The Impact of Electronic Data Interchange on Interorganizational Relationships: Integrating Theoretical Perspectives

Transcription

1 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences The Impact of Eectronic Data Interchange on Interorganizationa Reationships: Integrating Theoretica Perspectives Norbert Reekers & Steve Smithson Information Systems Department The London Schoo of Economics Abstract This research examines the ways eectronic data interchange (EDI) is used to coordinate and contro interorganizationa activities and resource transactions between car manufacturers and suppiers. The objective is to deveiop a research framework with a soid theoretica base that wi be capabe of capturing the richness of changing interorganizationa reationships. To this end, the paper discusses the integration of three theoretica perspectives: transaction cost anaysis, resource dependence theory and the network perspective. The main concepts of the flamework are described in terms of the environmenta context, coordination strategy, eficiency, structure and dependence. The effectiveness of the framework is demonstrated by the deveopment of ten iustrative propositions that coud be tested in practice. 1: Introduction Within the broad group of interorganizationa systems [9], eectronic data interchange (EDI) seems the most important appication with a far reaching impact on the way business is done. It is usuay defined as the exchange of structured eectronic documents between computer systems of two or more organizations [ 141. Unike traditiona appications of information technoogy (IT), ED1 potentiay affects reationships between organizations [9;24] as we as their interna structures PI. The objective of this research is to investigate the impact of ED1 on the coordination and contro of interorgani7ationa activities and resource transactions in the automotive industry. Thus, our main interest is with how ED1 use affects various aspects of the interorganizationa reationship, such as coordination, power and forms of cooperation. The key questions are: What are the effects of ED1 use on interorganizationa coordination? How are the benefits and costs of ED1 use distributed among trading partners? What are the effects of ED1 on the structure of interorganizationa reationships? However, defining and quantifying the costs and benefits associated with IT has aways been very difficut [21;26;33]. Major probems incude attributing quantitative vaues to quaitative benefits, isoating the impact of IT from other changes, showing causaity and proving that a particuar benefit is soey due to IT, and proving productivity gains without an accepted measure of productivity. The need for far reaching interorganizationa adjustments makes ED1 different from interna IT investments, causing additiona probems when assessing its effectiveness. Whie the direct gains from EDI, such as reduced personne or maiing costs, are reativey easy to measure they tend to be unimpressive [38]. Equay, the direct costs of setting up an ED1 ink are reativey ow. The major costs and benefits are normay indirect; e.g. inventory contro, improved trading reationships or EDIinduced business process reengineering [37]. To appraise the quaitative changes (e.g. a change in the governance structure), the organizationa context needs to be fuy understood. Simiary, the rea monetary vaues of changes in organizationa dependence are difficut to estimate [43]. Normay, organizations do not conduct post impementation evauation studies for ED1 as they regard it as a strategic investment to remain competitive [33;34]. There is no singe theoretica perspective that expains the impact of ED1 on interorganizationa reationships; existing approaches (see beow) tend to be too narrow to address the compexity of the observabe phenomena, Therefore, this study deveops a mutidiscipinary framework for a more comprehensive understanding of the roe of ED1 and reated technoogies. The framework /95$ IEEE 757

2 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences is being appied in the context of a comparative case anaysis of suppy reationships in the automotive industry. The framework acts as a foundation to examine the production network of suppy reationships for car manufacturers. Taking this network perspective, rather than individua dyadic reationships, offers significant insight at the cost of considerabe compexity. To cope with the compexity, we defined our organization-set [2] as a series of foca networks comprising the car manufacturers (at the center) and their first tier component suppiers (see aso [43]). The paper focuses on the deveopment of the research framework, from the underying theoretica approaches, and its appication in the context of the study. Space does not permit a presentation of the interim findings of the study, which is sti in progress. We begin by discussing the theoretica perspectives which provide the hasis for the framework before moving on to describe the framework itsef and, finay, its appication. 2: Discussion: Integrating theoretica perspectives Out of a number of potentiay fruitfu approaches we have drawn on three major perspectives: transaction cost anaysis [44], resource dependence theory [31] and the network approach [ 171. These estabish three anaytica dimensions that, taken together, aow us to anayze the effect of ED1 on the efficiency, socio-poitica and structura aspects of production networks. Before integrating the perspectives, we sha consider their strengths and weaknesses, as shown in Tabe : Transaction cost theory Transaction cost theory has great power to examine the efficiency and cost structures of exchange reationships which provide the basis for the choice of governance mechanisms. It views organizations as constanty changing their boundaries, periodicay absorbing transactions within their hierarchies whie, at other times, spinning transactions off to be governed through markets. The focus is on the circumstances under which transactions might be externaized (taking pace in the market) or internaized (hierarchica transactions) in order to reduce transaction costs. As transaction costs can be difficut to measure directy, additiona environmenta constructs are incuded, such as asset specificity, uniqueness, uncertainty and compexity of the exchange, as we as behaviora factors, such as opportunism and bounded rationaity. Changes in IT can affect transaction costs [o]; for exampe, ED1 can simpi@ certain transactions, indirecty changing the efficient boundary of the firm. With the introduction of ean production and eectronic trading in the automotive indusw [46], understanding the efficiency of interorganizationa cooperation is centra to our concerns. However, transaction cost theory has a number of imitations. Firsty, it does not make any universa caims that are appicabe to a organizations, nor does it accuratey predict what wi happen in a specific situation. Secondy, it takes itte or no account of organizations strategic choices, their abiities to adopt particuar technoogies (e.g. EDI) or the compex interdependencies that comprise the structure of an industry. Its preoccupation with the economic dimension means that transaction cost theory tends to negect the poitica aspects of interorganizationa reationships. Thirdy, there are weaknesses in operationahzing the concepts of transaction and transaction costs [28]. Finay, it fais to consider the transition costs that may render sub-optima structures cheaper than the optimum. 2.2: Resource dependence theory However, many of the weaknesses of transaction cost theory are the strengths of resource dependence theory, which focuses on the poitica and behaviora aspects of interorganizationa reationships. Simiary, its emphasis on process compements transaction cost s emphasis on structure. By concentrating on resource acquisition and dependence, it expains many of the underying poitica characteristics of reationships. Assuming that organizations strive to optimize their sef-interests, the objective of a firm is to minimize its dependence on other firms and maximize the dependence of other firms on itsef However, functiona autonomy can never be reaized fuy [31]. Due to the need for interorganizationa resource exchange, organizations try to secure access to important resources and baance asymmetry and reciprocity. For exampe, in the automotive industry, manufacturers depend upon certain suppiers because of a ack of suppy aternatives and, simiary, an individua manufacturer may represent a significant proportion of the suppier s turnover. The key imitations of the resource dependence approach mosty concern a ack of conceptua and operationa definition of the concepts invoved and their reationships, as we as a ack of empirica vaidation. However, in our case, an additiona imitation is that, ike transaction cost theory, it is based on dyadic reationships between two organizations. This is at best ungainy to appy to the networks of automotive manufacturers and suppiers. 158

3 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Transaction cost theory Resource dependence theory Network approach Theoretica foundations Assumptions Functionaity paradigm Neocassica framework Cost of transactions is critica for the choice of an optima governance structure 0 Socio-poitica paradigm 0 Open systems theory 0 Socia exchange theory Organizations try to gain contro over necessary externa resources 0 Structura paradigm 0 Socia exchange theory Industria marketing Resource dependence theory Organizations are socia units that interact with other firms within a wider network Unit of anaysis Specific transaction reation Dependence reation Network of interdependent reations scope Anayze the economic costs of setting up, operating and maintaining a business reationship Consider the poitica and behaviora dimensions of organizationa interaction Describe and anayze organizationa behavior through the structure of the network Nature of EDI Mediating technoogy to ower transaction costs and improve information handing Contro mechanism to expand infuence and status Structura enaber to improve fexibiity, exchange and adaptation processes Strengths Examination of efficiency and cost structures Hoistic approach that considers poitica and behaviora dimension Dynamic approach that extends the anaysis to a network of interreated firms Weaknesses Narrow focus on economic aspects Discrete and static anaysis that assumes existence of optima1 structure Negects transition costs Overemphasizes poitica motives and disregards structura considerations Lack of conceptua and operationa definition Reativey ungrounded theoreticay Sow deveopment of concepts and data gathering toos Contribution to this study Conceptuaizes efficiency of interorganizationa coordination Anaysis of asymmetric power and dependence reationships Anaysis of structura aspects of interorganizationa coordination TaMe 1. Comparison of theoretica perspectives. 2.3 Network approach This ast probem is the natura preserve of the network approach, which provides the necessary concepts and constructs with which to describe and anayze compex networks. Recenty, interorganizationa networks, based on cooperation and strategic aiances, have been increasingy observed, for exampe, in the automotive industry [4]. Network anaysis has been widey used in anthropoogy [8], socioogy, economics and organizationa behavior [17] but its appication to industria systems and interorganizationa coordination is reativey new [ 111. The primary contribution of network anaysis to this study is its abiity to hep conceptuaize structura variabes. These are properties of inks (strength, directionaity and symmetry), the position of an organization in a network, the content of inks (task based exchanges versus socia exchanges) and the properties of the network itsef (connectedness, density, reachabiity). These variabes in turn affect interorganizationa infuence, resource exchange and interorganizationa reations. Thus, the appication of network anaysis 759

4 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences methods has severa advantages. First, structura anaysis synthesizes data across different bocks of organizations, i.e. manufacturers and their suppiers at different eves of the suppy chain. Second, it permits the assessment of individua company strategies in the context of other reationships. Third, the network mode offers a broader context for assessing the impications of EDI. However, its imitations incude doubts regarding its theoretica grounding [30] and the ack of concepts and toos reevant to business reationships as opposed to socia ones [41]. 3: Deveoping the research framework Thus, the three approaches compement each other very we, in that the weaknesses of one are mosty mitigated by the strengths of one of the others. Athough each perspective has a distinct focus, various concepts have paraes in the other two theories. For exampe, transaction cost theory shares an interest in vertica integration and opportunism with resource dependence theory. Drawing on the three theoretica perspectives, we extracted the three themes of efficiency, dependence and structure as a foundation for the framework. These are the key dimensious of automotive manufacturer-suppier reationships most ikey to be affected by new coordination mechanisms [6;25]. In this section, we discuss the seection of concepts within the three themes, in order to produce the fina research framework, depicted in Figure 1. The framework comprises: the environmenta context and the coordination strategy as we as efficiency, structure and dependence. In each area, the seection of both quantitative and quaitative measures that capture the richness of the reationships invoved is inherenty probematic. We have made use of existing vaidated measures, mainy from the organizationa iterature, but the context of the automotive industry made it necessary to modify some and add new ones. 3.1: Environmenta context Environmenta variabes feature within a three theoretica approaches [1;43]. They not ony affect the structure of reationships but aso the coordination of activities [12] and this is especiay the case in the turbuent automotive industry. According to the iterature, uncertainty is a key environmenta dimension affecting the reationships and the mode and costs of transactions [27;31;44]. A principa source of uncertainty is the variabiity of resources. The perceived magnitude of environmenta uncertainty is a function of the compexity or heterogeneity of the environment [27;44]. An uncertain environment is characterized by the decision makers need for arge amounts of information which are widey distributed in a heterogeneous environment. Foowing Achro et a. [] we conceptuaize the environment as a dynamic reaity without we-defined shape, size or eements. Therefore, it can best be characterized as a perceptua variabe and reevant measures are the perceived rate of change and environmenta uncertainty, its variabiity and instabiity as we as compexity. 3.2: Interorganizationa coordination When environments are changing rapidy, due for exampe to increased competition, then organizations become more compex and differentiated in their interna structure and processes [27]. This can aso appy to the coordination of activities within a production network. We argue that the scope and intensity of ED1 use is argey determined by the needs of interorganizationa coordination. These are high in task scope, i.e. they require inputs from different kinds of organizations, and are arge-scae in that they require intense effort for a ong duration covering many tasks. Our assumption is that as organizations increase their interaction, ED1 use increases in parae. This coordination mechanism, in turn, affects the efficiency and interdependency of reations. In terms of intensity, information intensity [32] is seen as a function of the information content of the product and information intensity of the vaue chain. Product information intensity indicates the extent to which the organization s customers utiize information for the seection, purchase, use and maintenance of its products/services. Vaue chain information intensity represents the extent to which the organization requires information to acquire, manufacture, distribute, se and maintain its products or services. Indicators of the scope of ED1 use incude the impementation status and eve of integration into interna panning and contro systems, which is reated to the overa eve of computer appications in an organization. Additionay, the tota number of ED1 trading partners and the number of different ED1 messages indicate the extent to which ED1 is being used. The intensity of interaction through ED1 can be measured through the percentage of a firm s suppy base invoved in an ED1 inkage and the number of different messages exchanged as we as the percentage of the tota voume of purchases transmitted using an ED1 system. A more subjective measure woud be an organization s own assessment of their ED1 use in comparison to their competitors. 760

5 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Interdependence [email protected] _.-. Adaptation Differentiation ponne&@ :.. ji /Srrucfurt:;j ; She Cimate - Stabiity _ opporhmism _ Redundancy Centraity Competition Dynamics Compexity Uncertainty Compex@.,, Transaction costs Uncertainty... Asset Specificity Figure 1. The research framework 3.3: Efficiency The organizationa iterature suggests that greater efficiency is achieved through the routinization of work and the bureaucratization of structure [39] but there much ess agreement about the best approach to effectiveness [3]. These concepts are particuary probematic for interorganizationa networks because of difficuties in defining the focus of investigation. Regarding cost efficiency, the introduction of ED1 woud be expected to ead to a fa in transaction costs aong the suppy chain. However, transaction uncertainty and bounded rationaity ead to mutua dependence based on asset specificity and the sma numbers of aternative partners. This enhances the ikeihood of opportunistic behavior and utimatey increased transaction costs. However, as the tota transaction costs are often difficut to quantify, three additiona constructs are needed for the anaysis: uncertainty, compexity and specificity. Within the dynamic, customer-oriented automotive industry, uncertainty is highy reevant, originating in both the product and the transaction process. Possibe sources of uncertainty are: the number and content of orders and the suppiers abiity to meet production schedues. Product uncertainty incudes sudden changes of voume and frequency of redesign whie transaction uncertainty refers to the carity, predictabiity and frequency of the transactions themseves. These forms of uncertainty may ead to inefficiencies and additiona costs, such as buffer stocks or non-optima production scheduing. Efficiency can thus be seen as a perceptua variabe which measures an organization s perception about change, unanayzabiity, ambiguity and uncertainty in the transaction process. A more quantitative measure woud be the number of days for which the scheduing process is thought to be predictabe and the amount of buffer stock hodings. Compexity can aso be viewed in terms of products and transactions. Product compexity refers to the size, standardization, vaue and range of products exchanged, ranging from entire sub-assembies to very simpe components. Transaction compexity refers to the compexity of the processes, tasks and procedures, which again is highy reevant in the context of combining arge numbers of parts and assembies to manufacture an automobie. 761

6 Proceedings of the 28th Annua Hawaii Intemationa Conference on System Sciences Specificity refers to the degree to which investments in an exchange reationship can be used for aternative purposes. Dedicated investments incude know-how, specific mamtfacturing or ogistics processes and the choice of ocation. Another source of specificity is the time and effort needed to become famiiar with a trading partner s way of doing business and the extent of coordination required. Again specificity can reate to both products and transactions. Product specificity, referring to the expertise and toos required for specific customers, is refected in the need for suppiers to taior their products to the manufacturers needs. On the other hand, transaction specificity refers to the customized processes needed to support transactions with a particuar customer. 3.4: Structure The network perspective offers the opportunity to examine the impact of ED1 on the structure of the foca network. Our assumption is that these structura dimensions are shaped by environmenta forces and the choice of coordination mechanisms. Reevant variabes incude centraity and size, in terms of the number of ED1 trading partners and the proportion of business covered through EDI. As networks grow, there is a tendency for connectivity to decine and differentiation and compexity to increase. Hence, connectivity (the number of channes through which information fows) needs to be considered, as we as the number and intensity of transactions and the range of message types. Other important aspects incude mutipex@ (membership of mutipe networks) which heps to measure the number of trading partners, differentiation (the division of abor within the network) which refers to the depth of production, stabiity (frequency of switching between trading partners) and redundancy (number of functionay equivaent reationships). 3.5: Dependence The resource dependency approach has been widey used with interorganizationa reationships [311. We define dependence as the degree to which an organization needs externa resources in order to achieve its own objectives. This is reated to the specificity of investments and how to safeguard them. Our concern is not ony the tota dependency, but the extent that vertica dependencies are singuar or mutipe. The more an organization reies on a singe source, the greater the ikeihood that a core organization wi contro the fow of resources [3]. The desire to contro singe sources has an effect on the structure of the reationship, namey the centraity of the network. Reevant variabes incude task interdependence, mutua adaptation and opportunistic behavior, and the usage of power. The entire reationship needs to be viewed against the poitica backdrop of the cimate of the reationship in terms of mutua commitment, persona ties, goa consensus and trust. We measure interdependence through the importance of reationships with particuar trading partners, the dependence on products and the importance of ogistics. The proportion of turnover with a trading partner has been used as a quantitative indicator for interdependence [18]. The importance of products and the costs of repacing a suppier can be based on the manufacturer s perceptions. The intensity of exchange of particuar products (synchronous activities, cose coordination required), the amount of buffer stocks and the time that passes before the non-avaiabiity of a product interrupts an organization s operations are other quantitative measures for the criticaity of ogistics. In terms of adaptation, manufacturers as we as suppiers are forced to invest in the reationship in terms of interna reorganization, rationaization and improved communication, athough computer controed manufacturing technoogies may reduce the specificity of equipment. However, the specitcity of adaptations in communication inks, ogistics and coordination is increasing because each suppier-manufacturer reationship is becoming more cosey integrated and managed. Reevant measures are eve of investment and perceived specificity. Where trading partners are dependent on each other, they may need commitments or safeguards to prevent opportunistic behavior [20;45]. If both parties have an investment at risk they may then be wiing to deveop a coser reationship. A substantia investment in ED1 by both parties can be regarded as such a commitment and this may reduce monitoring and enforcement costs. The number of aternative trading partners and the eve of mutua adaptation are indicators of potentiay opportunistic behavior as we as the past history of the reationship. A key assumption in transaction cost theory is that market reationships are inherenty based on distrust [44]; for exampe, buyers are supposedy worried that a singe source wi take advantage of them. However, whereas markets (and hierarchies) are characterized as ow-trust coordination mechanisms, a cimate of trust is the hamark of interorganizationa networks. Trust is a concept ony recenty brought into buyer-seer research [ 131. Dwyer et a. [ 131 distinguish between resiient trust, which refers to the predictabiity of the mora integrity and goodwi of prospective network members, and fragie trust which can ony be sustained by contractua 762

7 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences safeguards. The investment in ED1 may hep to safeguard situations of fragie trust and buid up resiient trust. In our context, the concept of interorganizationa cimate refers to the quaity of the business reationship between suppier and car manufacturer. We use this concept to assess whether a reationship is perceived to be equitabe and satisfjing [ 151. Possibe measures are the extent of goa consensus and the perception of a productive and satisfying reationship as we as the perceived eve of trust. Power is a key concept in resource dependence theory but its operationaization is uncear and it is diticut to measure directy [18]. The traditiona dimensions of power [16] were refined by Thorei [40] into five sources of power: economic power, technoogica power, expertise or knowedge power, trust and egitimacy; which he then appied to a network of organizations. Reve [35] distinguishes between potentia power, enacted power and perceived power, of which the first two are regarded as objective measures, whie the atter can ony be measured, if at a, in a subjective manner. However, a three types are somewhat difbcut to conceptuaize. We attempt to measure power by focusing on the perceived extent to which a manufacturer exercises power over suppiers and how ED1 use affects contro and Muence. This is reated to the degree of consensus among organizations regarding their goas and objectives and the ack of confict between organizations. Power can aso be seen in the quaity (accuracy, comprehensiveness, timeiness) of the information provided, in that a dominant trading partner may demand very high quaity information but may ony offer much worse information in return. 4: Appication of the framework In order to show the utiity of the framework, we appy it in this section to deveop some iustrative propositions. These are not exhaustive propositions, nor are they aways entirey consistent, refecting the different theoretica origins. Nevertheess, we fee that they do demonstrate the power of the framework to dea with compex interorganizationa reationships. 4.1: Environment ED1 use has been stimuated by factors reated to environmenta uncertainty, such as high eves of competitive pressure and the imited ife of products [23]. Organizations can address uncertainty in product demand through fexibe manufacturing for which ED1 is an important enaber in terms of faster order processing and the impementation of JIT inventory management [29]. The consequent dramatic cuts in inventories and work in progress reduce compexity and costs [36]. Thus, one coud predict that as environmenta uncertainty and compexity in the automotive industry increase, the pressure for vertica coordination and integration of interorganizationa processes wi increase. This woud ead to more intensive interaction and a higher degree of formaization through EDI. Proposition I: ED1 serves as part of a coping strategy to forecast or absorb environmenta changes in order to achieve a reiabe pattern of resource fows and exchanges. Proposition 2: Compexity and uncertainty of production, as we as ogistics, drive organizations to increase their use of EDI. 4.2: Effkiency IT has been shown to reduce transaction costs whie enabing improved management of the heightened operating risk [23] but, at the same time, the cost of deveoping and maintaining an interorganizationa information system may aso increase transaction costs. These additiona costs may not be equay distributed among trading partners. Proposition 3: ED1 enabes efficient coordination of production processes and expands oca optimization across organizationa boundaries. Proposition 4: Efficiency gains through ED1 use are not equay distributed among car manufacturers and suppiers. 4.3: Structure ED1 might be used to increase efficiency and improve fexibiity, thereby enabing more compex, information intensive market structures to repace vertica integration [29]. However, with the exception of a few, simpe, owvaue components, there is itte opportunity for eectronic markets to emerge in the automotive industry. The compex components and the associated high asset specificity and interorganizationa dependence, mean that spot market transactions are rarey feasibe. Rather, organizations wi move to mixed mode network structures that contain eements of both markets and 763

8 Proceedings of the 28th Annua Hawaii internationa Conference on System Sciences hierarchies [22]. ED1 enabes oose couped partnerships [46]; ong-term, ow-confict reationships which aow firms to focus their efforts on core competencies. Proposition 5: ED1 faciitates virtua integration, contributing to the emergence of production networks by ensuring cost efficient contro of production processes. Gurbaxani and Whang [19] demonstrate that the introduction of ED1 can support either centraization or decentraization of decision rights and an increase or decrease in firm size. However, compex and highy speciaized reationships are best managed through hierarchica stye structures. Proposition 6: Car manufacturers are a dominant centra core whose performance objective is the efficiency of the tota production network through extensive use of EDIbased coordination. 4.4: Dependence Notionay, the use of ED1 can ead to either reduced or increased dependence on trading partners. Reduced dependence can resut from improved access to a range of strategic resources from other organizations. However, ED1 can aso increase an organization s dependence on others; for exampe, in JIT environments, increased interdependence is ikey if ED1 eads to higher coordination needs between manufacturers and suppiers. An integrated ED1 ink as a dedicated asset may aso reduce the number of aternative sources, reducing an organization s fexibiity to switch trading partners. However, organizations normay deveop strategies to increase their autonomy and they are more ikey to use ED1 to hep them manage externa dependencies. Proposition 7. ED1 can hep to manage externa dependencies by increasing the fexibiity of an organization to respond to uncontroabe variations in the environment New reationships normay require investments in customized assets by one or both parties in order to faciitate the production and fow of goods and services. These partner-specific investments create substantia switching costs and make the two parties highy interdependent. Where these investments (e.g. specific ED1 inks or process changes) are not redepoyabe, one party may act opportunisticay. However, the investments (incuding ED1 inks) coud create a substantia vaueadded component. Thus, the specificity of ED1 investments has to be considered in connection with other dedicated assets, such as new pant ocated near to a customer. Proposition 8: To impement JIT effectivey, manufacturers and partner suppiers have to make customized investments in EDI, pant and fexibe manufacturing systems that create mutua dependency. With increasing adaptation to the often idiosyncratic processes of trading partners, a cimate of mutua trust is becoming increasingy important [3]. Such a cimate is particuary important in a JIT environment that requires tight integration and sophisticated information exchange. Traditionay, automotive manufacturers exercised considerabe power and contro over their suppiers and it is questionabe whether recent deveopments have ed to more cooperative reationships [42]. Proposition 9: ED1 contributes to more cooperative reationships provided that organizations are wiing to cooperate and accept interdependencies. ED1 use can increase the eve of friction and confict between manufacturers and suppiers. Both the desire for more contro (manufacturers) and the reuctance to ose contro (suppiers) refect asymmetrica motives. Furthermore the interconnected environments in which these organizations operate can be seen to be poitica arenas characterized by injustice, information distortion, manipuation, expoitation, inequaity or confict [7;311. This suggests that power, infuence and confict become important perspectives for an anaysis of interorganizationa coordination. Proposition 10: ED1 systems coud change the Rower baance towards manufacturers who can exert considerabe infuence over their suppiers. 5: Concusion In summary, we successfuy integrated the three theoretica perspectives of transaction cost theory, resource dependence theory and the network perspective to produce a research framework. The framework comprised concepts, variabes and measures derived from 764

9 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences the theoretica approaches. We have shown that the appication of the framework is ikey to be usefu for studying the effects of ED1 on interorganizationa coordination. The framework covers the main dimensions of interorganizationa reationships that are most ikey to be affected by ED1 use. In this context we deveoped ten iustrative propositions that show the appicabiity of the framework. Further research wi be needed to understand fuy the impact of ED1 and the compatibiity of the theories. However, a few genera points can be usefuy emphasized here. Within a compex network of transaction reationships, both quantitative and quaitative aspects need to be measured. In each of the three key areas, quantitative measurements are feasibe; for exampe, changes in costs, organization size and the number of persona ties between trading partners refect efficiency and dependence. Simiary, the network structure can be party described in quantitative terms, such as the number of transactions aong each ink. However, imiting measurements to these quantitative aspects woud ignore such quaitative aspects as uncertainty and compexity (in the suppy chain efficiency), the power baance and goa consensus (regarding dependence) and the coordination and autonomy (in terms of the network structure). Thus, a combination of quantitative and quaitative measurement is essentia in order to capture the richness of the reationships and the impact of ED. However, great care has to be taken in seecting appropriate quantitative measures from the considerabe number avaiabe. It is crucia that the measures chosen satisfy criteria of measurabiity, verifiabiity and vaidity. Simiary, great care needs to be taken regarding the quaitative evauation. For critica aspects such as power and dependence, which are not directy measurabe, we are imited to surrogate measures, such as the perceptions of the peope invoved. Thus, we are constrained to some form of scae of importance or degree, which is wide open to subjective interpretation, both by the interviewees and the researchers. However, such scaes can be augmented by the use of critica incident interviewing techniques where interviewees having said, for exampe, that there is a huge adverse power imbaance in favor of the other trading partner, are asked to reca any objective consequences of this imbaance. Acknowedgment This paper is based on research supported by the Human Capita and Mobiity program of the Commission of the European Communities. We wish to thank the referees for their contributions to this paper. References Achro, R.S., T. Reve, and L.W. Stern. The Environment of Marketing Channe Dyads: A Framework for Comparative Anaysis. 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