The development of electronic trading between construction firms
, PhD thesis, University of Salford.
Electronic Trading is a business relationship that relies upon the use of computer and
telecommunication technology for information exchange. In order to understand the
development of electronic trading between construction firms, the CONNET model was
developed. This model identifies the factors and variables determining whether firms
adopt electronic trading systems, and its configuration. The model is grounded in the
relationship perspective and network approach, and assumes that there is mutual
commitment and an economic rationale behind the development of electronic trading.
The CONNET model explains that electronic trading systems emerge from the complex
interplay of three major factors. These are: a) the relationship between the two firms,
i.e. what is exchanged (information, product, financial, social) and how
(power/dependence, co-operation, closeness, mutual expectations); b) the business and
IS/IT strategies, and the organisational and IT infrastructures and processes of each of
the firms; and c) the characteristics of the web of relationships - production network, in
which the firms are embedded, i.e. interconnections, input-output structure, governance
structure and territoriality.
In order to validate the model, six case studies were conducted in construction situations
and four in automotive and retailing situations. Analysis of the data collected concluded
that some variables have a more important role in the adoption decision, e.g. social
contacts, business strategies or territoriality. Other variables are influential on the
adoption but more important on the configuration of the systems, e.g. TT strategies and
organisational and IT infrastructures. Most variables have an influence on both the
adoption decision and the configuration of systems, e.g. information and finance
exchanges, co-operation, individual interconnections, or governance structure, though
the importance of their influence varies.
It was concluded that, in general, electronic trading and sophisticated systems emerge
where there is a higher concentration of enabling factors. The implications of the
validated model lie in its potential use in explaining when and how electronic trading is
likely to occur in construction. By exerting influence over variables in the model it can
be used by construction organisations to create an environment to encourage electronic
trading to take place.
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