What Motivates Firms to Contribute to Consortium-Based E-Business Standardization?

E-business standards are a key infrastructure for electronic commerce. In many industries, they are collaboratively developed by firms in an open and neutral industry consortium. It is imperative to understand what drives firms' resource investments in such consortia, as they are critical for the success of e-business standardization. Based on collective action theory, we propose a research model to investigate the drivers of standard development within consortia. We test the model through a data set of 232 firms from 7 consortia. Consistent with collective action theory, our results demonstrate that firms' interests, resource availability, and consortium management effectiveness jointly determine their resource expenditures within the consortium. However, our exploratory investigation indicates differences between vendors and users, as vendors are more motivated by perceived standard benefits whereas users are more motivated by perceived process benefits. Our research provides a deeper understanding of firms' behaviors within consortia and factors driving their standard making.

[1]  K. Lyytinen,et al.  Standard making: a critical research frontier for information systems research , 2006 .

[2]  B. Kogut.  Joint ventures: Theoretical and empirical perspectives , 1988 .

[3]  Izak Benbasat,et al.  Electronic Data Interchange and Small Organizations: Adoption and Impact of Technology , 1995, MIS Q..

[4]  P. David.  Clio and the Economics of QWERTY , 1985 .

[5]  Joseph Farrell,et al.  Coordination Through Committees and Markets , 1987 .

[6]  P. David,et al.  The Economics Of Compatibility Standards: An Introduction To Recent Research 1 , 1990 .

[7]  Robert J. Kauffman,et al.  Proprietary and Open Systems Adoption in E-Procurement: A Risk-Augmented Transaction Cost Perspective , 2004, J. Manag. Inf. Syst..

[8]  Sara Jones,et al.  Trust Requirements in E-Business. A Conceptual Framework. , 1999 .

[9]  Sara Jones,et al.  Trust requirements in e-business , 2000, CACM.

[10]  Peter Moran.  Structural vs. relational embeddedness: social capital and managerial performance , 2005 .

[11]  Erik Brynjolfsson,et al.  Scale Without Mass: Business Process Replication and Industry Dynamics , 2008 .

[12]  K. Vandenbempt,et al.  The impact of trust on strategic resource acquisition through interorganizational networks:Towards a conceptual model , 2005 .

[13]  Marvin A. Sirbu,et al.  Technological Choice in Voluntary Standards Committees: An Empirical Analysis. , 1990 .

[14]  Kenneth L. Kraemer,et al.  Post-Adoption Variations in Usage and Value of E-Business by Organizations: Cross-Country Evidence from the Retail Industry , 2005, Inf. Syst. Res..

[15]  Kenneth L. Kraemer,et al.  Migration to Open-Standard Interorganizational Systems: Network Effects, Switching Costs, and Path Dependency , 2005, MIS Q..

[16]  Peter R. Monge,et al.  Production of Collective Action in Alliance-Based Interorganizational Communication and Information Systems , 1998 .

[17]  Timothy S. Simcoe.  Committees and the Creation of Technical Standards ∗ , 2003 .

[18]  Martin B. H. Weiss,et al.  Free-ridership in the standards-setting process: the case of 10BaseT , 1996, STAN.

[19]  Bernard L. Simonin.  The Importance of Collaborative Know-How: An Empirical Test of the Learning Organization , 1997 .

[20]  Wynne W. Chin.  Partial least squares for IS researchers: an overview and presentation of recent advances using the PLS approach , 2000, ICIS.

[21]  J. Heckman.  Sample selection bias as a specification error , 1979 .

[22]  Michael J. Shaw,et al.  Vertical E-Business Standards and Standards Developing Organizations: A Conceptual Framework , 2005, Electron. Mark..

[23]  Varghese P. George,et al.  From the Bottom Up? Technical Committee Activity and Alliance Formation , 2001 .

[24]  Wynne W. Chin.  Issues and Opinion on Structural Equation Modeling by , 2009 .

[25]  David Knoke,et al.  Incentives in Collective Action Organizations , 1988 .

[26]  Russell Spears,et al.  Put your money where your mouth is! Explaining collective action tendencies through group-based anger and group efficacy. , 2004, Journal of personality and social psychology.

[27]  George T. Willingmyre.  Section 11. International standards at the crossroads , 1997, STAN.

[28]  G. Marwell,et al.  THE PARADOX OF GROUP SIZE IN COLLECTIVE ACTION: A THEORY OF THE CRITICAL MASS. II. * , 1988 .

[29]  Jason L. Dedrick,et al.  How Does Information Technology Shape Supply-Chain Structure? Evidence on the Number of Suppliers , 2008, J. Manag. Inf. Syst..

[30]  B. Latané,et al.  Ten years of research on group size and helping Psychological Bulletin Vol 89 , 1981 .

[31]  Detmar W. Straub,et al.  Structural Equation Modeling and Regression: Guidelines for Research Practice , 2000, Commun. Assoc. Inf. Syst..

[32]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[33]  C. Cargill.  Information technology standardization: Theory, process, and organizations , 1989 .

[34]  M. Olson,et al.  The Logic of Collective Action: Public Goods and the Theory of Groups. , 1973 .

[35]  Michael B. Spring,et al.  Financing the Standards Development Process , 1994 .

[36]  Joseph Farrell,et al.  Choosing the Rules for Formal Standardization , 2002 .

[37]  J. M. Whipple,et al.  Strategic Alliance Success Factors , 2000 .

[38]  J. B. Quinn,et al.  Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry , 1992 .

[39]  Caroline Mothe,et al.  Creating competencies through collaboration:: The case of EUREKA R&D consortia , 2000 .

[40]  Andrew C. Inkpen,et al.  Social Capital, Networks, and Knowledge Transfer , 2005 .

[41]  Naresh K. Malhotra,et al.  Common Method Variance in IS Research: A Comparison of Alternative Approaches and a Reanalysis of Past Research , 2006, Manag. Sci..

[42]  J. J. Po-An Hsieh,et al.  ScholarWorks @ Georgia State University , 2016 .

[43]  M. Lynne Markus,et al.  Industry-Wide Information Systems Standardization as Collective Action: The Case of the U.S. Residential Mortgage Industry , 2006, MIS Q..

[44]  Chris Forman,et al.  Can Vendors Influence Switching Costs and Compatibility in an Environment with Open Standards? , 2006, MIS Q..

[45]  M. Lynne Markus,et al.  Information Technology Standards Choices and Industry Structure Outcomes: The Case of the U.S. Home Mortgage Industry , 2005, J. Manag. Inf. Syst..

[46]  G. Marwell,et al.  The critical mass in collective action , 1993 .

[47]  V. Grover.  An Empirically Derived Model for the Adoption of Customer‐based Interorganizational Systems* , 1993 .

[48]  B Kogut.  Theoretical and empirical perspectives , 1988 .

[49]  Michael J. Shaw,et al.  Interorganizational System Standards Development in Vertical Industries , 2005, Electron. Mark..

[50]  J. Wagner,et al.  Percept-Percept Inflation in Microorganizational Research: An Investigation of Prevalence and Effect , 1994 .

[51]  Viswanath Venkatesh,et al.  Why Don't Men Ever Stop to Ask for Directions? Gender, Social Influence, and Their Role in Technology Acceptance and Usage Behavior , 2000, MIS Q..

[52]  J. Calder.  Survey research methods , 1998, Medical education.

[53]  G. Ahuja.  The duality of collaboration : Inducements and opportunities in the formation of interfirm linkages , 2000 .

[54]  S. Ghoshal,et al.  Social Capital, Intellectual Capital, and the Organizational Advantage , 1998 .

[55]  Dominique Foray.  Users, standards and the economics of coalitions and committees , 1994 .

[56]  Mu Xia,et al.  Sustainability of Vertical Standards Consortia as Communities of Practice: A Multilevel Framework , 2011, Int. J. Electron. Commer..

[57]  G. Marwell,et al.  A Theory of the Critical Mass. I. Interdependence, Group Heterogeneity, and the Production of Collective Action , 1985, American Journal of Sociology.

[58]  Pamela Oliver,et al.  MOBILIZING TECHNOLOGIES FOR COLLECTIVE ACTION , 2003 .

[59]  Véronique Ambrosini,et al.  Using Single Respondents in Strategy Research , 1997 .

[60]  Rob Procter,et al.  User participation in standards setting—the panacea? , 1998, STAN.

[61]  Sidney C. Sufrin,et al.  The Logic of Collective Action: Public Goods and the Theory of Groups. , 1966 .

[62]  Mariko Sakakibara,et al.  Formation of R&D consortia: industry and company effects , 2002 .

[63]  Martin B. H. Weiss,et al.  The standards development process: a view from political theory , 1993, STAN.

[64]  D. North.  Competing Technologies , Increasing Returns , and Lock-In by Historical Events , 1994 .

[65]  Detmar W. Straub,et al.  A Practical Guide To Factorial Validity Using PLS-Graph: Tutorial And Annotated Example , 2005, Commun. Assoc. Inf. Syst..

[66]  G. Huber,et al.  Retrospective reports of strategic‐level managers: Guidelines for increasing their accuracy , 1985 .

[67]  Michael J. Shaw,et al.  An Integrated Model of Consortium-Based E-Business Standardization: Collaborative Development and Adoption with Network Externalities , 2007, J. Manag. Inf. Syst..

[68]  R. Cornes,et al.  The theory of externalities, public goods, and club goods: Externalities and private information , 1996 .

[69]  T. Ravichandran,et al.  Organizational Assimilation of Vertical Standards: An Integrative Model , 2007, 2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07).

[70]  Terry S. Overton,et al.  Estimating Nonresponse Bias in Mail Surveys , 1977 .

[71]  H. James Nelson,et al.  Patterns of Transition: The Shift from Traditional to Object-Oriented Development , 2009, J. Manag. Inf. Syst..

[72]  Vallabh Sambamurthy,et al.  Shaping UP for E-Commerce: Institutional Enablers of the Organizational Assimliation of Web Technologies , 2002, MIS Q..

[73]  Andrew Updegrove.  PARTICIPATING IN STANDARD SETTING ORGANIZATIONS: VALUE PROPOSITIONS, ROLES AND STRATEGIES , 2006 .