Pre-requisites of successful strategic electronic coordination: the moderation effect of the ownership mechanism of inter-organisational information systems

Open access

Abstract

In this paper, we attempt to explain how the ownership mechanism of an interorganisational information system (IOS) may impact strategic information exchange (electronic coordination) induced by specific investments in the IOS. Recent research and practice show that heavy investments in IOSs demonstrate mixed results with respect to their impact on the electronic coordination. Consequently, the search of additional factors is needed to help and explain under what circumstances the IOS investments for strategic purposes become beneficial for the companies in a buyersupplier dyad. Transaction cost economics (TCE) and the hostage model are used as a framework for the research. 198 observations of Norwegian companies in different branches of industry constitute the base of the empirical study. A buyer-supplier dyad is the unit of the analysis. A regression model of the relation between the IOS ownership mechanism and the strategic information sharing is used to test two hypotheses about the buyer-supplier collaboration via an IOS. The results demonstrate that the risk of unilateral specific investments in an IOS made by the buyer or the seller is attenuated by the ownership mechanism of the IOS. The willingness of a buyer to share their strategic information with the supplier via the IOS increases if the supplier invests in the IOS which is owned and controlled by the buyer. Conversely, the supplier becomes motivated to share certain sensitive strategic information with the buying company if the latter invests in the IOS which is owned and controlled by the supplier.

Afuah, A. (2003). Redefining firm boundaries in the face of the Internet: Are firms really shrinking? Academy of Management Review, 28(1), 34-53. doi:

Ahmadjian, C., & Oxley, J. (2005). Using hostages to support exchange: Dependence balancing and partial equity stakes in Japanese automotive supply relationships. Journal of Law, Economics, and Organization, 22(1), 213-233. doi:

Allen, D. K., Colligan, D., Finnie, A., & Kern, T. (2000). Trust, power and interorganizational information systems: the case of the electronic trading community Trans- Lease. Information Systems Journal, 10(1), 21-40. doi:

Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 396-402. doi:

Bensaou, M., & Anderson, E. (1999). Buyer-supplier relations in industrial markets: when do buyers risk making idiosyncratic investments? Organization Science, 10(4), 460-481. doi:

Blut, M., Evanschitzky, H., Backhaus, C., Rudd, J., & Marck, M. (2016). Securing business-to-business relationships: the impact of switching costs. Industrial Marketing Management, 52, 82-90. doi:

Bogers, M. (2011). The open innovation paradox: knowledge sharing and protection in R&D collaborations. European Journal of Innovation Management, 14(1), 93-117. doi:

Burnham, T. A., Frels, J. K., & Mahajan, V. (2003). Consumer switching costs: A typology, antecedents, and consequences. Journal of the Academy of Marketing Science, 31(2), 109-126. doi:

Buvik, A., & John, G. (2000). When does vertical coordination improve industrial purchasing relationships? Journal of Marketing, 64(4), 52-64. doi:

Choon Tan, K., Kannan, V. R., Hsu, C. C., & Keong Leong, G. (2010). Supply chain information and relational alignments: mediators of EDI on firm performance. International Journal of Physical Distribution & Logistics Management, 40(5), 377-394. doi:

Deutsch, M. (1962). Cooperation and trust: Some theoretical notes. In M. R. Jones (Ed.), Nebraska Symposium on Motivation (pp. 275-319). Lincoln, USA: University of Nebraska Press.

Dorsch, M. J., Carlson, L., Raymond, M. A., & Ranson, R. (2001). Customer equity management and strategic choices for sales managers. Journal of Personal Selling & Sales Management, 21(2), 157-166. doi:

Geiger, I., Durand, A., Saab, S., Kleinaltenkamp, M., Baxter, R., & Lee, Y. (2012). The bonding effects of relationship value and switching costs in industrial buyer- seller relationships: An investigation into role differences. Industrial Marketing Management, 41(1), 82-93. doi:

Gemser, G., & Wijnberg, N. M. (2001). Effects of reputational sanctions on the competitive imitation of design innovations. Organization Studies, 22(4), 563-591. doi:

Han, K., Kauffman, R. J., & Nault, B. R. (2008). Relative importance, specific investment and ownership in interorganizational systems. Information Technology and Management, 9(3), 181-200. doi:

Hannas, G. (2007). Vertical electronic coordination and specific IT investments in business-to-business relationships [Ph.D. dissertation]. Molde, Norway: Molde University College.

Hart, O., & Moore, J. (1990). Property Rights and the Nature of the Firm. Journal of Political Economy, 98(6), 1119-1158. doi:

Heide, J. B., & John, G. (1992). Do norms matter in marketing Relationships? The Journal of Marketing, 58(2), 32-44. doi:

Heide, J. B., & John, G. (1990). Alliances in industrial purchasing: The determinants of joint action in buyersupplier relationships. Journal of Marketing Research, 27(1), 24-36. doi:

Heide, J. B., & Miner, A. S. (1992). The shadow of the future: Effects of anticipated interaction and frequency of contact on buyer-seller cooperation. Academy of Management Journal, 35(2), 265-291. doi:

Hunt, S. D., Sparkman Jr., R. D., & Wilcox, J. B. (1982). The pretest in survey research: Issues and preliminary findings. Journal of Marketing Research, 19(2), 269-273. doi:

Ibbott, C. J., & O'Keefe, R. M. (2004). Trust, planning and benefits in a global interorganizational system. Information Systems Journal, 14(2), 131-152. doi:

Johnston, H. R., & Vitale, M. R. (1988). Creating competitive advantage with interorganizational information systems. MIS Quarterly, 12(2), 153-165. doi:

Joshi, A. W., & Stump, R. L. (1999). The contingent effect of specific asset investments on joint action in manufacturer- supplier relationships: An empirical test of the moderating role of reciprocal asset investments, uncertainty, and trust. Journal of the Academy of Marketing Science, 27(3), 291-305. doi:

70399273001

Kembro, J., Selviaridis, K., & Naslund, D. (2014). Theoretical perspectives on information sharing in supply chains: a systematic literature review and conceptual framework. Supply Chain Management: An International Journal, 19(5/6), 609-625. doi:

Kim, K. K., Park, S. H., Ryoo, S. Y., & Park, S.K. (2010). Interorganizational cooperation in buyer-supplier relationships: Both perspectives. Journal of Business Research, 63(8), 863-869. doi:

Klein, R., Rai, A., & Straub, D. W. (2007). Competitive and cooperative positioning in supply chain logistics relationships. Decision Sciences, 38(4), 611-646. doi:

Levinthal, D. A., & Fichman, M. (1988). Dynamics of interorganizational attachments: Auditor-client relationships. Administrative Science Quarterly, 33(3) 345-369. doi:

Malone, T. W., Yates, J., & Benjamin, R. I. (1987). Electronic markets and electronic hierarchies. Communications of the ACM, 30(6), 484-497. doi:

Ménard, C., & Valceschini, E. (2005). New institutions for governing the agri-food industry. European Review of Agricultural Economics, 32(3), 421-440. doi:

Novak, S., & Eppinger, S. D. (2001). Sourcing by design: Product complexity and the supply chain. Management Science, 47(1), 189-204. doi:

Nyaga, G. N., Whipple, J. M., & Lynch, D. F. (2010). Examining supply chain relationships: do buyer and supplier perspectives on collaborative relationships differ? Journal of Operations Management, 28(2), 101-114. doi:

Porterfield, T. E., Bailey, J. P., & Evers, P. T. (2010). B2B eCommerce: an empirical investigation of information exchange and firm performance. International Journal of Physical Distribution & Logistics Management, 40(6), 435-455. doi:

Premkumar, G. P. (2000). Interorganization systems and supply chain management. Information Systems Management, 17(3), 1-14. doi:

Saeed, K. A., Malhotra, M. K., & Grover, V. (2005). Examining the impact of interorganizational systems on process efficiency and sourcing leverage in buyer-supplier dyads. Decision Sciences, 36(3), 365-396. doi:

Sahaym, A., Steensma, H. K., & Schilling, M. A. (2007). The influence of information technology on the use of loosely coupled organizational forms: An industrylevel analysis. Organization Science, 18(5), 865-880. doi:

Schoonhoven, C. B. (1981). Problems with contingency theory: testing assumptions hidden within the language of contingency “theory”. Administrative Science Quarterly, 26(3), 349-377.

Skjoett-Larsen, T. (2000). European logistics beyond 2000. International Journal of Physical Distribution & Logistics Management, 30(5), 377-387. doi:

Stevens, J. P. (1992). Applied multivariate statistics for the social sciences. Hillsdale, USA: Erlbaum.

Stump, R. L. (1995). Antecedents of purchasing concentration: A transaction cost explanation. Journal of Business Research, 34(2), 145-157. doi:

Subramani, M. (2004). How do suppliers benefit from information technology use in supply chain relationships? MIS Quarterly, 28(1), 45-73.

Vijayasarathy, L. R. (2010). Supply integration: an investigation of its multi-dimensionality and relational antecedents. International Journal of Production Economics, 124(2), 489-505. doi:

Wathne, K. H., & Heide, J. B. (2000). Opportunism in interfirm relationships: forms, outcomes, and solutions. Journal of Marketing, 64(4), 36-51. doi:

Williamson, O. E. (1983). Credible commitments: Using hostages to support exchange. The American Economic Review, 73(4), 519-540.

Williamson, O.E. (1985). The Economic Institutions of Capitalism. New York, USA: Free Press.

Zaheer, A., & Venkatraman, N. (1995). Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange. Strategic Management Journal, 16(5), 373-392. doi:

Journal Information

Metrics

All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 224 224 86
PDF Downloads 141 141 91