Interorganizational dependence, information transparency in interorganizational information systems, and supply chain performance

Abstract

To explain the large disparity between the potential and practice of interorganizational information systems (IOSs), this study investigates asymmetric information transparency in an IOS from a dyadic perspective. When there is asymmetric dependency in a dyad, an IOS may not completely eliminate asymmetric information transparency between supply chain (SC) partners but may change the nature of information asymmetry. Consistent with resource dependence theory, this study includes joint dependence and dependence asymmetry as antecedents of information transparency in an IOS. The data used in this study were collected from 111 matched pairs of intermediate component manufacturers and their immediate suppliers in heavy manufacturing industries. The results show that asymmetric information transparency in an IOS is prevalent in SC relationships. Regarding the antecedents of information transparency in an IOS, both joint dependence and each partner’s dependence advantage are significant. Furthermore, information transparency in an IOS positively influences SC performance measured by SC relationship quality and relationship-specific performance, whereas asymmetric information transparency negatively influences joint profit performance.

Keywords:

• Interorganizational information transparency
• information asymmetry
• IOS
• resource dependence theory
• asymmetric information transparency
• supply chain performance

Associate Editor:

Richard Klein

Editor:

Frantz Rowe

Associate Editor:

Richard Klein

Editor:

Frantz Rowe

Notes

1 Theoretically, it is possible to compare interorganizational information sharing between two different channels, i.e., electronic (e.g., IOS) and non-electronic (e.g., face-to-face). However, in today’s networked environments, SC firms of all sizes are interconnected through electronic channels in order to improve the efficiency and effectiveness of their business processes. Further, considering the sheer volume of information exchange between upstream SC partners in heavy manufacturing industries, it is practically impossible to maintain a close SC partnership without an IOS. Hence, we limit our discussion to environments where SC partners are interconnected via an IOS.

2 Regression splines are piecewise regression functions between two variables. The basic logic of a regression spline is to allow the slope of the regression equation to change at certain points (known as knots, nodes, or jointpoints). Usually, one regression will approximate the negative tendency, while the other regression will approximate the upward tendency. In this instance, researchers can identify knots in the relationship between x and y, and then they can perform two piecewise linear estimates joined at the knots (Johnston, 1984).

3 One concern may be regarding respondent knowledge of relationship-specific performance. Since the majority of our sample consists of small- and medium-sized companies (80.1% of the buyer sample and 84.6% of the supplier sample had revenues of less than $100 million in 2010) working in upstream SCs, respondents should know what proportion of their business is conducted with the SC partner and its profitability.

4 For our main analyses, common method variance was not a concern because the data were collected from two different sources: (1) intermediate component manufacturers and (2) their immediate suppliers.

Additional information

Notes on contributors

Bangho Cho

About the Authors

Bangho Cho is a Ph.D. student of graduate school of Information Systems at Yonsei University, Korea. He has worked as an IT consultant in the IT Service Industry over 20 years. And he has worked at leading companies of the industry such as Samsung Electronics and Samsung SDS. With his background as an IT consultant, he always makes an effort to combine field experiences to the academic theories. His research interests are in the areas of e-business, virtual worlds, IT-enabled supply chain management, and knowledge management.

Sung Yul Ryoo

Sung Yul Ryoo is an assistant professor in Department of Business Administration at Daejin University, Korea. He has been a postdoctoral researcher in Management Information Systems Department, Fogelman College of Business and Economics at University of Memphis, USA. His research interests are in the area of knowledge management, supply chain management, and organizational issues pertaining to information systems. He has published his research works in journals such as Omega, Journal of Business Research, Information Systems Frontiers, Computers in Human Behavior, Total Quality Management & Business Excellence, Expert Systems with Applications, and Asia Pacific Journal of Information Systems.

Kyung Kyu Kim

Kyung Kyu Kim is Professor of Information Systems at Yonsei University, Korea. His current research interests are in the areas of virtual worlds, knowledge management, IT-enabled supply chain management, and behavioral issues in e-business. He has published his research works in Accounting Review, MIS Quarterly, Journal of MIS, Journal of the Association for Information Systems, Omega, Decision Sciences, Information and Management, Database, Journal of Organizational Computing and Electronic Commerce, Journal of Business Research, Electronic Commerce Applications and Research, Journal of Information Science, International Journal of Information Management, and Journal of Information systems.