Research Context

1. Drakoulis Martakos Assistant Professor Trust and Virtual Communities Research Context Information Systems

2. Information Systems … • … to refer to information and data handling activities in human organizations … Avgerou & Conford 1993 • … are social systems whose behavior is heavily influenced by the goals, values and beliefs of individuals and groups as well as the performance of technology. … is not deterministic … does not fit any formal algorithmic … Angell & Smithson 1991 • … an integrated, user-machine system for providing information to support operations, management and decision making in an organization … Davis & Olson 1983 • … is an application of computing and communication technology to meet a defined need. … is to collect, process, store, transfer and disseminate information. … from and to persons, … measuring and control devices … British Computer Society Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

3. Information Systems Context • Purposefulness • Goal direction and defined needs • Technology • Information and its flow • Relationship with some organization as the hosting environment • Distinct components (procedures, technology, people) Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

4. What, why and how Politics Social Issues Information Systems Applied Research Basic Research Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

5. Environment A possible definition ??? Organization Technology People Procedures Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

6. I.S. Foundation • C. W. Churchman (1976): “The design of inquiring systems” • Checkland P. (1981): “Systems Thinking, Systems Practice” • Hammer M. (1990): “Re-engineering work: Don’t automate, obliterate” • Davenport T., Short J. (1990): “The New Industrial Engineering: Information Technology and Business Process Redesign” • Hammer M.& Champy J. (1993) : “Reengineering the corporation: A manifesto for business revolution” • Winograd T. (1993) “A language/action perspective on the design of cooperative work” • Walsham G. (1993): “Interpreting Information Systems in organizations” • Straub W. (1994): “Normative standards for I.S. research” • Walsham G. (1995): “Interpretive case studies in IS research: nature and method” • ……… Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

7. I.S. community • AIS (Association for Information Systems), • ACM (Association for Computer Machinery), • IFIP TC11 (International Federation for Information Processing) • AIM (Association for Information and Management) • ICIS – International Conference on Information Systems • ECIS – European Conference on Information Systems • AMCIS – America’s Conference on Information Systems • PACIS – Pacific Conference on Information Systems • RSEEM (Research Symposium on Emerging Electronic Markets) • McMaster Business Conference (Canada) Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

8. I.S. Research Design Context Definition Hypotheses Formulation Measurement Instrument Development Measurement Instrument Validation Empirical Testing Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

9. Today’s Lecture … • The research question: • Could we build trust in e_services ??? • To come to an answer… • Trust in Business environments & e-commerce • Trust definition, constructs & building processes • Modeling Trust Formation in E-Commerce Systmes Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

10. Trust in business environment • Relationships • Marketing activities are directed toward establishing, developing and maintaining successful relational exchanges • Trust • Central to all relational exchanges • Key mediating variable for relationship’s success • Marketing tool Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

11. Commitment & trust (16, 17, 18 ΟΧΙ) • Relationship commitment and trust are key mediating variables of relationship marketing (KMV model) • Three determinants of trust • Shared values (κοινές αξίες) • Communication (επικοινωνία) • (non) Opportunistic behaviour(μη ωφελιμιστική συμπεριφορά) Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

12. Customer Relationships & E-Commerce (17) • The customer is in control (έλεγχος από τον καταναλωτή) • Customer acquisition is not enough, ... Relationships … • … new asset category... νέα κατηγορία πόρων • … a capital... κεφάλαιο • … an investment… επένδυση Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

13. Customer Relationships & E-Commerce (18) • Loyalty (αφοσίωση) • Economic necessity (οικονομική ανάγκη) • Competitive necessity (ανταγωνιστική ανάγκη) • Trust (εμπιστοσύνη) • The sine qua non of the digital economy (εκ των ουκ άνευ) • The foundation for loyalty and long-term relationships (Θεμέλιο για την αφοσίωση και τις μακροχρόνιες σχέσεις) Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

14. Trust in E-Commerce (1/2) • Literature survey and categorization • 5 categories • Trust in e-commerce system/applicationΕμπιστοσύνη στα συστήματα/εφαρμογές • Trust in Internet shopping processΕμπιστοσύνη στις διαδικασίες αγορών στο ιντερνετ • Trust in vendorΕμπιστοσύνη στον “πωλητή” • Trust between individualsΕμπιστοσύνη μεταξύ ατόμων • Firm trust in e-businessΕμπιστοσύνη στην ηλεκτρονική επιχείρηση • Trust dimensions:1)Determinants2) Approaches3) Consequences Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

15. Trust in E-Commerce (2/2) • Whilst there is evidence of a general congruence regarding the importance of trust for e-commerce success, most of the current literature revolves around the role of trust for theadoption of e-commerce and does not provide an investigation of the way in which trust can actually be developed and maintained. • The majority of studies mainly focus on understanding the need for trust, its antecedents and consequences and the barriers contributing to the lack of trust, emphasizing the short-term, transactional perspective of e-commerce, and fail to address the formation of trust as a process and as a means for long-term relationship building. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

16. Trust in E-Commerce (2/2) • Αν και είναι φανερή η ομοφωνία σχετικά με την σημασία της εμπιστοσύνης για την επιτυχία του ηλεκτρονικού εμπορίου, το μεγαλύτερομέρος της έρευνας που έχει δημοσιευθεί αφορά στο ρόλο της εμπιστοσύνης για την αποδοχή του ηλεκτρονικού εμπορίουχωρίς να εξετάζει πως η εμπιστοσύνη μπορεί να αναπτυχθεί και να διατηρηθεί. • Η πλειονότητα των ερευνών εστιάζει στην κατανόηση της ανάγκης για εμπιστοσύνη, τις προϋποθέσεις και τις συνέπειες άλλα και τα εμπόδια που συμβάλουν στην απουσία της, με έμφαση στη μικρού χρόνου συναλλακτική μορφή του ηλεκτρονικού εμπορίου και δεν ασχολείται με το σχηματισμό εμπιστοσύνης σαν διαδικασία αλλά και σαν τρόπο δημιουργίας μακροχρόνιων σχέσεων. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

17. Where can we find trust relationships (internet) ?? • Virtual Communitiesi.e…. • … long term computer mediated communication among large groups … • … (1) share a common focused interest (2) get to “know” each other (3) participate over time … • … a group of people that meet … • … people with shared interests … e-communication is the primary way of communication … Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

18. V_communities and E_Business, E_Commerce … • E_Business • The complex fusion of business processes, enterprise applications and organization structure to create a high performance business model … • E_Commerce • Buying and selling over digital media .. • And the connection … : • … business transaction relationship …. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

19. Inter-customer communication Sharing experiences Common interests Feeling of belonging Referrals (συστάσεις) Social aspect of commercial transaction. Enable inter-customer contact to promote trust and relationship building Customer Communities Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

20. What is trust? • “A set of expectations shared by all those in an exchange” - Zucker, 1986 • “A willingness to rely on an exchange partner in whom one has confidence” - Moorman et al, 1993 • “An expectation that alleviates the fear that one’s exchange partner will act opportunistically” - Bradach & Eccles, 1989 • “A set of expectations that tasks will be reliably accomplished” - Sitkin & Roth, 1993 Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

21. Trust constructs • Disposition to trust (προδιάθεση για εμπιστοσύνη) • Institution-based trust (εμπιστοσύνη βασισμένη σε κανονιστικό πλαίσιο) • Trusting beliefs (πεποιθήσεις για την εμπιστοσύνη) • Benevolence (καλή πρόθεση) • Competence (ικανότητα/δυνατότητα) • Honesty/Integrity (τιμιότητα/ακεραιότητα) • Predictability (προσδιορισιμότητα/προβλεψιμότητα) • Trusting intention (πρόθεση για εμπιστοσύνη προς ...) • Trusting behavior (εμπιστοσύνη λόγω συμπεριφοράς ...) based on: McKnight et al., (1996) Dertouzos et al., (1989) Ganesan, (1994) Shapiro, (1987) Zucker, (1986) Williamson, (1991) ………………… ………………… Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

22. What are the trust-building processes ?? • Calculative process (διαδικασία υπολογισμού) • Prediction process (διαδικασία πρόβλεψης) • Capability process (διαδικασία ικανότητας/δυνατότητας) • Intentionality process (διαδικασία πρόθεσης/προδιάθεσης) • Transference process (διαδικασία μεταφοράς) • Credibility process (διαδικασία αξιοπιστίας) Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

23. Summarizing … • Customer trust in an E-Commerce company might … • … be the result of the six trust building processes. • … initially based … • on disposition to trust and on institution-based trust, • on the trusting beliefs about the business, including benevolence, competence, honesty, predictability, • and on a trusting intention towards the business. • … demonstrated by the customer’s trusting behavior and • … influenced by communication, shared values and lack of opportunistic behavior. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

24. Can we build a model for Trust formation in E-Commerce Relationships ??? Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

25. Compression of time and space An interactive environment for service encounters Integrates the separate but partially overlapping functions of: Making Enabling Keeping promises Electronic servicescape Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

26. Transference process Trusting Trusting Trusting Beliefs Behavior Intention Initial trusting beliefs Make the Enable the Keep the Institution- promise promise promise based trust E- Servicescape Disposition to trust Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

27. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

28. Trust formation in e-servicescape Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

29. Can we design the trust formation servicescape • ??? Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

30. Electronic servicescape • Web sites should be transformed to customer-centric servicescapes • An environment offering iterative reciprocal interaction ideal for evolutionary nature of trust formation based on the fulfillment of customer promises • Implemented as a three-dimensional virtual environment using agent technology Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

31. Agents and Virtual Reality • How agent and virtual reality technologies can provide an environment for building trusting relationships? • Realistic spatial representation of the servicescape • Consistency with customer’s mental model of physical experience • Customer navigation and action • Development, communication and delivery of promises Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

32. Agent-mediated virtual servicescape • 3D virtual shopping mall • Each store represents an e-commerce company • populated by avatars representing • Customers • Salespersons • Mall agents • Business agents • 2 levels of interaction – making & enabling promises Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

33. Agent-mediated virtual servicescape • Virtual Reality • 3D virtual environment comprised of virtual stores • Customer and salesperson avatars • 3D virtual products with which customers can interact • Mall agents – Making a promise • Need identification, merchant & product brokering • Present advertising messages • Perform search • Recommend best option • Business agents – Enabling a promise • Product brokering, negotiation • Provide detailed information on products/services • Preview and interact with virtual products Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

34. Environment Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

35. In progress Agent-mediated virtual servicescape Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

36. Disposition to trust Institution-based trust Trusting Intention Trusting Behavior Trusting Beliefs Initial trusting beliefs - Transferred Reputation Enable a promise Keep a promise Make a promise Research Hypotheses H1 H9 H6 H2 H5 H8 H10 H7 H3 H4 Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

37. Disposition to trust H1 Institution-based trust Trusting Intention H2 • H1 A consumer’s trusting intention towards an Internet vendor is positively related to the consumer’s disposition to trust. • H1a A consumer’s trusting intention towards an Internet vendor is positively related to the consumer’s propensity to trust. • H1b A consumer’s trusting intention towards an Internet vendor is positively related to the consumer’s attitude towards e-commerce. • H2A consumer’s trusting intention towards an Internet vendor is positively related to the consumer’s institution-based trust • H2a A consumer’s trusting intention towards an Internet vendor is positively related to the perceived (effectiveness of the legal framework regarding) security of online transactions • H2b A consumer’s trusting intention towards an Internet vendor is positively related to the perceived (effectiveness of the legal framework regarding) privacy of consumer data in online transactions. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

38. Initial trusting beliefs - Transferred H3 Reputation • H3 A consumer’s initial trusting beliefs towards an Internet vendor are positively related to the Internet vendor’s reputation (transference process) • H3a The Internet vendor’s perceived benevolence is positively related to the Internet vendor’s reputation. • H3b The Internet vendor’s perceived competence is positively related to the Internet vendor’s reputation. • H3c The Internet vendor’s perceived integrity/honesty is positively related to the Internet vendor’s reputation. • H3d The Internet vendor’s perceived predictability is positively related to the Internet vendor’s reputation. Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

39. In progress Empirical testing • Laboratory experiment • Simulation of an e-servicescape using agent and virtual reality technologies to provide a virtual e-commerce customer experience • Subjects: University students and academic staff, acting as customers of the virtual e-commerce environment • Data collection through the use of a questionnaire – measurement instrument Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

40. In progress Measurement instrument • An instrument comprised of measures for each construct has been developed to empirically assess the hypothesized causal relationships • Measures were developed to reflect the definition and the dimensions of constructs • Multiple item scales were generated, based on Churchill’s paradigm (1979). • Items were developed as suggested by Straub (1989) • borrowed from existing validated measures • adapted with slight modifications where necessary • A pilot test will be conducted for measurement instrument validation Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

41. In progress Empirical testing • Laboratory experiment • Simulation of an e-servicescape using agent and virtual reality technologies to provide a virtual e-commerce customer experience • Subjects: University students and academic staff, acting as customers of the virtual e-commerce environment • Data collection through the use of a questionnaire – measurement instrument Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

42. In progress Laboratory experiment: Limitations • Construction of experiment, controlled conditions • Context: Restricted laboratory setting, not equivalent to real-world environment • Sample: Computer science background, frequent users of Internet • Validity of findings • Generalisation of findings Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications

43. Questions ??? Drakoulis Martakos – University of Athens, Department of Informatics& Telecommunications