The Impact of Trust in Virtual Enterprises

The Impact of Trust in Virtual Enterprises

T. T. Wong (Hong Kong Polytechnic University, Hong Kong) and Henry C.W. Lau (Hong Kong Polytechnic University, Hong Kong)
DOI: 10.4018/978-1-59140-032-5.ch010
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Abstract

The nature of work is changing–to adapt to the global market. Many enterprises will concentrate on core activities and outsource other services to those with specialist expertise. Outsourcing is one way in which the pool of available knowledge can be enlarged and enhanced. Virtual enterprises are likely to rely on such knowledge to meet customers’ demands on a customer-built or small batch production basis. Although information technology plays an important role in linking the core company with its partner companies, it remains subservient to the humans that form the virtual enterprise. For effective knowledge management, it is clear that the electronic handshake would need to be based on trust between partner companies as well as the correct protocol. However, current practice showed that trust between top management teams was rarely considered in the selection of partner companies. A review of the relevant literature indicated that neither scholars nor practitioners agree on a single model of inter-firm trust that applies to all partner evaluation contexts. Hence a decision support system based on neural network and data mining technologies is proposed. A case example is used to illustrate the feasibility of incorporating inter-firm trust in real industrial situations.

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