Melanie Fritz 9
transaction phases. It shows an example situation with three transactions with their transaction
phases. The first buy of a complex product such as food from a new partner entails a high level
of perceived risk, positive transaction experiences lower the perceived risk in future, repeated
transactions (see Selnes, 1998; Anderson, Weitz, 1989). In order to influence the transaction
perception and decision of the first time transaction between new partners, a different combi-
nation of trust and control elements in the transaction phases T1 ,NT1 , ST1 , and A T1 is required
than in following, repeated transactions.
Transaction 1
Transaction 2 Transaction 3
I Information phase
N Negotiation phase
S Settlement phase
A After sales phase
Figure 4. Dynamically changing transaction phases in repeated transactions
The dynamically changing requirements regarding information and communication of trust
and control in repeated transactions is again interlinked with the dynamically changing situa-
tion of potential risks and gains. E.g., repeated transactions can lead to a more intense coopera-
tion between companies. The creation of a company network is a path dependent process
(Gulati et al., 2000) bringing along the risk of opportunity costs regarding the possibility of
finding other, superior business partners (see Selnes, 1998).
4 Operationalization of the e-commerce due diligence
The e-commerce due diligence has the objective to design the information and communication
during the transaction process to create trust and confidence and to enable electronic transac-
tions with new partners. To operationalize the e-commerce due diligence, trust and control sig-
nals to be communicated during the transaction process course in electronic transactions with a
new partner in food networks (see Figure 5. Determinants for transaction decisions and trust
and control elements in the transaction process phases and its environment5) were derived
from a literature review on trust and control elements in traditional and electronic transactions
(Fritz et al., 2005) and a focus group discussion with experts in business-to-business transac-
tions in the agrifood sector and ICT support potentials (Canavari et al., 2005).
Factors determining the buyer’s and seller’s perception and decision behavior in the transac-
tion include the potential gain and risk for their companies, the companies’ strategies, and cul-
tures. The urgency of the buyer’s supply needs or the seller’s urgency of vending the product
as well as their personal gains, risks, experiences and knowledge levels are additional influenc-
ing factors on the transaction situation. Influencing factors from the transaction environment
are the structure of the industry sector and possible differences in market power, formal regula-
tion, informal “rules of the game”, norms specific to the sector, the product and its characteris-