The Process of Trust Formation in E-Business: Insights from Case Studies of Two Small Firms

Abstract

Purpose: The purpose of this research is to investigate and theoretically explain the process of trust formation in high risk e-business.Methodology/approach: The interpretive case-based approach has been used in this study. Inductive analysis of interview data helped to develop the process model of trust formation in the context of business-to-business e-market transactions by two small firms.Research implications: This research explains how and why trial outcomes influence trust formation. The findings also indicate the importance of the trialing process as a legitimate means of determining trustworthiness of the other party and the e-business platform. These findings add to the existing body of knowledge on trust in e-business and have important implications for further research.Practical implications: The practical implication is that if sponsors of business-to-business e-markets can support initial trials, it would foster trust and lead to more active usage of e-business methods.Originality/value/contribution: This research shows that trust formation in high risk e-business is a dynamic process, influenced by changes in risk perceptions from repeated trial outcomes in initial stages, a departure from prior variance studies with assumptions of static perceptions of risk and trust.