Toward a Modeling Tool for Designing Control Mechanisms for Network Organizations

Abstract

In network organizations and e-commerce, control mechanisms to guarantee interorganizational contract compliance enhance trust that business transactions are fair. In this paper, we propose a design technology, called e<SUP>3</SUP>-control, to develop such controls. The e<SUP>3</SUP>-control design methodology is an extension of the e<SUP>3</SUP>-value design methodology for business models, which models economic-value exchanges, rather than operational processes, between the organizations in a network. A methodology for designing control mechanisms should include three steps: (1) design an interorganizational value-exchange model of the network, (2) analyze interorganizational control problems within the network (i.e., possible violations of contractual obligations related to the value model), and (3) design control mechanisms to detect or prevent such control problems. The usability of the proposed e<SUP>3</SUP>-control design methodology is demonstrated in a case from the electrical industry.

Keywords:

• Design methodology
• interorganizational controls
• value webs
• virtual network organizations