The Internet, a rapidly expanding global computer and communication infrastructure, has facilitated the emergence of digitization and globalization that in turn has permitted businesses to extensively engage in foreign investments. The reasons for using the Internet include: first considerably reducing the coordination costs involved in inter-organizational transactions. Second, business partners from remote locations are able to communicate and coordinate together using Web services and finally, the widespread adoption of open standards on the Web has greatly reduced the complexities thereby providing flexibility in conducting inter-organizational transactions. According to Forrester Research, e-commerce in the U.S. will grow at 19% reaching $230 billion by 2008. Today firms are attempting to attain their value chain goals by offering and selling products and services in an increasingly competitive market environment. Given the uncertainties of online transactions, Web services encourage the creation of institutional structures for online exchange relationships. Building upon the notion of institutional structures, this chapter examines the role of technology trust that develops through governance mechanisms and provides structural assurances that in turn enhance relationship trust thereby reducing and mitigating risks in Web services.
Key Terms in this Chapter
Authentication: Provides transaction quality of being authoritative, valid, true, genuine, and worthy of acceptance or belief by reason of conformity to the fact that reality is present in Web services.
Technology Trust: The subjective probability by which organizations believe that the underlying technology infrastructure is capable of facilitating transactions according to their confident expectations.
Availability: Mechanisms protect Web services transactions against weaknesses in the transmission media.
Relationship Trust: The subjective probability with which organizations assess that another organization will perform potential transactions according to their confident expectations.
Non-Repudiation: Protects the providers, requesters, and brokers in Web services via acknowledgment procedures.
Best Business Practices: Focus on policies, procedures, standards, and top management commitment that enforces regular audit, and ensures the smooth functioning of Web services.
Integrity: Refers to transaction accuracy and assurance that Web services transactions have not been altered or deleted.
Confidentiality: Refers to the protection of transactions sent and received via Web services against unauthorized reading, copying, or disclosure using encryption mechanisms.
Access Controls: Mechanisms that provide authorization mechanisms thereby assuring that Web services transactions are sent and received without interruption.
Web Services: A modular Internet-based business functions that perform specific business tasks to facilitate business interactions within and beyond the organization.