A Study of Sourcing Channels for Electronic Business Transactions.

Author List: Yoo, Byungjoon; Choudhary, Vidyanand; Mukhopadhyay, Tridas;
Journal of Management Information Systems, 2011, Volume 28, Issue 2, Page 145-170.
There are two popular forms of business-to-business (B2B) marketplaces: public marketplaces and private channels. We study why firms choose either or both of these sourcing channels. Using a framework of decision making under uncertainty, we explain firms' choice of B2B channels as a hedging strategy and as a method of obtaining greater managerial flexibility for the future. We show that greater uncertainty can lead to higher investment with firms more likely to invest in both public and private channels. We find that the level of information technology (IT) capability and spending is an important factor in firms' decision making. When a firm chooses its level of IT investment simultaneously with the decision about which sourcing channels to use, the firm choosing both channels selects the highest level of IT capability and the firm implementing only one channel selects lower levels of IT capability.
Keywords: analytical modeling; B2B e-commerce; decision making under uncertainty; economic theory; IT capabilities; managerial decision making; private channels; public marketplaces
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#271 0.162 technology investments investment information firm firms profitability value performance impact data higher evidence diversification industry payoff return findings decisions greater
#23 0.145 channel distribution demand channels sales products long travel tail new multichannel available product implications strategy allows internet revenue technologies times
#8 0.141 decision making decisions decision-making makers use quality improve performance managers process better results time managerial task significantly help indicate maker
#59 0.118 capabilities capability firm firms performance resources business information technology firm's resource-based competitive it-enabled view study value infrastructure results organizational model
#79 0.090 public government private sector state policy political citizens governments contributors agencies issues forums mass development organizations issue differences economic study
#74 0.077 high low level levels increase associated related characterized terms study focus weak hand choose general lower best predicted conditions implications
#47 0.074 outsourcing vendor client sourcing vendors clients relationship firms production mechanisms duration mode outsourced vendor's effort activities in-house managing technology domestic
#101 0.071 edi electronic data interchange b2b exchange exchanges interorganizational partners adoption transaction trading supplier factors business suppliers impact network commerce efficiency