THE DEVELOPMENT OF A FRAMEWORK FOR THE CLASSIFICATION OF TYPES OF B2B EC STRATEGIES

1. INTRODUCTIONIn recent years, the implementation and use of business-to-business (B2B) electronic commerce (EC) in manufacturing firms to procure materials and parts from suppliers has become popular. Usually, the types of B2B EC that can be employed by manufacturing firms are grouped into four kinds: electronic marketplace, electronic procurement, electronic partnership and electronic distribution (Chang and Wong, 2010). However, the classification of these four types of B2B EC has never been based on a concrete and precise criterion or framework. Instead, the four kinds of EC seem to have been roughly taxonomized and proposed in prior studies. Hackney et. al. (2004) classified B2B EC into two types: electronic marketplace and electronic alliances. In some research, electronic partnership was not clearly differentiated from electronic marketplace, and they were considered as the same kind of EC (Son and Benbasat, 2007; Kurnia et. al., 2015). Some other studies did not precisely discriminate electronic procurement from the other types of EC, and the boundary between one type of B2B EC and another kind of EC was likely to be obscure in previous research (Dedrick et. al., 2008; Rai et. al., 2009).It seems that since there has been no concrete framework, which supports the identification and validation of the types of B2B EC, the confusion in the classification of kinds of EC has occurred in prior studies. Previous research has not constructed or developed a framework for the classification of B2B EC, but has only suggested some kinds of EC. If a framework useful for the identification and taxonomization of kinds of EC is developed, a framework can be employed for manufacturing firms to identify and select an appropriate or required type of B2B EC under their circumstances. Researchers can also utilize the framework developed to decide, select and investigate the type of B2B EC, which is fitted with their research intentions or purposes.Two broad categories of B2B EC include EC with suppliers and EC with customers. To develop a framework, this study focuses on EC with suppliers since information flows and cooperation through EC with suppliers are prerequisite conditions for value creation in manufacturing firms (Iyer et. al., 2009). To develop a framework, as classification criteria, this study employs the following two dimensions: degrees of information flow between focal firm and its main suppliers, and suppliers' power. The theoretical bases of adopting these two dimensions as classification criteria are the resource-based theory and transaction cost economics. The principal reasons why manufacturing firms implement B2B EC with suppliers include the fact that they actively want to obtain and utilize their suppliers' knowledge and capabilities, as it were, suppliers' resource through information sharing (Cheng and Fu, 2013; Youn et. al., 2014).According to transaction cost economics, when firms trade with their partners, they try to choose the control mechanism of inter-organizational relationships, which most contributes to the minimization of transaction costs (Barua and Mani, 2014). However, the strength or weakness of suppliers' power affects the amount of transaction costs incurred in inter-firm relationships. Thus, according to the levels of suppliers' power, the relationships with suppliers are differently coordinated and controlled in order to minimize transaction costs (Dekker, 2004). In fact, the manufacturing firms' selection of a type of B2B EC, which works as one of the control devices in inter-firm relationships (Grover and Saeed, 2007), may depend on the degrees of usage of suppliers' resource through information sharing as well as the levels of suppliers' power, which must be controlled for achieving minimization of transaction costs.In this study, based on both the degrees of information exchange between partners and the levels of suppliers' power, a framework for the classification of B2B EC was constructed and proposed. …