The Usage of Social Media and E-Reputation System in Global Supply Chain: Comparative Cases from Diamond & Automotive Industries

Abstract

The last decade witnesses a heave use of social media-based information systems in different fields of business such as logistics, procurement, and supply chain management. Managing these types of information systems, could help companies to outsource their supply chain functions in a global scale and enhance their competitive advantages. However, the digital performance of these activities inherent risks of inappropriate supplier selection, lack of trust, bounded rationality and uncertainty about the supply conditions (e.g., pricing, shipping and timing). To address such challenges, this research explains how companies use e-reputation systems and social media to select their global trusted suppliers. Based on two-case evidence from British Diamond and Egyptian Automotive companies, the researchers conducted 20 interviews with purchasing and supply chain professionals. Chen & Lin's reputation system model has been adopted to explain the process of selecting and evaluating a trusted supplier and to inform our data analysis. Our findings referred to the lack of experience among diamond professionals on how to use e-reputation systems and their lack of understanding to the role of social media-based ratings or referrals during the stages of selection suppliers' discovery and approval. Though, automotive professionals find e-reputation system a strong tool to build goodwill, tacit credibility, competence and predictable trust. Ironically, both cases confirm that supply chain professional use these systems to re-evaluate and reselect their existing suppliers than to extend new supply networks.

Developing a decision model for risks associated with using social media in operation and supply chain management

“…, 2018; Liew, 2022). Therefore, researchers' attention has shifted towards the “negative aspect of social media in regards to organizations”, because of inherent risks that may exist in digital activities (Mohamad et al. , 2018) and lead work–life conflicts (Tang et al.…”

“…The usage of social media in the OSCM process provides many advantages such as effective communication and quick information sharing related to the supply chain, providing a rich view of supply chain events, building relationships among supply chain members, predicting the market to evaluate supply chain risk from the perspective of supply chain members, pursuing innovations, increasing velocity, and mitigating the existence of potential asymmetries of information (O'leary, 2011;Markova and Petkovska-Mir cevska, 2013;Treem and Leonardi, 2013;Mohamad et al, 2018). Moreover, social media might indirectly enhance the relationship quality and confidence among supply chain partners as it provides an increase in communication frequency.…”

“…However, recently an increasing number of incidents signified that a dark side of social media exists as well (Baccarella et al, 2018;Liew, 2022). Therefore, researchers' attention has shifted towards the "negative aspect of social media in regards to organizations", because of inherent risks that may exist in digital activities (Mohamad et al, 2018) and lead work-life conflicts (Tang et al, 2020).…”