The Challenges of Trust Management Your Name CMGT/430 July 10, 2011

Distributed Trust Management
What is distributed trust management? Why do business-to-business (B2B) companies like EBay and PayPal have such profitable success with online transactions? Do people trust business-to-consumer (B2C) methods? Have intra-enterprise applications matured to the level of satisfaction that company executives come to expect? These questions are at the forefront of consumers and business minds alike. This paper will focus on the ideas and cornerstones that inter-organizational companies rely upon; namely, trust. All of these questions boil down to trust and the business models we, as a community, have come to expect. The definition of trust, as it relates to the enterprise, is explained this way: A type of expectation that alleviates the fear that one’s exchange partner will act opportunistically (Aoyama & Ratick, 2007). Ratnasingam & Phan define trust as “A psychological trait found in trading partners who are willing to pursue relationships or interdependencies to achieve a planned goal” (Ratnasingam & Phan, 2003). Trust within the business realm becomes something that is taken for granted if there are no checks and balances between both organizations. One has to be careful not to abuse the trust given to a specific company like Cisco Systems or Amazon. Maintaining a competitive and working relationship is paramount to the success of online businesses like PayPal and Amazon. These companies rose up from the dotcom balloon burst to take the world by storm. One way they were could gain such vast popularity is through online transactions.
Online transactions helped smaller businesses gain a foothold and obtain storefront advertising via companies like Google and Amazon. These companies, in turn, used secure online transactions via PayPal and Google checkout to make secure transactions. All of these companies operate on a business-to-business and business-to-consumer relationship. To answer one of the questions above, do people really trust B2C methods? I believe most people and small businesses do. For the most part, the smaller mom and pops type shops really have no choice. In order for these small companies to stay in business they rely upon online storefronts and online companies like PayPal and Amazon to handle the flow of money and merchandise. B2B methodologies rely on technology to keep things honest between companies.
Technology plays a major role when it comes B2B transactions. When speaking of technology one immediately thinks of security. The only way for a business to make secure transactions is to have the latest and greatest security software and hardware at their disposal. Without the proper control methods and encryption techniques in place like digital signatures, and encrypting algorithms such as Public Key Infrastructure (PKI), how can any business expect to gain the trust of its customers or business partners? Companies that employ properly implemented PKI technology and digital certificates have less chance of becoming the victim of fraudulent activities (Ratnasingam & Phan, 2003).
PKI allows several technologies to be used when creating online transactions. One can think of PKI as a placeholder allowing a tree of trust to be created through the methods listed below: 1. SSL 2. IPSEC 3. Strong Authentication 4. Digital Signatures 5. S/MIME 6. Code Signing 7. VeriSign 8. Thawte
Corporations must also have routine audits and implement and enforce ethics within the business model. This can only be accomplished if upper management is intimately involved from the beginning of the relationship. Organizations must also maintain a robust business continuity plan (BCP). Having a well thought out BCP in place is essential if disasters strike like acts of terrorism or acts of God. The way for long-term E-commerce relationships to keep lasting trust is to have and maintain several notable E-commerce methodologies, these are: authentication, confidentiality, nonrepudiation, availability, and data integrity. Other expected results of trusted business relationships are that the quality of merchandise and services increase as the level of trustworthiness increases. These are the cornerstones to the success and longevity of any lasting business relationship.
Once trust is established one can expect that level of trust to grow. Ratnasingam & Phan mention three levels of trust that B2B models follow. These levels of trust are competence, predictability, and goodwill trust. Each level grows from the previous stage. Competence trust flows to predictability and then to goodwill trust. Once the echelon of goodwill trust is reached one can say that both parties have reached the highest level of expectations when it comes to business transactions and dealings (Ratnasingam & Phan, 2003). In order for these levels to be reached and surpassed companies must be able to perform according to their contractual agreements and stand behind their products well beyond delivery. Organizations must also be financially stable. Companies that are financially stable and are proven in the financial sector, over several years, will look more attractive to prospective clients when it comes new relationships and business.
Organizations that have a lasting trust established are always looking for ways to improve their competitiveness. Hardware and software upgrades are one example of how to stay competitive. If a corporation’s portfolio and stance is constantly critiqued and reviewed then improvements will be found. Technology is constantly evolving and advancing. With the advances comes the uncertain factor of keeping a tight ship. Security must be at the forefront of any E-commerce business and always be kept up to date. Having a robust web presence that is culturally diverse and secure will help the business stay competitive across social and national barriers. One final recommendation to establishing a 360-degree level of trust is customer support and training.
Customer support and training are areas where many companies lack a complete consumer and commercial based system of support. Speaking as a consumer, not being able to find a contact number quickly or getting a recording becomes very annoying. Sometimes it is impossible to find a contact number for a company. If there are no contact numbers then hopefully the online support is up to par. It is important to have open lines of communication between corporations and consumers as well as business-to-business solutions. Online trading partner support services and networked commerce solutions are great examples of how B2B’s might mitigate support issues. Ratnasingam & Phan gives an example of E-Commerce company Cisco Systems and how 70 to 80 percent of Cisco’s business comes from E-Commerce, which represents 92 percent of total revenue or approximately $25 billion annually (Ratnasingam & Phan, 2003).
There are several factors that corporations must follow in order to be successful when dealing with B2B and B2C relationships (Ratnasingam & Phan, 2003). These factors are listed as: 1. Creating and maintaining a high quality of standards and best business practices. 2. Having excellent online and phone support. 3. Maintaining B2B partnership trust through competent employees and training. 4. Following strategies geared towards a successful and collaborative B2B policy. 5. Making sure executives and top management are in line with B2B policies and procedures.
The key to a successful B2B and B2C relationship is gaining the trust of the partnering enterprise and its customers. By having a robust and honest system of transactions, one can expect the three levels of trust to be earned. Having a robust governance system in place will lead to high-quality standards and best business practices which leads to competence trust, predictability trust, and finally goodwill trust.

References
Aoyama, Y & Ratick, Samuel J. (2007). Trust, Transactions, and Information Technologies in the U.S. Logistics Industry. EBSCO Source: Economic Geography, April 2007, v. 83, Issue 2, pp. 159-80
Ratnasingam, Pauline & Phan, D Dien (2003). Trading Partner Trust in B2B E-Commerce: A Case Study. EBSCO Source: Information Systems Management; Summer 2003, Vol. 20 Issue 3, p39, 12p, 1 Black and White Photograph, 1 Diagram, 3 Charts