Center for IT and e-Business Management

Consortia-Based E-Business Standardization Research

Summary of Previous Standard-Related Research Projects

Our group has been working in industry-specific e-business standardization over three years. Below, we briefly review our previous and ongoing research projects.

*“The Adoption and Diffusion of Vertical E-Business Standards”:
In this project, we conducted a firm-level cross-sectional survey of 102 firms from 10 industrial groups. We found that Vertical Standard Consortia (VSC) play a critical role in promoting e-business standards. We identify VSC attributes that influence firms’ intention to adopt and deploy standardized inter-organizational systems. The resulting paper, “The Adoption and Diffusion of Interorganizational System Standards: the Role of Standards Development Organizations”, by Nelson and Shaw (2003), has been presented at the
MIS Quarterly Special Issue Workshop in 2003 and is currently under review at a major academic journal. As a complement, it is intriguing to explore how VSC attributes influence firms’ strategic decisions at the development stage.   

*“Vertical E-Business Standards And Standards Developing Organizations: A Conceptual Framework”:
In the second project, we identify the uniqueness of vertical e-business standards from the standard making perspective; explain why the consortium-based mechanism is popular among vertical e-business standardization projects; and overview the relevant existing literature on consortia-based standardization. This project helps us establish the theoretical foundation of the research framework in this proposal. The corresponding paper (Zhao et al. 2005) has been published in Electronic Markets, a leading academic journal in e-business.

*“An Integrated Model of Consortia-Based E-business Standardization: Collaborative Development and Adoption with Network Externalities”:
We build a game theoretical model to study the endogenous formation of industry standard consortia. The model explores two types of interactions between the standard development stage and the adoption stage. First, the developers’ payoff depends on the total number of total adopters—the more the adopters, the better value of the standard to the developers who are the first adopters. The second type of interaction comes from the collective development of standards, where the adopters’ payoff increases with standard quality, which is the developers’ aggregate contribution. This study concludes that three factors are related to firms’ level of involvement in standard consortia: their valuation of the standard, the development cost, and insider benefits for developers. These findings provide us insights in understanding firms’ motive to work in SDOs. We have presented an earlier version of the paper at Workshop of Information Systems and Economics 2003. The updated paper, “An Integrated Model of Consortia-Based E-business Standardization: Collaborative Development and Adoption with Network Externalities”, by Zhao et al. (2006), is under review at a major academic journal.