From the physical to the virtual: Process virtualization theory and an examination of market practice in the wholesale automotive industry

• Main Author: Overby, Eric M
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-2007
• Subjects: Automotive parts industry; Business costs; Business to business commerce; Commerce-Business; Internet; Management; Studies; Theory; Virtualization
• ISBN: 0549026762; 9780549026761

Processes that have traditionally required physical interaction amongst participants are being conducted online or through other virtual means, including shopping (via electronic commerce), education (via online distance learning), and retail banking (via the automated teller machine). Although society continues to virtualize more and more processes, there is variance in how successful attempts to virtualize processes have been. For example, some shopping processes (such as those for office supplies and CD's) have proven amenable to virtualization, while other shopping processes have proven resistant (such as those for houses and perfume). Similarly, distance learning programs are more successful for certain educational processes than others. This leads to the following research questions: What is it about a process that affects its "virtualizability"? What factors explain why some processes are amenable to virtualization while others are resistant? The objectives of this dissertation are: (1) to propose "process virtualization theory", which is a general theory to explain which factors affect whether a process is amenable or resistant to being conducted virtually, and (2) to examine an empirical manifestation of process virtualization. First, process virtualization theory describes the constructs that directly affect the virtualizability of a process (sensory requirements, relationship requirements, synchronism requirements, and identification and control requirements) as well as the powerful moderating effect of information technology ("IT") on process virtualization. Processes can be virtualized with or without IT, and considering IT's effects on process virtualization allows its theoretical significance to be explored. Second, the dissertation analyzes a manifestation of process virtualization occurring in the wholesale automotive market, as this market is experiencing a shift from physical trading processes to virtual ones. This context provides an example of process virtualization, but it also relates to economic theories of market interaction. For example, physical vs. virtual methods of accessing the market create differences in transaction costs, while physical vs. virtual methods of making products available for sale create quality uncertainty. This aspect of the dissertation contributes to research on electronic markets. Importantly, the dissertation does not include a direct test of the propositions of process virtualization theory; that aspect of the overall research program is on-going.