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Vertical relationships and the role of information technology: an empirical study of US and Japanese supplier relationships in the auto industry

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We explore the specific influence of IT in the broader framework of other factors predicting the degree of quasi-integration between two independent firms that are vertically-related in a value delivery system. We test the relative influence of three sets of constructs proposed by transaction cost economics, political economy and information system literature. We analyze data pertaining to 447 supplier relationships in the automobile industry in the US and Japan and find that three general constructs affect the level of quasi-integration: (1) the market within which a relationship operates, (2) the characteristics of the relationship itself and the relative power of the supplier, but also (3) inter-organizational uses of IT. The significance and the direction of the effects of these independent variables on the depend variable differ across the two countries. We propose a distinction between a US "electronic market" strategy to supply management and a Japanese "IT-mediated quasi-integration" strategy

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/Inseadwp1995/95-20.pdf

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