Trust and Loyalty in Electronic Commerce, an Agency Theory Perspective

Citation

Jevons, C. (2004), "Trust and Loyalty in Electronic Commerce, an Agency Theory Perspective", Journal of Consumer Marketing, Vol. 21 No. 1, pp. 69-70. https://doi.org/10.1108/07363760410513996

Written in a clear style while maintaining academic rigour, this is a book to inspire thoughtful reflection and further research rather than providing the sort of dubious quick fixes peddled by the once‐over lightly merchants that plague airport bookstalls. Readers will need to have a serious working knowledge of the issues to understand and benefit from the insights delivered by the original research reported in this volume. Although the cover blurb states that the book is aimed at “senior and mid‐level managers and strategic planners, corporate executives … regulatory policymakers, and students …” there will be significant demand for this book from the professional academic market. The publisher, Quorum Books, is known for publishing high quality, thought‐provoking literature for this segment. Karake‐Shalhoub’s book could have readership beyond subject specialists in the area: it reads as an exemplary doctoral thesis, and doctoral programs and libraries could well use it as a resource in this way. Certainly there is more information in the book than the average reader will require, with results of stepwise regression analyses tabulated (p. 183) in the chapter describing the empirical investigation, for example.

Refreshingly, the introduction states that the book is cross‐disciplined in that the evaluative tools of microeconomics are applied to e‐commerce. Most works to date seem to stake a territorial claim for e‐commerce as belonging to their own discipline, rather than specifically defining it as a distinctive field of study. This is a sign of maturity in the study of electronic commerce, clearly stated, and fundamental to the structure of the study. The integrative approach of including various business and other disciplines in marketing research is becoming more common, and this book is a good example of how such a technique can be used successfully.

With approximately 400 citations, mostly peer‐reviewed academic journal articles, in around 200 pages of text, the bibliography is a valuable resource in itself. However, it is in parts a little too comprehensive. For example, it includes a reference to a 1997 survey that found that US Government agency Web sites were mostly simple “electronic address books … few capitalised on the interactive nature of the Internet to conduct public discussions, maintain bulletin boards, or provide information available for download” (p. 42). The Internet, including US government sites, has progressed considerably since that particular study, of course.

There is some coverage of international issues, as befits the international experience of the author, which is particularly important when dealing with the Internet, which so easily transcends national borders. Nevertheless it is clearly a US‐based book, with European and Asian countries described as “foreign” (p. 194), indicating a reduced relevance of the work in those markets. A particular example is the finding relating to the presence of a chief privacy officer (CPO). This is likely to be of less significance in many markets outside the USA, which is generally more laissez‐faire as regards privacy issues than other parts of the world such as the EU and Australia. In Australia, for example, the presence of a CPO is less likely to be a significant trust builder since recent legislation mandates appointment of a CPO for all but the smallest businesses, so in consequence it is not a differentiating factor.

In essence, the book proposes a framework for understanding the mechanisms of consumer trust in e‐commerce exchanges, and it does so by bringing together agency theory from economics and trust and loyalty research from psychology. There are three literature review chapters. Chapter 2 provides a useful review of the branding, loyalty, and trust literature. Chapter 3 investigates e‐commerce, with particular reference to developing and mutating business models. Chapter 4 reviews agency theory from its foundations in information economics in a new e‐commerce context. Chapter 5 describes the method and hypothesis development and Chapter 6 reports the empirical analysis of the theoretical model from a survey of 115 companies, resulting in the development of three particular factors that were found to build trust.

The book will be of professional interest to strategically‐oriented executives in electronic commerce, academics researching in that field, and as an example of how to put together a good report of a major research project.