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Routinisation of B2B E-commerce by small firms: A process perspective

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Abstract

Prior research on e-business based on the TOE framework and the factor based variance approach have yielded mixed results in that differences exist in terms of the identified technology, organisation and environmental factors and their influence at different steps of the routinisation trajectory. In this research we probe deeper into the routinisation phenomenon and investigate the process in a bid to understand ‘when’ and ‘why’ certain TOE factors become crucial determinants at different stages of the routinisation process. The context of our study is integration of B2B e-markets by four small firms. Our findings from interpretive case studies indicate that changes in organisational characteristic (such as IT infrastructure), environmental characteristics (such as e-business usage in the industry), and perceptions of e-business (risk and benefit) over time influenced movement along the routinisation trajectory. There is evidence that in high risk e-business, the ability to conduct trials with controlled risk is a crucial determinant of progression from initial to continued usage. Also, contrary to the independent effects of the organisation, environment and technology characteristics assumed in prior research, we found that it is the interaction effect of the three factors that determined initial attitude, initial usage and continued usage. Based on our findings we develop a process model of e-business routinisation and discuss the theoretical and practical implications.

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Correspondence to Probir Kumar Banerjee.

Appendices

Appendix 1

Firm A:

Characteristics: Established in 1996. Steady growth in turnovers and profit. Turnover in 2003 was 100 mn HK Dollars. Offices in Hong Kong, Shenzen [China], Dubai, India, Nepal. Shenzen handles procurement while Dubai, India and Nepal offices are sales points. Hong Kong Office manages finance administration and procurement. 12 employees apart from the owner. Has manufacturing arrangements with factories in China.

Clients: Deals with 60 key buyers and 15 key suppliers.

Product Range: Trades in generic electronic items such as hand-held and cordless telephone sets, vcd players, low-end digital cameras, car TV sets etc. Also designs some of these products and sells under its own brand name.

IT usage: Most business functions done on trading software and the Internet. Uses B2B e-markets like alibaba.com and compass.com

Firm B:

Characteristics: Established in 1997 in Hong Kong. 10 mn US Dollars in sales in 2004. 13 employees.

Product Range: TV games, toys, cord telephones and computer accessories like keyboard and mouse. New product lines like low-end digital camera and MP3 players are also developed. Some high-end products like DVD players and digital telephones are manufactured in China to specifications of big buyers. The factories have expertise to design Printed Circuit Boards [PCB] for the products. Raw materials like integrated chips [IC] and plastics are sourced from Taiwan, Korea and China.

Clients: Five big buyers- Argos of UK, Walmart and Sony. Five small buyers in UK and USA.

IT Usage: Uses the ‘Tradelink’ software for electronic submission of some statutory trade documents. Also uses two e-markets — globalsources.com and hkenterprises.com E-mail, fax and telephone are used to conduct business operations with suppliers and EDI link has been established with some big buyers.

Firm C:

Characteristics: Established in 1999. Annual sales 30 mn US Dollars in 2004. Fast growing, profit making company. 40 employees. Small marketing offices in UK and US. Manufacturing arrangements with factories in Bangladesh, Vietnam, Cambodia, Indonesia.

Product Range: Ready-to-wear garments made to order of big buyers.

Clients: GAP, JC Penny and some discounters in Germany, USA, UK. It also sells directly to some small retailers, supplying products that carry the retailers’ brand names. Raw material [yarns] sourced from China. Accessories like buttons, zippers etc. supplied to the company by buyer’s nominated suppliers.

IT Usage: Computers used extensively. Trading software used in the administrative office in Hong Kong. Has EDI links with major buyers.

Firm D:

Characteristics: Established in 1991. Administrative and buying done by Hong Kong office. Sales offices in Germany and S. America. Raw materials [leather] sourced from China. Manufacturing arrangement with factories in China. 18 employees.

Product Range: High-end leather garments for few big retailers.

Clients: Ten big retailers in Europe, Germany and S America

IT Usage: A proprietary telecommunication network connects Hong Kong branch to the sales offices in Germany and S. America. The entire technology planning, implementation and maintenance done by a consulting company in Germany. The Hong Kong office receives orders etc. from the sales offices as PDF attachments to e-mails and communicates with the factories in China through e-mails. Banking transactions are done with a telecommunication link provided by a local bank. The company planned to connect major buyers and suppliers to the corporate telecommunication network.

Appendix 2: Interview Protocol

Open-ended Questions

Q. Can you explain the different business processes that you follow in executing a trade transaction?

Q. What technology systems do you currently use?

Q. Who makes the decision in regard to buying new software and hardware, recruitment of staff and financial expenditures?

Q. What parts of the business process are computerised?

Semi-structured Questions

Q. Have you used B2B e-markets for your business? What has been your experience so far?

Q. Is the email sufficient for your type of business? Have you had any concerns in using email with your business partners?

Q What do you remember about the process through which you have chosen your present buyers/sellers from B2B e-market?

Q. What parts of your business do you feel are better executed on B2B e-markets?

Q. Can you provide us with your opinion about the usefulness of B2B e-markets for your type of business?

Q. Do you feel you could use the B2B e-market could diversify yuour product lines?

Follow-up questions

Q. You mentioned about trade shows and references that help you identlfy new buyers and sellers. How do you proceed once you have found them?

Q. How is your process of dealing with a new buyer identifed on the B2B e-market different from the process of dealing with a buyer identified through trade shows or referrals?

Q. B2B e-markets provides credential of buyer and sellers. They also have established inspection agents like SGS who inspect goods. So why do you have to personally verify by travelling to the supplier’s site as you mentioned?

Q. You just mentioned that sellers on B2B e-markets may be more risky to deal with. So how do you finally deal with them?

Q. Why do you trust the email but not the B2B e-market? They have trust seals and they say they keep all the transaction data confidential. Do you feel they are not reliable?

Q. How much confidence do you have in your present long-term buyers and sellers? Why?

Q. You mentioned that with B2B e-market buyers one has to be cautious. How do you actually deal with them?

It must be mentioned that the above format of open anded and semi-structured questions was used in all four firms. However, follow-up questions differed across firms depending on the response of the interviewees. The follow-up questions presented here is an excerpt from the four firms.

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Banerjee, P.K., Ma, L.C. Routinisation of B2B E-commerce by small firms: A process perspective. Inf Syst Front 14, 1033–1046 (2012). https://doi.org/10.1007/s10796-011-9329-6

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