E-business differentiation through value-based trust Joseph A. Cazier a , Benjamin B.M. Shao b, * , Robert D. St. Louis b a Department of Computer Information Systems, Walker College of Business, Appalachian State University, Boone, NC 28608-2049, United States b Department of Information Systems, W.P. Carey School of Business, Arizona State University, Tempe, AZ 85287-4606, United States Received 20 February 2004; received in revised form 24 March 2005; accepted 12 March 2006 Available online 8 June 2006 Abstract For e-business, location is irrelevant and competition is intense. To succeed in this environment, organizations must find new ways to differentiate themselves from their competition. One way to achieve e-business differentiation is to foster trust by building a perception of value congruence and avoiding a perception of value conflict. We explore how value congruence contributes to and how value conflict decreases trust in e-businesses. An experiment was conducted to examine the respective impacts of value congruence and value conflict on trust in an e-commerce setting. Our results show that, for e-businesses, value congruence has an enabling effect on trust while value conflict reduces trust. Such effects are strong enough to suggest that value congruence can be employed as an effective way for e-businesses to differentiate themselves while creating and sustaining competitive advantage. Managerial implications are drawn from our results. # 2006 Elsevier B.V. All rights reserved. Keywords: Trust; Value congruence; Value conflict; E-commerce; E-business; Differentiation; Competitive advantage 1. Introduction Trust makes business possible. Without it, few transactions would occur. Consumers must trust a seller to deliver a product as agreed. Clients may also refuse to do business if they do not trust the security and privacy practices of the vendor. In the brick-and-mortar world, customers can alleviate their concerns through face-to- face interaction with a human; physical presence of the business offers assurance that it exists, is accessible, and is trustworthy. In the online virtual marketplace, it is difficult to develop such trust. Building and marketing a business in the online world poses unique challenges. When the well-known four P’s (product, price, promotion and place) of marketing were developed in the 1960s, place was considered important. The four P’s have been extensively studied by researchers and employed by practitioners [2]. However, online businesses need a new model for success, as place has become an irrelevant factor in this arena. Wilson and Abel [42] claimed that on the Internet location has become a non-issue, and with the declining importance of place, other factors are more critical. A new factor that may substitute for place is perception, including the customer’s perceptions of trust, value congruence, and other factors that motivate customers to complete a transaction. As competition turns intense in e-commerce, perception may be very influential and perceived value congruence can become more important. With the competition just a click away, e-businesses must find other ways to distinguish themselves from competitors. Trust has been identified as a critical success factor for businesses. It is therefore imperative to study how www.elsevier.com/locate/dsw Information & Management 43 (2006) 718–727 * Corresponding author. Tel.: +1 480 727 6790; fax: +1 480 965 8392. E-mail addresses: ben.shao@asu.edu, Benjamin.Shao@asu.edu (Benjamin B.M. Shao). 0378-7206/$ – see front matter # 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.im.2006.03.006