The Impact of Internet-Based Electronic Marketplaces on Buyer-Supplier Relationships

This paper explores the impact of electronic marketplaces (EMs) on buyer-supplier relationships using a case study approach. Three aspects were investigated: economic benefits, structural changes, and participant satisfaction. Contrary to the literature that treats the emergence of EMs as evidence of “moving towards markets,” we first confirmed that EMs benefit both long-term and short-term relationships. They are separate entities that can cause structural changes in the direction of either markets or hierarchies/networks. We found evidence that corporate participants are moving towards more use of EMs to support both long-term and short-term relationships, but these changes were not significant enough to arrive at any solid conclusions. Participant satisfaction with buyer-supplier relationships as a result of EM usage was also investigated, and we conclude that, among all the functionalities that EMs support, supplier dissatisfaction is unique to the reverse auction functionality.