Eric van Heck

Reengineering the Dutch Flower Auctions: a Framework for Analyzing Exchange Organizations

This paper specifies a generalizable model of exchange processes and develops a processs takeholder analysis framework to evaluate alternative market designs. This framework is applied to analyze a number of information technology initiatives in the Dutch flower markets. The Dutch flower auctions are the worlds leading centers for trading cut flowers and potted plants. We undertake a cross-case analysis and apply our framework to analyse successes and failures in the introduction of new IT-based trading mechanisms in these markets. Based on our study, we develop a number of testable propositions on: the separation of physical and informational processes in trading, the responses of stakeholders to changes in available information due to IT initiatives, and economic and incentive conditions required for adoption of new trading processes. Finally, our detailed cases illustrate the institutional and incentive constraints, and complexities encountered in the introduction of new electronic markets.

Smart business networks: how the network wins

Realizing scenarios in which business is conducted through a rapidly formed network with anyone, anywhere, anytime regardless of different computer systems and business processes.

Experiences with electronic auctions in the Dutch flower industry

1 electronic markets is expected to grow rap1 point of view by Davis and Holt (1993), Hendricks and Por te r (1988) , a n d Rothkopf and Harstad (1994). More recently, the flower auction markets were investigated in more detail. Ajit Kambil and Eric van Heck (1996) specified a generalizable model of exchange processes and developed a process-stakeholder analysis framework to evaluate alternative market designs. In this framework, see figure 1, five trade processes (search, valuation, logistics, payments and settlements, authentication) and five trade context processes (communications and computing, product representation, legitimation, influence, and dispute resolution) are distinguished.

The importance of product representation online: empirical results and implications for electronic markets

We investigate the effects of online product representation at a large Dutch flower auction that implemented screen auctioning. In screen auctioning, flowers are not physically shown to the buyers anymore; instead, an image is presented on a screen to buyers in the auction hall. This online product representation entailed a decrease in information about flower quality compared to the physical product representation. Analysis of the transaction data before and after screen auctioning revealed lower prices after the introduction of screen auctioning. We conclude that deficient product representation may be a partial explanation for reduced prices in electronic markets.

The emergence of smart business networks

This article introduces the novel concept of smart business networks. The authors see the future as a developing web of people and organizations, bound together in a dynamic and unpredictable way, creating smart outcomes from quickly (re-) configuring links between actors. The question is: What should be done to make the outcomes of such a network ‘smart’, that is, just a little better than that of your competitor? More agile, with less pain, with more return to all the members of the network, now and over time? The technical answer is to create a ‘business operating system’ that should run business processes on different organizational platforms. Business processes would become portable: The end-to-end management of processes running across many different organizations in many different forms would become possible. This article presents an energizing discussion of smart business networks and the research challenges ahead.

Information quality, trust, and risk perceptions in electronic data exchanges

This study investigates the influence of information quality, trust and risk perceptions on the expected transaction performance of inter-organizational data exchanges and on the user intent to continue using the exchange. This study provides empirical evidence on the distinctive influences of information quality on competence-trust, goodwill-trust, exchange-risk and relationship-risk and how these different dimensions influence the intent to use inter-organizational data exchanges. As the performance of a data exchange may vary according to degree of successful completion of a specific transaction on the spot, this study also examines the extent to which expected transaction performance affects the model relationships. A survey is conducted to collect data from 221 business professionals. The studys hypothesized relationships are in general supported by the data and the resulting structural model proved to adequately represent the construct relationships. While these findings contribute to information system design theory, they also benefit professionals by providing insights as to how organizations can deal with the different types of uncertainties related to participating in electronic data exchanges. In addition, these findings help demonstrate the importance of interventions in the design of electronic data exchanges and the benefits expected by enhancing information quality in those settings. Highlights? Influence of information quality on the intent to use inter-organizational exchanges ? Evidence on how information quality affects trust and risk in I-O exchanges ? We examine mechanisms of competence-trust and goodwill-trust. ? We examine mechanisms of performance-risk and exchange-risk in data exchanges. ? We examine mediation influence of transaction performance, novel in the model.

Business Network-Based Value Creation in Electronic Commerce

Information technologies (IT) have affected economic activities within and beyond the boundaries of the firm, changing the face of e-commerce. This article explores the circumstances under which value is created in business networks made possible by IT. Business networks combine the capabilities of multiple firms to produce and deliver products and services that none of them could more economically produce on its own and for which there is demand in the market. We call this business network-based value creation. We apply economic theory to explain the conditions under which business networks will exist and are able to sustain their value-producing activities. Informedness has the potential to increase the complexity of consumer demand. Addressing this demand requires flexible production and delivery of products and services, and can be achieved by value-adding business networks supported by IT, standardized technology, and business process solutions. We also examine the benefits associated with business network-based value creation and fair value-sharing to support the sustainability of business networks. We develop a set of propositions and draw upon multiple case examples from the travel and hospitality industry to validate our theoretical perspectives on business network-based value creation. The results demonstrate that this industry is going through a digital transformation that makes it possible for many firms to engage in highly effective and innovative network-based value creation.

Reflections and Projections on Creativity in Operations Research and Management Science: a Pressing Need for a Shift in Paradigm

This paper is an outgrowth of a talk given at a plenary session of the national meeting of ORSA/TIMS (now INFORMS) in May of 1996. Rather than speculate on what might be the possible domain of OR/MS within a systems framework, the paper gives a sketch of what basic ideas there are today that can help us get to a unified mathematical theory of the subject. The concept of influence occurs in all fields of knowledge-from physics, with its gravitational and electromagnetic influences, to sociology with its societal, political, economic, and technological influences. We argue that influence, a sensed, perceived or inferred stimulus, is the single most central concept for analyzing causal relations in OR/MS problems. Problem solving is contextual and focuses on the distribution of influence in allocation, queuing, inventory, and similar problems by manipulating measurable quantities. Because most influences are abstract and intangible, emphasis on creating structures to represent and measure the flow of influence of intangibles and their propagation is critical for the development of a general scientific theory for OR/MS, more critical than in any other field because our problem domain is very general and interdisciplinary. The paper advocates the need for a systemic integration of the diverse approaches used in OR/MS within a single framework for all areas, including dependencies and feedback among influences to maintain the full integrity of the problems we solve. Examples and illustrations are given together with observations about the use of creativity and intelligence to move the process of creating a theory beyond the traditional process of problem solving.

Supporting Decision Making in Technology Standards Battles Based on a Fuzzy Analytic Hierarchy Process

In many markets, battles are fought over technology standards. Often, these battles result in a single standard that achieves dominance. Decision making in standards battles is complex due to the lack of insights about the factors that influence the outcome of such battles. These include the characteristics of the standard, the stakeholders, the standard supporters, and the standard support strategies. The importance of these factors determines the dominance of a technology standard. This study investigates the usability of a multiattribute utility approach named fuzzy analytic hierarchy process in decision making in technology standards battles. Three technology standards battles are analyzed using a fuzzy analytic hierarchy process approach. The empirical results show that the outcome of these standards battles is not fully characterized by path dependency, but that factors for standard dominance can be used to explain the outcome of these battles. We show that it is possible to model the process of standard selection. The fuzzy analytic hierarchy process decision support tool is useful to determine the relative weight of factors for standard dominance, and can be successfully used in decision-making problems relating to standardization.

Local adaptations of generic application systems: the case of Veiling Holambra in Brazil

This paper focuses on local adaptations, referring to the significant or subtle changes local firms make in their local business processes and rules in order to fit with a generic application system, and to the changes they make in the features of a generic application system. Local adaptations are therefore bidirectional in nature. Although several studies stress the importance of local adaptations for the overall success of information technologies (IT) used across locations, more research is needed regarding what kind of local adaptations are required for a particular generic application system to work well in particular localities. The nature and extent of local adaptations are still poorly understood. This paper provides a concrete illustration of a historically situated local adaptation: the case of Veiling Holambra. This Brazilian cooperative has imported a generic auction marketplace model from Holland and adapted it to local conditions, to succeed in a globalized and competitive flower market. Using concepts drawn from studies on globalization, cross-cultural implementations, and IT-based organizational change literature, we put forward three propositions that help to explain the success of local adaptations. The results of our case study indicate that the immigration of Dutch people was critical for bringing knowledge of cooperative structure and flower production to Holambra and led to a relatively small design-use gap. The ability to take local, contextual requirements into account without neglecting the ‘generic’ knowledge led to the successful implementation of the generic auction model. This mutual influence was particularly enabled by the Brazilian culture of improvization.