Towards formation of dynamic value chains to enhance competitiveness of commercial lighting industry
| Date | 12 November 2018 |
| Pages | 427-444 |
| DOI | https://doi.org/10.1108/JICES-03-2018-0023 |
| Published date | 12 November 2018 |
| Author | Ashini Wesumperuma,Athula Ginige,Upul Gunawardana |
| Subject Matter | Information & knowledge management,Information management & governance,Information & communications technology |
Towards formation of dynamic
value chains to enhance
competitiveness of commercial
lighting industry
Ashini Wesumperuma
Western Sydney University, Sydney, Australia, and
Athula Ginige and Upul Gunawardana
School of Computing, Engineering and Mathematics, Western Sydney University,
Penrith, Australia
Abstract
Purpose –This study aims to explore ways to enhance competitiveness of commercial lighting industry
because of the growing digitally connected stakeholder community. Positive responses from stakeholders to
recurring business interactions help build trust and formation of a community; value chains being one form of
such trusted community. Because of the increasing trust, the effort to search right value chain partners diminishes,
business interactions become less formal and transaction costs are reduced, thus increasing the competitiveness.
Design/methodology/approach –In this research, a cross-sectional study of commercial lighting
industry domain in Australia was carriedout, focusing on two states: New South Wales and Victoria. Based
on the findings, an approach and a supporting platform to enhancecompetitiveness of commercial lighting
industrywere synthesized.
Findings –Based on the findings from the study, formation of such value chains, namely,“Entrusted Circles”
and its two types of formations, fully and partial, were observed. Their further growth was hindered by high
transaction costs. To reduce this transaction cost, this paper proposes a platform to create dynamic value chains,
among stakeholders of commercial lighting industry, making use of growing digital connectivity leadingtoward
agile formation of Entrusted Circles to enhance competitiveness.
Research limitations/implications –This study focuses on the commercial lighting industry in
Australia, which is not tested in any other domain to investigate its wider applicability. However, it is
conceptuallyapplicable to be used in industries withcompliance and standard procedures.
Originality/value –This paper shows how to identify Entrusted Circles and build, support and sustain such
relationships among value chain partners to successfully conduct business transactions in a dynamic value chain.
Keywords Community, Trust, Dynamic value chain, Entrusted circle
Paper type Case study
1. Introduction
The ubiquitous nature of the internet provides business organizations with pathways to
align and couple their business processesto from virtual alliances along the axis of a virtual
value chain (Sutherlandand Heuvel, 2002). According to Michael Porter (1985), a value chain
is a set of activities that an organizationcarries out to create value for its customers. Valueto
The authors would like to acknowledge the funding support received for this work by “The
Department of Industry, Innovation and Science of the Australian Government”and the “Western
Sydney University.”
Commercial
lighting
industry
427
Received18 March 2018
Revised17 August 2018
Accepted25 August 2018
Journalof Information,
Communicationand Ethics in
Society
Vol.16 No. 4, 2018
pp. 427-444
© Emerald Publishing Limited
1477-996X
DOI 10.1108/JICES-03-2018-0023
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1477-996X.htm
an organization can be measuredin terms of price or profit of a product or a service but to a
consumer, that measure is complex, as it relates to the satisfaction of needs. These
interdependent value activities are the building blocks of competitive advantage and are
connected by linkages. As business needs are complex, values chain partners may not
always have a previous linkage or working relationship. In some cases, business partners
may need to be found in a marketplace. Today, the internetis the key facilitator that helps to
open doorways to emerging digital marketplaces. A digital marketplace is an amorphous
web of connections among producers and consumers (Sharma et al.,2012) that paves the
way to conducting business transactions in a dynamic value chain. This provides
businesses of various sizes, the opportunity to digitally collaborate. Currently, business
competition is at a global level, as the technology has broken down the geographical
barriers. Thus, the product offerings are at globally competitive prices and have the
capability to cater for nichemarkets (Ginige, 2004).
In the business world, prior to conducting business transactions, we first start
networking and then start interacting with one another. This interaction enables us to find
opportunities and build trust,e.g. via door knocking and meetings in the physical world. As
a result, the opportunities will get converted into jobs. Most of the traditional systems that
were developed have prior trust in one another to support transactions. Because of the
established trust, value chains thatare fairly static get formed, as they depend on the same
value chain partners(Ginige, 2004).
Today, more people are getting digitally connected. Information technology can connect
and automate business processes and build information systems. Even though, the
businesses have investedin developing information systems that can form relationshipsin a
more dynamic value chain, manyusers do not trust these systems. As a result, the systems
are not used by the consumers as they do not feel confident enough to do transactions using
that particular value chain (Deborah Elms, 2013). This is mostly due to these systems not
providing adequate trust-building mechanisms to its consumers (Yi and Xinlin, 2018).
Interestingly, in the absence of trust, if the systems are developedin such a way to mitigate
the risks of conducting business online, people are willing to do transactions (Abu Kashef
et al.,2017), e.g. PayPal. In this era, it is difficult for most of the businesses to remain
detached from doing businessonline. Yet, having an online presence is not enough and they
need to stay connected and get connected to other businesses. Thus, there is a strong need
for using social computingmechanisms in their information systems (Fernando et al.,2016).
A cross-sectional study of commercial lighting industry domain in Australia pin pointed
these observationsand our solution to this contemporary issue resulted in this paper.
This paper is organized as follows: this section introduces the nature of the problem.
Next, it looks at the previous related work conducted and states the purpose of this paper.
This is followed by the context of the study that details the case study, methodology and
findings in context. Next, it presents the key findings and recommendationsfor a company
on creating a dynamic value chain and trust. Finally, the paper concludesafter presenting a
platform to facilitate formation of entrusted circles through context-specific actionable
information.
2. Related work
According to Houthoofd(2009), a business is a three-dimensional “strategic space”within an
industry, defined by the buyer typestargeted, product types sold and geographical reach. It
provides goods and services to meet the needs of humans in exchange for other goods,
services or money. Market is a place or medium through which these exchanges can take
place. Facebook, a social networking website, defines the marketplace as “a convenient
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