Measuring the performance of electronic marketplaces: An external goal approach study

a r t i c l e i n f o Electronic Marketplaces (EMPs) are virtual intermediaries that facilitate exchanges of products between buying and selling organizations. Prior research has examined factors that explain the establishment of EMPs, but scant knowledge exists on how to determine their performance. This study draws on organizational theory to measure EMP performance, thereby utilizing the concept of goals and goal achievement as criteria for success or failure. In this empirical work, we classify EMP as successful or unsuccessful and compare this classification with data collected eight years later. Our research identifies critical EMP goals and promotes the use of goals to determine performance. The advent of the Internet has resulted in new ways of doing business as well as new business forms – so-called information technology (IT)-centric businesses [100]. Electronic marketplaces (EMPs) are one representation of an IT-centric business because of the role that technology plays in their foundation and continuing existence. EMPs are virtual, technology-enabled trading spaces that facilitate the exchange of information , goods, services, and payments among multiple buyers and sellers [63]. ChemConnect, cc-hubwoo and Quadrem are successful examples of business-to-business (B2B) EMPs that not only survived the dot.com crash in 2001 [25] but have established themselves as leading trading platforms [97]. In fact, in their recent meta-review of EMP research , Standing et al. [97] report that EMPs " have a significant role to play in business " , and that research on EMPs has been and " continue[s] to be a vibrant research topic " (p.41). Much of the research on EMPs to date has focused on understanding what is required to establish these IT-centric businesses [7,63,90,96]. This knowledge of EMP design factors was needed initially because of the intertwined and symbiotic nature of the business and the technology. Today, EMPs have manifested themselves in the e-commerce landscape as an accepted business form that must ensure its viability and performance in the same way as any traditional organization [61]. For an EMP, information on its performance is important because it allows the organization to understand the extent to which EMP is efficient in undertaking its tasks and meeting set goals, while simultaneously continuing to innovate and grow [71]. Thus, EMPs measure performance to obtain reliable and valid information about an organization's current performance [102]. With this information, an EMP is able to evaluate, compare, motivate, promote and manage performance …