechnische UniversitätMünchenkochm@in.tum.deKathrin MösleinTechnische UniversitätMünchenmoeslein@ws.tum.deAbstractVirtual enterprises mostly renounce formal contractual guarantees as coordination mechanism in order toensure overall flexibility. As a consequence, trust becomes a decisive coordination mechanism for this type oforganizations. In the project TiBiD we are exploring communities as a basis for building trust and reputationin the initiation phase of virtual enterprises. This paper briefly presents our current results of how to supporttrust building and trust transfer through online communities.IntroductionIn the project TiBiD1 we are looking at how virtual enterprises form and how this formation (initiation) can be supported. In thiscontext the building of trust and the transfer of reputation are of major importance. Therefore, we aim at supporting both the directexchange between potential partners and the search for people that are able and willing to communicate their direct experiencewith others in order to facilitate trust building between potential partners.In this paper we will argue for the usefulness of communities for supporting the initiation of virtual enterprises. First, we willbriefly touch the topic of what communities are and what they can be used for. Then we will present some basics about virtualenterprises before looking at the initiation phase and how it can be supported. At this point we touch the topic of trust and focuson support for trust building and trust transfer. Finally, we present the pilot area where we are currently setting up a supportsystem.Community SupportWhen looking behind the hype around the term “community” one can see communities as what they are: places that give peoplea context to communicate and to find like-minded people. In general a community is a group of people who share some interestor another common context, e.g. students in a university department or people interested in collaborative filtering. Thus, acommunity can be seen as a describing identity for a set of people. Mynatt et al. (1997) concretize further: "[A community] is asocial grouping which exhibits in varying degrees: shared spatial relations, social conventions, a sense of membership andboundaries, and an ongoing rhythm of social interaction ".Basic Support ConceptsCommunity support applications usually provide one or more of the following functionalities:• A medium for direct communication and for exchange of comments within the context of the community.Eisentraut et al./Building Trust and Reputation2001  Seventh Americas Conference on Information Systems 1507• Detection and visualization of relationships (membership in the same community, existence of common interests). This canhelp users to find potential partners for direct interaction (e.g., via matchmaking or expert finding).• (Semi-)automatic filtering and personalization on the basis of knowledge about relationships. This helps to reduce the searcheffort and enables to deal with the information overload.Existing Community Support ToolsSeveral systems already implement some aspects of these basic support concepts. News- and Chat-systems provide a place to meetand a communication medium. Based on News-systems there are different types of so-called community networks which providean exchange area for a local community, such as the inhabitants of a particular city. Buddy systems like ICQ or AOL InstantMessenger provide detailed awareness information (Michalski 1997). Online communities provide a place to communicate,awareness and a rich functionality for storing and retrieving (community) information. Recommender systems like Movie-Critic,Knowledge Pump or Jester do matchmaking on the basis of user profiles and then provide recommendations based on ratings ofother community members. Other systems like Referral Web (Kautz et al. 1997) and Yenta (Foner 1999) focus on expert findingand explicit matchmaking.Virtual EnterprisesCommunities and community support platforms are used in the business context in several ways, from communities for marketing,communities for customer support to knowledge communities (communities of practice). In this paper, however, we will focuson another potential of communities: supporting the initiation of virtual enterprises,  i.e. helping potential partners to find eachother and to start collaboration.Virtual enterprises are considered a counterbalance to traditional organizational forms with long-term internal and externalboundaries, a fixed location, and relatively permanent resources. They develop through a network of physically dispersed peopleand organization units, participating in a coordinated value-added process. A multitude of diversely organized people work  inprofessional core areas. These people accomplish their assignments internally or externally and, in addition, they themselves areassociated with others through several cooperative arrangements. Thus, virtual enterprises manifest themselves as dynamicnetworks of organizational units. Single network nodes can be set up either by individuals, by organization units or by entireorganizations. The connections among single nodes are established dynamically and in a problem-oriented manner. Therefore,task-oriented assignments determine the structure of a virtual enterprise at any point in time. Organizational virtualization can be seen as one of the main strategies of organizational innovation in order to adapt to changinginternal and external conditions (Reichwald et al. 2000). In this context, strategies of virtualization are said to be particularly wellsuited for tasks that are characterized by both their high level of complexity and a correspondingly high level of marketuncertainty.Initiation and TrustHowever, before a virtual enterprise can start operation the partners first have to find each other and to initiate a relationship. Sincethis process includes a high level of uncertainty and risk, the need for trust between the potential partners arises (see Wigand etal. 1998).According to Johnson-George and Swap (1982) and Mayer et al. (1995), trust can be defined as the willingness to take risks.When forming a virtual enterprise, the risk at hand is to engage in a relationship although the available information about apotential partner does not allow for definite predictions about his or her future behavior. To minimize risk, uncertainty, and costs for relationship building, the initiators of virtual companies often limit their search forpotential partners to those they already know and whom they trust because of their personal experience. However, the weaknessof this strategy is that it restricts the number of possible partners, with the risk that the best partner for cooperation may be  notbe taken into consideration because (s)he is not a member of the pool.IT Applications1508 2001  Seventh Americas Conference on Information SystemsCommunities may help to overcome this restriction because they form large relationship networks of loosely coupled partners.However, as community members do not necessarily know each other, personal experience can not be used as a source of trustbetween potential partners in this setting. As a consequence, if communities are designed to be a pool for initiating virtualenterprises, the formation of trust between community members has to be supported explicitly. One way to do so is to assess andto communicate another potential source of trust: second-hand knowledge or a third party’s experience with the potential partner(e.g. McKnight et al. 1998).Support for Trust-BuildingReputation IndicatorsSome recent work on trust-building in the net follows this strategy. Most notably are the reputation indicators used in severalonline systems (Kollock 1999; Koch et al. 2000). The idea behind them is to collect ratings about potential partners from otherusers who already have worked with them and to calculate a reputation indicator therefrom. This indicator then is made accessiblefor potential partners to help them evaluate each other. Examples are online auction platforms like ebay or comment platformslike dooyoo.The weakness of a reputation indicator as defined above is that it merely represents the aggregation of anonymous ratings, whereasvalid information about the identity, competence, and trustworthiness of the raters as well as about the context and backgroundof the ratings is lacking, even if the history – i.e. how the indicator is constructed, who contributed to the rating and how thecontributors themselves are rated – is displayed to the users.Relationship NetworksPresumably because of that, it is obvious that if risk increases, people tend to ask for direct confirmation, i.e. for personalstatements about potential partners instead of anonymous ratings. As we argued above, it seems that trust is predominantly builtfrom ongoing interaction in a common context, either through the partners’ direct common history or through a third party’shistory with the potential partner. Here is where communities come in. They are already used to collect information about relationships (e.g. buddy lists etc.) andmight therefore make an ideal ground for initiation  support in virtual enterprises. Our idea here is to support users not only infinding potential partners, but also in finding indirect links to potential partners via persons whom the users trust and who canbe asked for an evaluation of the potential partner.Conclusion and Future WorkIn this paper we introduced communities as a support medium for trust building in the initiation phase of virtual enterprises. Thisviewpoint highlights the basic features of communities: a medium for communication and for finding partners. In the TiBiDproject we are currently using these basic ideas and are designing a community platform that helps potential virtual  enterprisemembers to find each other. One idea is to have a yellow pages service where users can search for potential partners as usual andwhere search results are annotated with information about network members who have already been in touch both with the userand with the potential partner.As a specific field of application we have chosen the field of startups and of potential  entrepreneurs or freelancers. This groupneeds partners for cooperation and is not yet bound in rigid networks. We are currently in cooperation with entrepreneurshipinitiatives at Technische Universität München (www.unternehmertum.com) and in Greater Munich (www.mbpw.de) and arebuilding a community platform for potential entrepreneurs and startups originating from Technische Universität München. In thisplatform we are planning to provide both information services and communication and matchmaking functionalities withinrelationship networks as described above.Eisentraut et al./Building Trust and Reputation2001  Seventh Americas Conference on Information Systems 1509ReferencesFoner, L.N. Political Artifacts and Personal Privacy: The Yenta Multi-Agent Distributed Matchmaking System, PhD thesis,Massachusetts Institute of Technology, 1999.Kautz, H., Selman, B., and Shah, M. “Referral Web: Combining Social Networks and Collaborative Filtering,” Communicationsof the ACM (40:3), 1997, pp. 63-65.Koch, M., Möslein, K., and Wagner, M. “Vertrauen und Reputation in Online-Anwendungen und virtuellen Gemeinschaften[Trust and Reputation in Online Applications and Virtual Communities],“ in Virtuelle Organisation und Neue Medien, M.Engelien, and D. Neumann (eds.), Lohmar: Eul, 2000, pp. 69-83.Kollock, P. “The Production of Trust in Online Markets,” in Advances in Group Processes (Vol. 16), E. J. Lawler, M. Macy, S.Thyne, and H. A. Walker (eds), Greenwich, CT: JAI Press, 1999, pp. 99-123.Michalski, J. “Buddy Lists,” Release 1.0 (6), 1997.Mynatt, E. D., Adler, A., Ito, M., and Oday, V. L. “Design for Network Communities,” in Human Factors in Computing Systems:Looking to the Future. CHI '97 Conference Proceedings, S. Pemberton (ed.), New York, NY: ACM Press, 1997, pp. 210-217.Johnson-George, C., and Swap, W. “Measurement of Specific Interpersonal Trust: Construction and Validation of a Scale toAssess Trust in a Specific Other,” Journal of Personality and Social Psychology  (43:6), 1982, pp. 1306-1317.Mayer, R. C., Davis, J. H., and Schoorman, F. D. “An Integrative Model of Organizational Trust,” Academy of ManagementReview (20:3), 1995, pp. 709-734.McKnight, D. H., Cummings, L. L., and Chervany, N. L. “Initial Trust Formation in New Organizational Relationships,” Academyof Management Review (23:3), 1998, pp. 473-490.Reichwald, R., Möslein, K., and Piller, F. Taking Stock of Distributed Work: The Past, Present and Future of Telecooperation,ASAC-IFSAM 2000 Conference, July 8-11, 2000, Montreal, Quebec, Canada.Wigand, R., Picot, A., and Reichwald, R. Information, Organization and Management: Expanding Markets and CorporateBoundaries, Chichester: John Wiley and Sons, 1998.

Building Trust and Reputation in Communities and Virtual Enterprises

https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1730&amp;context=amcis2001

Building Trust and Reputation in Communities and Virtual Enterprises

Abstract

Similar works

Full text

Available Versions

AIS Electronic Library (AISeL)