Executive Summary

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E-commerce–which is the sharing of business information, maintaining business relationships, and conducting business transactions by means of telecommunication networks–is growing at an exponential rate. The hype and growth of the Internet has attracted the growth of online B2B relationships. Internet business, in the United States alone, is forecast to increase as high as $7.3 trillion in 2004 (Gartner Group, 2000). Alternatively, the spatial and temporal separation between business partners generates an implicit uncertainty around online transactions. Uncertainties may arise when trading partners encounter barriers in communication (such as incompatible e-commerce systems, or lack of uniform standards) that may lead to conflicts. E-commerce adoption, unlike traditional information systems adoption, demands high levels of negotiation, cooperation and commitment from participating organizations. Selecting transaction sets, negotiating legal matters and defining performance expectations can burn up hours of staff time and also demand financial and technological resources. Managers have often cited a lack of trust as the main reason for failed business relationships. O’Hara-Deveraux and Johansen state that “trust is the glue of global work space and technology does not do much to create relationships” (1994, pp. 243-244). One way to ensure security and success of e-commerce is to establish trustworthy business relation-ships. This chapter aims to discuss the importance of trustworthy business relationships as a means to mitigate risks in EDI in the Australian automotive industry.

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