Melanie Fritz 7
Figure 2. Principles of transaction decision making
In a given transaction situation, an individual perceives potential risks and hazards, gains as
well as trust and control mechanisms. It is important to note that this perception is socially con-
structed, that psychological elements guide responses to risks, and that available information
influences an individual’s perception, decision, and behavior (see Lobb, 2005; Verbeke, 2005).
As a consequence, the individual’s perception of information communicating trust signals and
control mechanisms is the key to the transaction decision. To influence the decisions and trans-
action behavior, the existence and communication of trust and control is necessary. In case per-
ception and reasoning leads to confidence in the transaction, it is going to be realized and the
transaction decision is taken (see also Tan, Thoen, 2001). Results and experiences from the
transaction influence the next transaction decision by creating a generalized expectancy, expe-
rience is then an alternative to information (Selnes, 1998, Lorenz, 1999). Repeated transactions
leading to business networks are also social networks of personal relationships between busi-
ness partners influencing their decisions due to trust and social control from “social embedded-
ness” in a society’s values and moral ideas (Granovetter, 1985; Etzioni, 1988).
3.2 Transaction process phases
The e-commerce due diligence should support the appropriate design of the transaction process
according to the information and communication requirements coming from the decision mak-
ing principles. To contribute to the solution of the complex problem of identifying appropriate
information content for the transaction phases and to provide the optimal way of communica-
tion during the transaction phases, including the demands from different transaction scenarios,
contributing scientific research areas were identified (see table 1).
It is important to note that the information and negotiation phases take place before the actual
transaction and lead to the decision for the transaction, that the settlement phase involves the
actual exchange of goods and money, and that the after-sales phase occurs after the transaction
has been carried out involving services and activities in case the buyer is not satisfied with the
product. For the development of the e-commerce due diligence it is of fundamental importance