Adoption of multiple electronic marketplaces: Antecedents from a grounded theory study

• Date: 01 December 2020
• Author: Henrik S. Sternberg,Stéphane E. Collignon
• DOI: http://doi.org/10.1111/jbl.12254
• Published date: 01 December 2020

Adoption of multiple electronic marketplaces: Antecedents from a

grounded theory study

St

ephane E. Collignon

1

, and Henrik S. Sternberg

2

1

West Virginia University

2

Iowa State University

To achieve economies of scope, most motor carriers combine long-term contracts with shippers and brokers with periodic spot assignments

found on electronic marketplaces (EMs). While previous research has addressed how carriers adopt an EM, we know little about factors

that inf‌luence carriers to adopt multiple EMs. Given the rise of the platform economy of the trucking industry, we chose to address this gap

and generate mid-range theory on adopting multiple EMs in a logistics context. To do this, we applied grounded theory and conducted 23 inter-

views with motor carriers and EM experts in North America and Europe until we reached theoretical saturation. Our f‌indings reveal that many

motor carriers adopt a portfolio of different EMs, and that their awareness of platforms, expected and realized benef‌its, attitude, and vigilance

determine how they conf‌igure their EM portfolios. The implication for existing theory is that, while previous studies depicted EM adoption

from a single-system perspective, we found that it is actually a continuous selection process that follows a portfolio perspective. Our paper also

has implications for practice in that it illuminates the rationales behind EM portfolio development and identif‌ies actionable factors that can help

managers conf‌igure stronger portfolios.

Keywords: electronic marketplaces; grounded theory; motor carrier industry; technology adoption; marketplace portfolio

INTRODUCTION

For motor carriers to prosper, capacity utilization is crucial; to

achieve it, they must successfully manage assets and strike

freight deals in a way that combines weight and volume, opti-

mizes routes and assignments, and reduces empty vehicle reposi-

tioning (Suzuki and Lu, 2017). To achieve these economies of

scope, most carriers use a combination of long-term contracts

and spot contracts (Scott et al. 2017; Scott 2018) found via elec-

tronic marketplaces (EMs) (Caplice 2007). As digitization and

the platform economy increasingly gain a foothold in the motor

carrier industry (Cannon and Summers 2014; Castillo et al.

2018), it is increasingly important to understand how carriers

adopt and use these EMs. In the United States, EM use is fueled

in part by the growing pressure on motor carriers’planned and

spot activity stemming from low margins and changing regula-

tions (including on electronic logging devices) (Scott et al.,

2019), while in Europe, EM use offers a way to address and take

advantage of continually changing international transport regula-

tions (European Commission, 2011; Sternberg et al., 2015).

Recent literature has addressed the effects of prices and capaci-

ties on the spot market (Scott et al. 2017; Scott 2018), generally

viewing the spot market as a singular entity. However, the ways

in which carriers tap into spot markets has received sparse atten-

tion in the literature (Scott 2018). Apart from a few aged contri-

butions (e.g., Caplice and Sheff‌i, 2003; Goldsby and Eckert,

2003; Caplice 2007), EMs in the motor carrier context represent

a white f‌ield in supply chain, logistics, and information systems

research, and lack a theoretical base from which to conduct

empirical research. Wang et al. (2007) and Kale et al. (2016)

point at that gap, highlighting the scarcity of EM research in the

motor carrier context. Conversely, information systems literature

prolif‌ically covers EM adoption and use, but does so almost

exclusively at the system, rather than the company, level (Stand-

ing et al. 2010). Hence the literature generally ignores the factors

that inf‌luence carriers to adopt multiple EMs.

According to Ward et al. (2019) U.S. businesses spent $1.635

billion USD on logistics in 2018. Typically, 90% of transporta-

tion spending is procured in the form of long-term contracts

(Helguera S

anchez and Hendra Mukti, 2018). The remaining

10% is spent on short-term assignments, either through one of

the 17,723 registered freight brokers (Mordor Intelligence, 2019)

or through EMs, testifying to the importance of understanding

the latter’s adoption and usage Motor carriers use a varying num-

ber of EMs; in our sample, carrier usage ranged from zero to six

EMs. While previous literature on EM adoption is extensive, it

has not explored the nature of multiple-system adoption. While

previous literature on EM adoption is extensive, it has not

explored the nature of multiple-system adoption. Currently, EMs

and brokers compete in a shifting landscape, meriting exploration

of the changing landscape (Scott 2018). Furthermore, most previ-

ous literature has looked at EM adoption from a traditional buy-

ing f‌irm or high-level perspective (Skjøett-Larsen et al. 2003).

To address this, our paper aims to answer the question:

What explains the adoption of multiple EMs by motor

carriers?

Our goal in exploring this question was to generate midrange

theory and propositions for future empirical research on EM

adoption in logistics by taking the carriers’perspective. We

chose grounded theory as our framework because it allows

researchers to investigate phenomena or new contexts (EM adop-

tion in the trucking industry) about which little theoretical

knowledge exists, and it can be a rigorous approach to combine

deduction and induction. Here, our unit of analysis is EM adop-

tion by transport providers. Our sample includes 21 motor

Corresponding author:

Henrik S. Sternberg, College of Business, Iowa State University,

Ames, Iowa, USA; E-mail:henrik@iastate.edu

Journal of Business Logistics, 2020, 41(4): 310–333 doi: 10.1111/jbl.12254

© 2020 Council of Supply Chain Management Professionals

carriers and brokers operating in the United States or Europe.

We f‌ind that, far from making one-off, single-system decisions,

trucking professionals create portfolios of EMs in a continuous

process of multiple adoptions guided by expected benef‌its as

well as the attitude, awareness, and vigilance of managers. This

paper contributes to the f‌ields of supply chain management

(SCM) and information systems (IS) by proposing a novel model

of EM adoption by trucking professionals. We outline areas for

future empirical research and show that carriers conf‌igure portfo-

lios along multiple dimensions. Furthermore, our grounded the-

ory approach generates practical insights for managers wanting

to understand EM portfolio conf‌iguration and its potential advan-

tages, as well as for other supply chain members seeking to

understand the role of multiple EMs in the trucking industry.

Our paper is organized as follows: we complete our introduc-

tion by providing background on the motor carrier industry. We

then offer a brief overview of theory related to EM adoption, fol-

lowed by a methodology section that outlines our approach.

Finally, we outline and discuss our f‌indings and contributions,

and offer concluding thoughts.

Background: The motor carrier industry and electronic

marketplaces

A carrier who owns transportation assets (i.e., trucks) acquires

business in a chronological cascade of events. First, the carrier

contracts and dedicates parts of its f‌leet to its primary long-term

customers. As demand is realized and routine constraints appear

(e.g., break-downs), the carrier adjusts its operating plan by iden-

tifying trucks that are idle or running empty, and determining

whether the proprietary f‌leet is capable of covering all of the

contracted loads. If the carrier f‌inds idle or empty trucks, it can

generate extra revenue by f‌inding short-term business (i.e., loads)

to keep the assets busy. If it f‌inds that it cannot cover some

loads, the carrier can hire capacity from other motor carriers. In

both cases, the carrier (as any other logistics service provider

would do) uses the spot market (Caplice 2007).

Carriers tap the spot market via e-catalogs and various types

of EMs (Caplice 2007). E-catalogs are used by shippers to send

spot requests based on prenegotiated rates that are stored in a

database. Some EMs are private; that is, they are accessible only

to invited users. Private EMs often are auctions in which carriers

place binding bids (Wang et al. 2007). Public EMs are open to

all shippers, brokers, and motor carriers (Caplice 2007). Carriers

sometimes choose multiple private and/or public EMs simultane-

ously; why they do this and which factors determine why they

opt for some EMs over others has not been previously addressed

in the literature.

ADOPTION OF ELECTRONIC MARKETPLACES

We now brief‌ly review the IS and SCM literature to show the

gap regarding multiple-system adoption and to acknowledge the

literature that, per our training, is ingrained in us. We endeavored

to conduct our research with as little academic bias as possible,

but being sensitized to some concepts offers a viable point of

departure for grounded theory (Charmaz 2014, p. 31) and helps

us avoid overlooking critical previous knowledge (Bryant and

Charmaz 2007, p. 20).

Adoption is the decision an individual or organization makes

to implement and use a technology or a system. Researchers

have studied technology adoption for decades, with foundational

work carried out by Rogers (1962, 2003), Davis et al. (1989),

and Tornatzky and Fleischer (1990). Technology adoption has

been studied extensively in both the IS (Mishra and Agarwal,

2010) and SCM (Hazen et al. 2012) domains. Most supply chain

technologies follow a standard three-step diffusion process: (1)

The adopting f‌irm perceives a need for the technology. (2) The

technology is adopted. (3) The f‌irm uses the technology in its

structure and work processes (Rogers 2003; Hazen et al. 2012).

Early work by Davis et al. (1989) focuses on two factors that

determine whether the f‌irm adopts a new system: the system’s

perceived usefulness and ease of use. These two factors formed

the basis of the Technology Adoption Model (TAM).

Two major frameworks consolidated knowledge about adop-

tion: the Unif‌ied Theory of Acceptance and Use of Technology

(UTAUT) by Venkatesh et al. (2003) and the stages of imple-

mentation by Kwon and Zmud (1987). These frameworks over-

lap and can be combined to thoroughly explore EM adoption.

Given this, we used them in later stages of our own research as

theoretical lenses to support our analysis (Randall and Mello,

2012), which helped us reach higher theoretical levels in

grounded theory (Bryant and Charmaz 2007, p. 122). However,

both frameworks focus on single-system adoption, and the litera-

ture has almost exclusively tackled the adoption of one informa-

tion system at a time. Because our study aimed to capture

multiple-EM adoption by a company, we looked at literature

with a company-level perspective.

Goldsby and Eckert (2003), Wang et al. (2007), Kale et al.

(2007), and Kale et al. (2016) considered the strategic nature of

the choices that EM participants can make when selecting an

EM on the transportation spot market. Their studies, however,

focused on choosing only one EM at a time rather than multiple

EMs. All studies took the perspective of the shipper and con-

cluded that benef‌its to participants depend on different types of

mechanisms or governance structures. Goldsby and Eckert

(2003) focused on transaction cost economics, developing a deci-

sion-making framework to help shippers decide whether to use a

public spot EM and, if so, what kind to use. Within that frame-

work, Goldsby and Eckert recommend that shippers avoid public

EMs if the transportation market is too dynamic but focus on pri-

vate EMs or EMs targeted to specif‌ic needs if the shipper faces

restrictive constraints. Both Wang et al. (2007) and Kale et al.

(2007) focus on private EMs. Both papers conclude that shippers

may want to choose a private EM based on its operational

requirements. Specif‌ically, Kale et al. (2007) see the benef‌itof

collaborative private communities for both shippers and carriers.

Interestingly, Wang et al. (2007) mention that carriers might

want to use more than one private EM because of the limited

access to the market they provide. Kale et al. (2016) focus

mainly on EM governance and conclude that shippers can benef‌it

from any kind of EM (public or private), even if it belongs to a

carrier and is biased toward the carrier’s needs.

When attempting to understand corporate-level decision-mak-

ing about investments, strategic management literature recom-

mends using a portfolio approach (Bettis and Hall, 1981).

Researchers have used this approach when focusing on multiple

IS capabilities to theorize how IS can help forge sustainable

Adoption of electronic marketplaces 311