Impact of Boundary‐spanning Information Technology and Position in Chain on Firm Performance

Abstract

A series of hypotheses, derived from resource-based view (RBV) and extended RBV theory, are developed to assess how boundary-spanning information technologies (BSIT) are perceived to impact performance improvement, measured by order cost reduction, inventory reduction and customer satisfaction. Data are gathered from managers in the food industry to test our hypotheses. The results of our empirical analysis lend support to RBV theory in that we find that the use of BSIT is perceived to be positively associated with performance benefits. We also find that supply chain intermediaries -distributors and retailers -perceive greater performance improvements from BSIT than do manufacturers. The findings are significant in that investments in BSIT can produce important benefits for firm operations, and may forestall potential disintermediation from supply chains. Finally, we find that despite the greater perception of benefits from BSIT by intermediaries, they do not actually invest in BSIT to any greater extent than do manufacturers. This result may suggest that intermediaries are under-investing in BSIT.

Understanding the Generation of Value along Supply Chains: Balancing Control Information and Relational Governance Mechanisms in Downstream and Upstream Relationships

“…We note that, in line with previous researchers in the field of interfirm relationships, we use dyadic business relationships within a supply network context to test previous hypotheses [47][48][49]119,120]. This point of view has been adopted to develop the research model in an affordable way, but it represents a partial view of the functions of network relationships; in practice, each dyadic buyer-supplier relationship ('strong network ties') is connected to several different relationships than the either the supplier or the buyer has ('weak network ties') [120].…”

“…Although the literature has largely assumed that partners enter into alliances for mutual gain, it is not clear whether both partners benefit equitably, so additional evidence becomes critical [5,91]. Some researchers have found that 'win-win' outcomes are possible but each partner 'wins' differently [11,32,47,92] although buyers appear to be concerned with cost control, suppliers are focused on gaining competitive advantages that lead to value creation and long-term profitability [46,91].…”

“…Information visibility, in terms of frequent, accurate information, facilitates the development of relational capabilities that increases parties' benefits [31]. Firms that share disaggregated, flexible data are able to react to changing dynamic environments and retain customers [78], generating value from their alliances [29,47]. Therefore, we propose the following hypothesis: Hypothesis 4 (H4).…”

“…Studies have revealed that information sharing can lead partners to feel that the other's needs, priorities, goals and values are similar to their own [44]. This sense of common identity or 'attachment' provides a template for problem solving that reduces the costs of protection from opportunistic behaviour, saves costs through operational efficiencies, and leads to higher performance [47,49,90,98]. The exchange of information between partners is crucial to the reduction of costs and the generation of financial profit [7,13], as well as for the effective and efficient use of resources, which lead to operational advantages (quality, time, delivery, product design, after-sale services) that create value in terms of customers' expectations [11,32].…”

“…Partners' expectations for continuity signal relational commitment, improve task coordination, display cooperative behaviours, and promote synergies between parties' capabilities to develop a stronger basis for strategic advantage [113,114], which supports mutual gains [47]. Noordewier et al [24] state that long-term supply chain agreements have a positive impact on the reduction of buyers' acquisition costs.…”