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Copyright2005
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Trust Among Mobile Business Partners
Roger ClarkeXamax Consultancy Pty Ltd, Canberra
Visiting Professor, Uni. of Hong Kong, U.N.S.W., A.N.U.
http://www.anu.edu.au/people/Roger.Clarke/...
.../EC/MBusTrust {.html, .ppt}
ICMB 2005 – m>BusinessSydney, 11 July 2005
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Trust Among Mobile Business Partners
Themes
• Understand History ... Or Repeat It• Trust and Consumers / Trust and Partners• Change in Business Processes and
Organisation• From Virtual to Ambient m>Organisation• Partnership Trust and Distrust• Towards a Trust Framework for m>Business
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Trust Issues Affecting eBusiness Customers / Clients
• Terms of Trade• Other-Party Default
• Data Security in General• Data Security In Particular:
• Identity• Location• Identity Authentication Data
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Overcoming Device Promiscuityin Mobile Devices, RFID Chips,
etc.
• Sufficient Processor & Memory Capacity
• Sufficient Power when it’s needed• Two-Way Device Authentication• Consumer Requirements defined• Consumer Requirements implemented
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Trust Issues Affecting Business Partners
• Business Aspects• Massive Investments• Shifting Allegiances• Security Problems• Appropriateness of
Payment Mechanisms• Demand-Side:
• Cultural Variations• Cultural Change
• Technology Aspects• Clash between Multimedia
Expectationsand Mobile Networks’ Channel Capacity
• Payment Mechanisms• Infrastructure Variations,
Compatibilities, Interoperability
• Rapid Change andForward-Compatibility
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Lesson 1 from eCommerceSo near ... and yet so far
• Reaping the benefits of eBusiness depends on it being adopted by others
• But many organisations suffer from slow adoption by their business partnersespecially where those partners are:
• Medium-Sized Business Enterprises• Small Business Enterprises• Micro Business Enterprises• Consumers and Citizens
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A Retrospective on 25 Years of Changein Business Process
and Business Organisation
• From Organigrams to Value-Chain Thinking
• Generations of System Topologies• Mutating Organisational Topologies• Virtual and Ambient Organisations
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The Business Enterprise Value-Chain
Firm Infrastructure (eg. Finance, Planning)
Human Resource Management
Technology Development
Procurement
InboundLogistics
Operations (Manufact-
uring)
OutboundLogistics
Marketingand Sales
After-saleService
MARGIN
SupportActivities
Primary Activities
Porter M. 'Competitive Advantage' The Free Press,New York, 1985, in Chapter 2, pp. 33-61
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The Industry Sector Value-Chain
Supplier
Value
Chains
Firm
Value Chain
Channel
Value Chains
(Distributors
or Retailers)
Buyer
Value Chain
Porter M. 'Competitive Advantage' The Free Press,New York, 1985, in Chapter 2, pp. 33-61
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Inter- Organisational Systems
Multi-Organisational Systems
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
1-to-1
m-to-n
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Huband
SpokeSystem
s
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
OrganisationalInformationSystem
Hub
m-to-1-to-n
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Cascading Systems
MaterialManufacturerClothing
ManufacturerWholesalerRetailer
m-to-1-to-n-to-p
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Extra-Organisation
alSystems
OrganisationalInformationSystem
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Supra-Organisational SystemsAlternative Topologies
• Inter-Organisational Systems (1-to-1) • Multi-Organisational Systems:
• Unmediated (m-to-n) Networls• Hub-and-Spoke (1-to-n) Networks
• sector-dominating organisations• intermediated by exchanges, VANs/ISPs• consortia-operated schemes
• Cascading (1-to-1-to-1) Systems (QR, CR, ECR)
• Extra-Organisational Systems
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Supra-Organisational Formsto Match the Systems
Topologies
• Contracts for:• Procurement• Distribution
• Strategic Alliances or Partnerships
• Outsourcing
• Franchising
• Project Teams• Task Forces• Joint Ventures• Consortia• ...
• Virtual Organisation
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Cameron’seBusiness Collaborative Project
LifecycleTM
ProductSelection
PostImplementation
Review
Evaluationby Potential ParticipantsInitiation
of ProposalTesting
CertificationDevelopment
2. Initiative Development(Traditional ebusiness lifecycle) 3. Take-up
&Implementation
DesignProject Planning
Participant Commitment1. Collaboration Formation
& Maintenance
Establishment of
Collaboration
Collaboration Maintenance
ProjectEstablishment
ProjectAnalysis &Evaluation
Cameron J. (2005) 'Ten concepts for an ebusiness collaborative project management framework ' Proc. 18th Bled eConf., Bled, Slovenia, June 2005
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Cameron’s Ten Concepts form>Business Collaborative
Projects• Levels of
Collaboration:
• Management Functions:
• Meta Factors:
• Participant• Team• Representative
• Collaboration Formation and Maintenance
• Initiative Development• Take-up and Implementation
• Motivation• Capability• Communication• Coordination
Cameron J. (2005) 'Ten concepts for an ebusiness collaborative project management framework ' Proc. 18th Bled eConf., Bled, Slovenia, June 2005
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Prof. Niels Bjorn-Andersen, February 2005THE VISION ABOUT AMBIENT ORGANIZATIONSCopenhagen Business School / Sydney Universityhttp://www.econ.usyd.edu.au/download.php?id=3797
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The Objectivesof eCommerce and of
m>Business Survive and Flourish through:• Effectiveness in achieving organisational
objectives such as profit, market-share, growth; delivery of services, social control
• Efficiency, i.e. low resource consumption in relation to the value of the outcomes
• Flexibility over the short term
• Adaptability over the medium-term
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From Virtual to Ambient Organisation
Virtual Organisation(the e- Era)
• multiple, known locations• less hierarchy, more team• adaptive business processes• adaptive business product• semi-planned muddling-
through• fluidity & instability as a virtue• uncertain organisational
integrity• need for a trust framework
Ambient Organisation(the m> Era)
• location fluidity√√√√
• instability inherent√√√√√√
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Lesson 2 from eCommerce DISTRUST is a Major
Impediment
• Lack of power• Benefits accrue to others• Lack of incentive to adopt• Incentives to adopt are quickly withdrawn• eBusiness is used by powerful
organisations to:• reduce service-levels• transfer cost and effort to others
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TRUST
confident relianceby one party
on the behaviour of other parties
OriginsFamilial and Social Settings
Trust in Organisational SettingsWhat you depend on when no other form of risk amelioration strategy is available
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DISTRUSTconfident reliance
by one partyon the MISbehaviour of other parties
DisTrust in Organisational SettingsWhat you expect – the worst
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Sources of Trust• Direct Relationship
kinship, mateship, principal-agent, contract, multiple prior transactions
• Direct Experienceprior exposure, a prior transaction
• Referred Trust'word-of-mouth', reputation, accreditation
• Symbols of Trust or Images of Trustbrands, meta-brands
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Market Participants
Sellers/Buyers Tradable Items Buyers/SellersAgents / Brokers Marketspace Operator Agents/Brokers
Services Providers Processes Infrastructure
MSOS / BB / STITITITIAASPSPSP
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Price-Setting as a (Dis)Trust Factor
• Price Pre-Set by the Seller:• Shop Point-of-Sale• Catalogue-Sale
• Price Pre-Set by the Buyer:• ‘Reverse Auction’
• Mechanism Driven by the Buyer:• RFQ/RFT/EOI-RFP
• Mechanism Driven by the Seller:• Open Auctions
• Negotiation Process
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Risk Locations in Marketspaces• Default by a Party
• The Seller• The Buyer• An Agent• A Service-Provider• The Marketspace Operator
• Quality• The Tradable Item• The Fulfilment Process
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Trust Issues Among Partnersin Ambient, m>Business
Organisations
• Multiple, Fluid Locations – ‘hello! hello?’
• Less Hierarchy, More Team – ‘which team was that again?’
• Adaptive Business Processes – ‘what undertakings?’
• Adaptive Business Product – ‘what specification?’
• Semi-Planned Muddling-Through – ‘but that was then’
• Inherent Fluidity & Instability – ‘what contract terms?’
• Highly Uncertain Organisational Integrity – ‘who?’
=> An Enormous Need for a Trust Framework – ‘a what?’
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Foundations for Confident Reliance
Among Business Partners in Ambient, m>Business
Organisations
Each Player’s• Track Record• Expertise• Findability• ‘Substance’• ‘Commitment’• ‘Involvement’• Control of Expertise
‘Guarantees’ About:• Confidentiality• I.P.
• Relative Sizes• Relative Contributions• Relative Market Power• Exercise of Market
Power