Employing Cost Effective Internet-Based Networking Technologies to Manage B2B Relationship: The Strategic Impact on IT Security Risk

Using Internet-based technologies to establish network connectivity between firms can create conduit for propagation of threat vectors. Sharing data and information assets with other firms may give rise to external seats of loss exposure. Together, these practices complicate the IT security risk in business relationship: misaligned incentive for IT security investment and free rider behavior arise. Naïve pursuit to enter into business relationships using Internet-based technologies can prove myopic because the IT security risk profile of the resultant B2B network may be untenable. This research exhibits the impact of sharing and linking of information and network assets on IT security risk in modern business relationship with the help of a 2-firm symmetric B2B. This work demonstrates why managers should consider expanding their business relationship to include IT security initiatives as well, especially when they employ Internet-based technologies to interlink their networks.