Impact of supplier-specific investments in inter-organisational information systems on strategic electronic coordination: the moderation effect of buyer dependence

Abstract

Impact of supplier-specific investments in inter-organisational information systems on strategic electronic coordination: the moderation effect of buyer dependence A B S T R A C T This paper examines the factors which influence sharing of the strategic information (in other words, electronic coordination) in a buyer-supplier dyad. The antecedents of this coordination are examined rather well in the transaction cost economics (TCE) theory and resource-dependency theory (RDT), while the supply chain management perspective is contemplated. The mentioned frameworks are used in the analysis. However, the research focus is narrowed down to the exploration of the antecedents of information exchange conducted via inter-organisational information systems (IOS). The empirical analysis is based on 198 observations of Norwegian companies operating in different types of industries. A regression model is used to test the hypotheses about the antecedents of strategic electronic coordination. The research results indicate that the direct effect of the supplier-specific investments in the IOS on the exchange of strategic information in the buyer-supplier dyad is not statistically significant. The supplier-specific investment in the IOS becomes positively associated with the strategic information exchange in the buyer-supplier dyad only when the buyer is dependent on the supplier. The buyer dependency creates a high motivation for the company to exchange the strategic information with the supplier who is more powerful in the dyad. This research concludes that the companies making substantial investments in the IOS for electronic coordination purposes may not reach their goals if relation-specific factors, such as buyer dependency, are not comprehensively considered.K E Y W O R D S buyer dependency, inter-organisational information system (IOS), resource dependency theory, strategic electronic coordination, specific IOS investment, transaction cost economics (TCE)

Manufacturer power over suppliers: scale development and validation

“…They fell into five categories: quality systems (QT), product management (PD), process management (PS), material management systems (MT) and information systems (IS). A total of 27 items were generated that measured these five constructs (Choi and Hartley, 1996; Clark and Fujimoto, 1991; DeFeo and Juran, 2010; Esmaeilian et al , 2016; Holland and Lockett, 1997; Huo et al , 2017; Kim and Wemmerlov, 2015; Nair et al , 2015; Teryokhin and Hannas, 2018; Shou et al , 2013; Wheelwright, 1984). Then, items and construct definitions were reviewed by supply chain professionals to refine the face validity.…”

“…While the two streams of research discussed previously focus on the source of power and the dependencies that beget that power, this research tackles a firm's ability to change its suppliers' choices in different decision areas. The suppliers' actions include changes to quality systems, product management strategies, process management plans, materials management systems and information systems (Choi and Hartley, 1996; Kim and Wemmerlöv, 2015; Lambert and Cooper, 2000; Teryokhin and Hannås, 2018). To the best of our knowledge, this research is the first empirical research investigating decision area-based power in a manufacturer–supplier relationship in the operations and supply chain management literature.…”

“…As discussed in Section 2, it is necessary to study the manufacturing firm's power with respect to the suppliers' decision areas in a manufacturer–supplier relationship. We define this power in Section 3 by drawing guidance from literature in manufacturing strategy, supplier selection and supplier development, material handling and inventory, and information systems (Choi and Hartley, 1996; Clark and Fujimoto, 1991; Esmaeilian et al , 2016; DeFeo and Juran, 2010; Holland and Lockett, 1997; Kim and Wemmerlöv, 2015; Lambert and Cooper, 2000; Nair et al , 2015; Teryokhin and Hannås, 2018; Wheelwright, 1984). This research helps to identify the decision areas in which suppliers could be willing to make changes at the manufacturing firm's request: quality systems, product management, process management, material management systems and information systems.…”

“…Suppliers' information systems influence a manufacturing firm in two ways. First, suppliers' participation in an integrated interorganizational information system (IOS) supports the manufacturer's interfirm coordination, which, in turn, accrues the expected benefits such as reduced transaction costs, improved information visibility and optimized processes (Teryokhin and Hannas, 2018). Second, suppliers' participation in an IOS requires the suppliers' internal information systems to be adapted.…”

“…the number of suppliers a manufacturing firm has for each required input) (Krajewski et al , 2005; Talay et al , 2018). In contrast, this research defines and empirically validates measurements of a manufacturing firm's power over its suppliers with respect to suppliers' decision areas, namely, quality, product, process, material and information systems (Choi and Hartley, 1996; Esmaeilian et al , 2016; Teryokhin and Hannas, 2018).…”