Contributions to an Electronic Institution Supporting Virtual Enterprises' Life Cycle

Abstract

Electronic commerce competitiveness, due to market openness and dynamics, enabled the arising of new organizational structures, as it is the case with virtual enterprises. The virtual enterprise (VE) concept can effectively answer to new demanding market requirements, as it combines the core competencies of independent and heterogeneous enterprises that collaborate in a temporary and loosely linked network, thereby presenting high flexibility and agility. However, institutional and social laws must be introduced here to enforce and regulate individual enterprises’ behavior. An electronic institution is a framework that enables through a communication network automatic transactions between electronic business parties, according to sets of explicit institutional norms and rules. This chapter presents and discusses tools for automatic negotiation and operation monitoring that make an electronic institution a suitable framework for helping in the two most important stages of a VE’s life cycle: formation and operation. Moreover, the electronic contract concept is defined and discussed.