Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009

The determinants and effects of relational governance on IOS usage in the

manufacturer-supplier relationships

QunHong Zhang ZhenYu Liu Jing Yan

School of Management , School of Management , Fujian Administration Institute
Xia’men University Xia’men University yanjing_1107@163.com
nrisland@yahoo.com.cn zhenyliu@xmu.edu.cn

Abstract representation of the patterns of interorganizational

Managing electronic cooperation in the
manufacturer-supplier relationship is a key to
successful development of an interorganizational
systems (IOS) usage, and identifying the determinants
of relational governance is important. However,
limited empirical researches have been made to
validate the effects of relational governance on IOS
usage between trading partners. From several
perspectives, We build an integrated framework, and
use 2 automobile and 4 airline companies in china,
124 usable responses to empirically evaluate the
model. Results show that relational governance
including joint planning and joint problems solving has
strong association with IOS usage in terms of
advantage and diversity. Furthermore, reciprocal
investment in form of IT and trust between
manufacturer and supplier are proved to effective to
promote IOS usage, these two determinants of
relational governance have a moderating effect on the
two dimensions of IOS usage . However,
interdependence and uncertainty are found to be not
effective to promote IOS usage.
Key-words: IOS, Relational governance,
Manufacturer-supplier relationship, Reciprocal
investment;
1. Introduction
Up to now, suppliers have used interorganizational
systems (IOS), such as electronic data
interchange(EDI) or resource planning systems (ERP),
to develop more cooperative and long-lasting
relationships with manufacturer. Transaction-specific
information technology (IT) investments are those
investments intended to support a specific
manufacturer-supplier relationship. For example, a
supplier might invest in specialized software and
equipments to produce customized or idiosyncratic
components for a manufacturing firm. IOS is viewed as
planned and managed ventures between independent
organizations (Kumar & Dissel, 1996) and as a
relationship. It is considered that the IOS structure is
equivalent to the structure of interfirm relationships.
A variety of studies have applied different
perspectives to explain the phenomena(e.g., Malone et
al, 1987; Zaheer and Venkatraman, 1994). Studies in
the information processing approach view that
uncertainty and information processing are the most
important issures in explaining cooperation. Studies in
transaction costs theory view that asset specificity is
considered as a primary source of uncertainty. The
relational perspective offers a different, less explicit set
of governance mechanism to persuade suppliers to
willingly make more transaction-specific investments.
Relational governance in this study refer to interfirm
exchanges that include significant relationship-specific
IT, combined with a high level of interorganizational
trust (Zaheer & Venkatraman, 1994). The presence of
trust and reciprocal investments have been described as
important antecedents to interfirm electronic
cooperation. Electronic cooperation in
interorganizational relationship has been generally
explained as a function of IOS, and Information
System (IS) literature has called this IOS-induced
cooperation as electronic integration, electronic
interdependence, information partnership, or relational
governance. IOS is viewed as contributing to
cooperation by posing IT specificity and increasing
interactions and information processing capabilities
between manufacturer and supplier.
In this article, we will discuss the relational
governance as a mode to coordinate business
relationships. The determinants of relational
governance and effects on IOS usage are then
discussed on basis of several perspectives and the
hypothesis are elaborated. The research framework is
tested on 2 automobile and 4 airlines companies in a
sample of 124 responses. The results, discussion and
limitation are drawn.

978-0-7695-3450-3/09 $25.00 © 2009 IEEE 1

 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009
2. Theoretical background
2.1. Transaction cost economics perspective
Many prior studies from transaction cost
perspective focus on whether IOS promotes
hierarchical governance mechanisms based on
intrafirm control, or market mediate mechanisms based
on interfirm relationships (Malone et al., 1987). Now,
The most widely accepted study about the impacts of
IT on cooperative interorganizational relationships is
the ‘move to the middle’ hypothesis presented by
Clemons et al.(1993). The new governance mode has
been described as value-adding partnerships, networks,
vertical quasi-integration, or strategic alliances. IOS
has played a vital role in the formation of these new
intermediate governance structures. According to
Clemons et al., IOS has the ability to reduce not only
the coordination cost but also the operation risk and the
opportunism risk, leading to more outsourcing, but
with fewer suppliers.
2.2. Social-political perspective
From the social-political perspective, Factors such
as conflict, dependence, power, commitment and trust
have been widely examined in empirical studies
analyzing the impacts of relational governance on IOS
usage. The socio-political stream argues that a firm
forms interfirm linkages primarily to gain control over
critical resources and thereby reduce uncertainty
(Anderson & Weitz, 1989).
Studies in marketing channels research have relied
heavily on social exchange theory in building models
of the exchange relationship between manufacturer and
supplier. According to this theory, power is regarded as
the most important sociological aspect of an
interorganizational relationship when one firm needs to
influence another’s decisions.
Partnership characteristics such as behavior and
climate of the relationships and product characteristics
are also examined as important factors for electronic
cooperation (Beansaou, 1995).
2.3. IOS perspective
IOS is defined as a set of IT resources shared
among organizations, which provides shared IT
services and supports information processing and
communication across organizations(Broadbent et al.,
1999). An IOS may be made up of various software
modules or systems that support business activities.
Massetti and Zmud (1996) propose that EDI use is a
multidimensional construct including volume, breadth,
diversity, and depth dimensions. Byrd and
Turner(2000) propose connectivity, compatibility,
application modularity, and data transparency, as four
facets of technical IOS infrastructure. Choi (2002)
proposes technological, structural, and informational
characteristics as three dimensions of inter-
organizational IOS infrastructure. Khawaja (2004)
provided comprehensive conceptualization of IOS
characteristics (IOS integration, IOS intelligence, and
system modularity) and supply chain integration
(flexible integration, strategic integration, and
operational integration).
3. Conceptual framework and Hypotheses
In this study, we propose an indirect effect of asset
specificity, dependence, trust, and uncertainty on IOS
usage in the manufacturer-supplier relationship. The
research model (Figure 1) proposes that asset
specificity, interdependence, trust, and uncertainty are
main determinants of relational governance. The model
also argues that the impact of these determinants on
IOS usage in term of diversity and advantage is
mediated through relational governance.
Determinants
Specificity
IOS usage
Diversity
Dependence Relational
governance
Advantage
Trust
Uncertainty
Figure 1 Research Framework
3.1. Relational governance
The relational governance does not solely rely on
the market forces or the power of fiat to coordinate the
relationship, but rather the governance relies on
cooperation. This implies that independent but closely
related manufacturers or suppliers can reduce their
range of activities and concentrate on a few core
competences. In the decision to cooperation with
others, relational governance reflect the degree to
which joint actions are established in a business
relationship (Bensaou & Venkatraman, 1995).
Relational governance, by definition, requires joint
efforts or actions taken by independent firms to achive
mutual outcomes or singular outcomes (Ander and
Narus, 1990). Relational governance are the bilateral
expectations that exchange partners will act in ways
that assist each other during the course of the
relationship. Relational governance exists in an
interfirm context when the exchange partners use
2
 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009
relational norms and/or expectations of continuity to
regulate opportunism.
Joint action between a manufacturer and its
supplier provides sources of competitive advantage in
downstream channels. A supplier can obtain better
intelligence about manufacturer requirements and
competitors’ moves through intensive joint action. Two
joint actions appear to be central to relational
governance, joint planning and joint problems solving
(Dyer and Singh, 1998). Joint planning allows mutual
expectations to be previously established and
cooperative efforts to be specified ex ante, while
through joint problem solving, a mutual satisfactory
solution may be reached. Joint action represents a
novel and attractive alternative to traditional
governance norms. Relational governance may absorb
the environmental instability through joint planning
and problem solving. Manufacturer and supplier may
employ relational governance in order to manage
environmental uncertainty. Wilson and Viosky(1997)
proposes joint undertaking of planning and scheduling
activities, joint ownership of the master production
schedule, adherence to manufacturing plans, and
visibility of information as operational depictions of
relational governance. Relational governance in this
study is described as the extent to which firms in the
manufacturer-supplier relationship take coordinated
actions so as to achieve mutual outcomes. Joint action
is defined as the extent to which manufacturers and
suppliers work together toward their respective or
common goals.
3.2. Determinants of relational governance
From transaction cost and socio-dependence
perspective, factors such as asset specificity,
interdependence, trust, and uncertainty, have been
widely examined in empirical studies analyzing the
determinants of relational governance.
Asset specificity
In the context of interfirm dyadic relationships,
asset specificity can be described as the extent to which
the value of a firm’s capital is specific to the
relationship with the other firm. Examples of
manufacturer-specific assets include(1) manufacturer
investment in training of its own and/or the supplier’s
personnel and (2) manufacturer installation of tools and
equipment, production, and/or logistics processes.
Reciprocal investments refer to transaction-specific
investments made by one partying an exchange
relationship, and can be considered as safeguarding its
investments in transaction-specific assets. Reciprocal
investments made by a firm tend to promote a long-
term and stable relationship with its business partner in
an exchange relationship by encouraging to increase
the level of cooperation. Prior empirical studies
support this assertion by finding positive association
between asset specificity and certain aspects of
relational governance such as joint actions. Based on
the theoretical reasoning and empirical findings, we
formulate the following hypothesis:
H1: The greater the interfirm’s asset specificity, the
greater the relational governance in the manufacturer-
supplier relationship.
Interdependence
Interdependence is a crucial concept in marketing
channel research. Channel researchers have often
derived their definitions of dependence from Emerson
conceptualization of power-dependence theory. Each
party’s dependence on its partner is determined by (1)
its motivation investment in the relationship, and (2)
the replaceability of the partner. Kumar et al.(1996)
argued that a comprehensive view of the channel
interdependence structure must include total
interdependence and interdependence asymmetry.
Interdependence is critical for promoting cooperation
and adaptation in relational exchange and a key
contributor to partner commitment (Morgan and Hunt,
1994). By fostering interdependence between
exchange partners, exchange relationships create the
scope for opportunism. Dependence is defined as a
firm’s need to maintain a relationship to achieve to
achieve common desired goals, and it is chosen as a
major determinant of relational governance and a vital
construct for understanding interfirm relationships.
Practically, a firm’s dependence on its exchange
partner is a necessary condition for relational exchange.
Join action is likely to be most intensive when both a
manufacturer and a supplier are highly dependent on
each other. One dependence-balancing mechanism for
a manufacturer is to engage in intensive joint action
with its supplier to increase the supplier’s motivation
investment in goals mediated by the manufacturer,
thereby increasing supplier dependence on the
manufacturer. As joint action increases, each firm is
likely to treat the other firm as an important business
partner, interdependence is likely to be balanced, and
transaction benefits will be enhanced. The various
elements of the channel interdependence structure can
have diverse effects on the member’s attitudes and
behavior. We posit that interdependence will have
negative effect on relational governance.
H2: The greater interdependence between
manufacturer and supplier, the lower the relational
governance.
Trust
Trust is another aspect of interfirm exchange
relation relationship, which can be viewed as one
party’s confidence in the reliability and integrity of an
exchange partner. TCE (Transaction Cost Economics)
contends that trust is a key relational characteristic to
3
 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009
build long-terms relationship. In the current context,
trust refers to the manufacturer’s expectation that the
supplier will act to benefit the manufacturer’s interests
regardless of the manufacture’s ability to monitor such
behavior(Anderson & Weitz, 1989). The presence of
trust in relational governance is a basic concept(Zaheer
& Venkatraman, 1995). Defining in a broad sense, trust
reflects the extent to which negotiations are fair and
commitments are sustained and a party’s belief that its
requirements will be fulfilled through future actions
undertaken by the other party (Anderson & Weitz,
1989). We argue that perceived trust will lead trading
partners to have a more cooperative relationship.
H3: The greater the trust, the greater the relational
governance in the manufacturer-supplier relationship.
Uncertainty
According to TCT, uncertainty is another key factor
to consider in formulating governance decisions.
Defined as the inability to predict partner behavior or
changes in the external environment, uncertainty gives
rise to an adaptation problem. Environment uncertainty
increases information asymmetry and encourages
exchanger to behave opportunistically. The
uncertainty is derived from the construct of
environmental instability that refers to the volatility
and diversity of the market, customer preference,
customer demand and competitors. However, prior
theoretical and empirical studies do not provide a
consensus on the nature of the relationship between
uncertainty and relational governance. Sutcliffe and
Zaheer (1998) offered a useful framework to study the
role of uncertainty in governance choice by classifying
it into three distinct forms: primary uncertainty,
competitive uncertainty, and partnership uncertainty. In
this study partnership uncertainty could be particularly
important in the manufacturer-supplier relationship. A
manufacturer experiences decision-making uncertainty
about its supplier when the manufacturer is unable to
predict supplier performance on key variables like
price, delivery, and adaptability. With uncertainty, a
manufacturer is expected to seek flexibility in its
exchange relationships to cope with future conditions.
Then we postulate that a manufacturer or supplier
facing a high level of uncertainty from its trading
partner will not be motivated to cooperate.
H4: The greater the uncertainty, the lower the
relational governance in manufacturer-supplier
relationship.
3.3. IOS usage
There are many IOS usage. Electronic Data
Interexchange (EDI) is the most popular IOS
system( Croom, 2005). EDI provides a common
platform for the exchange of business documents and
other systems used by organization.
In IOS literature, most studies use EDI as a
measure of IOS use. Hart and Saunders(1997)
measured EDI use along two dimension: volume and
diversity of transaction, and showed that inter-firm
trust fosters more effective EDI use, however, supplier
power does not increase the EDI use. Bensaou and
Venkatraman(1995) proposed that intensity of EDI use
comprises of two dimensions: exchange of a wide
range of documents and ability to support interaction
across various functional areas. Masseti and Zmud
(1996) proposed that EDI use is a multi dimensional
construct: advantage, breadth, diversity, and depth. In
according with prior studies on dyadic EDI usage in
interfirm relationship, we particularly focus on the two
dimensions of advantage and diversity that many firms
are concerned with when developing an EDI network
with their partners. EDI diversity refers to the extent to
which different types of EDI document sets are
exchanged between trading partners. IOS advantage
can be described as the benefit is acquired through
IOS. IOS can lead to order response time reductions,
facilitate better inventory control, and provide timely
and accurate information for decision making.
Integrated IOS also provide the underlying
infrastructure that enhances the ability of firms to
effectively manage non-routine events and
emergencies. With respect to the main effects of
cooperation in the interfirm relationship on the level of
EDI usage, we formally construct the following
hypotheses:
H5-1: Relational governance is positive effect on
IOS usage in terms of advantage.
H5-2: Relational governance is positive effect on
IOS usage in terms of diversity.
4. Research Methodology
4.1. Data collection and sample
Since the study was an explaratory research, some
typical cases were selected, including 2 medium and
small scale automobile companies and 4 airline
companies. Data were collected through email or face
to face interview with IT managers. 200 questionaires
were sent out, total number of responses is 132, and
number of usabe is 124. Responses in 2 automobile
companies are 21, 17 respectively, and in 4 airline
companies are 27, 16, 31, 12 respectively.
4.2. Operational Measurement
We began the instrument development process with
a search for prior studies that contained scales for the
constructs used in our study. Since existing scales that
were proven to be reliable and valid measures were
available for most of the constructs, we adapted them
4
 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009

for this study. All latent constructs were measured with interdependence and uncertainty is high (0.76), for that
multiple items on seven-point Likert Scales, ranging the more uncertain of environment, the more
from 1 (strongly disagree) to 7 (strongly agree). The interdependence between manufacturer and supplier is
Appendix lists the operational items and the sources necessary.
we used for each construct. Table1 Reliabilities and Item loadings
item Loading Eigen Variance Cronbach’s
value Extracted ¢
5. Data analysis Asset specificity
q1 0.662*
We evaluated the validity and reliability analysis q2 0.703* 0.87
using SPSS 13.0 and the measurement model by means q3 0.843 2.345 67.58%
of a confirmatory factor analysis (CFA) using AMOS q4 0.692*
Dependence
5.0. AMOS is an acronym for “Analysis of Moment
Structures”, which allows researchers to simply q5 0.891*
q6 0.709* 3.121 46.28% 0.89
instruct the program to draw the hypothesized model
for evaluation. q7 0.817*
Trust
5.1 Validity and reliability analysis
q8 0.729*
The analyses have been conducted in multiple q9 0.769* 1.781 53.59% 0.79
stages such that results from these can collectively help q10 0.643*
assess the proposed framework and hypotheses. When q11 0.847
multiple-item scales are used to measure latent Uncertainty
constructs and a composite score based on these items q12 0.692*
is used in further analyses, it is important to assess the q13 0.410* 2.014 62.41% 0.62
validity and reliability of the scales used. Table 1 q14 0.789*
provides the results of validity and reliability analysis. q15 0.722*
Table1 displays the composite reliability scores for Relational governance
each of the seven constructs. Composite reliability is q16 0.809*
similar to Cronbach’s alpha ( ¢ ), and reflects the q17 0.829* 2.098 39.31% 0.91
internal consistency of the indicators measuring each q18 0.845
q19 0.357*
construct. Results show that all seven constructs have q20 0.846*
composite reliability scores greater than or near to the IOS Diversity
commonly recommended 0.7 benchmark, exhibiting an q21 0.762*
acceptable level of internal consistency. q22 0.802* 1.198 59.11% 0.85
Convergent validity ( i.e. the degree of association q23 0.756*
between measures of a construct ) was assessed by q24 0.874*
reviewing the significance for the factor loadings. As IOS Advantage
shown in table1, most factor loading are larger than q25 0.881*
q26 0.812* 1.562 60.23% 0.72
0.6, except item q13 and q19, the factor loading of
q27 0.798*
which is 0.410 and 0.357. The p value of item q3
* indicates significance at p<0.005
(p=0.213), q11 (p=0.038) and q18 (p=0.019) are not
Table 2 Construct correlation Matrix
significant. These five items will be ignored in the
structural equation model. The eigenvalue and variance SPE DEP TRU UNC REL DIV ADV
extracted for a latent construct were computed for each
multiple indicator construct in the model. The variance Specificity 1.00
extracted values all exceeded 0.50, and the eigenvalue Dependence 0.44* 1.00
is greater than 1, which are the acceptable values.
Discriminant validity (i.e. the degree to which Trust 0.67* 0.58* 1.00
items of constructs are distinct) can be empirically Uncertainty 0.62* 0.76* 0.65* 1.00
assessed in a weak sense by using the confidence
Relational 0.71* 0.49* 0.59* 0.67* 1.00
interval test (the inter-factor correction between two
constructs). The corrections among all the constructs Diversity 0.50* 0.48* 0.64* 0.41* 0.49* 1.00
are presented in Table2, the correction coefficient is
Advantage 0.55* 0.44* 0.47*. 0.69* 0.70* 0.42* 1.00
lower than 0.80. As a result, this confidence interval
test lends support to the discriminant validity of the
studied constructs. The correction coefficient between

5
 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009

5.2 Model fit measurement

q21 q22 q23 q24
Fit indices included in the present study are listed
in talbe4. The value of ·2/df ( Chi-square/ degrees of 0.82* 0.80* 0.73* 0.85*
freedom, 2.743) is below than the threshold value of 3.
Values greater than or near to 0.9 are desirable for GFI q1 0.64* IOS
(Goodness-of-Fit Index, 0.889) and AGFI (Adjusted q2 * Diversity
0.69* Asset
Goodness-of-Fit Index, 0.936), and values greater than q4 0.72* Specificity
or near to 0.8 are desirable for CFI (Comparative fit
index, 0.861) and NFI (Normed fit index, 0.794). 0.69*
Moreover, a value smaller than 0.1 is acceptable for q5 0.88* 0.65*
RMSEA (Root Mean Square Error of Approximation, q6 0.70* Dependence
0.084). The results show that the model reaches a q7 0.84*
reasonable goodness of fit.
Table 3 Model fit Measurement -0.35*
0.78* q16
Ð2/df GFI AGFI CFI NFI RMSEA 0.52* Relational 0.83* q17
q8 0.70* governance
2.743 0.889 0.936 0.861 0.794 0.084 0.80* q20
q9 0.82* Trust 0.72*
q10 0.61*
5.3 Analysis Results -0.41
IOS
Structure equation model analysis using Amos 5.0 Advantage
is used to investigate whether the determinants of q12 0.77**
relational governance influence IOS usage. Figure 2 Uncertainty 0.89** 0.79* 0.82*
q14 0.81*
shows the results of the structural model estimation
including standardized path coefficients, and q15 0.72* q25 q26 q27
significance for directional hypotheses. Reciprocal
asset investments have positive association with **significant at p<0.005, * significant at p<0.01.
relational governance (£=0.69). Trust also positively Figure2 Effect of relational governance on IOS usage
impacts relational governance(£=0.52). Based on the
significance of the path coefficients, H1 and H2 are
6. Conclusion, discussion and limitation
supported. However, interdependence between
manufacturer and supplier has negative effect on
relational governance (£=-0.35), in accord with the Based on several perspectives, the paper explored
the determinants and effects of relational governance
H2 . Uncertainty has no significant impact on relational
on IOS usage by empirical study. The results indicate
governance, the significant is higher than 0.05, so H4
that transaction-specific investments, trust, have strong
cannot be supported. Relational governance has
effects on electronic cooperation in the manufacturer-
positive effect on IOS usage in term of diversity(£
supplier relationship, which in turn increases the level
=0.65) and advantage(£=0.72). The coefficients and of electronic coordination via EDI. Relational
significance support H5-1 and H5-2. governance enhances the IOS usage between
manufacturer and supplier, and the determinants of
relational governance have indirect on the IOS usage.
The results also offer reciprocal special investments in
the form of IOS-usage, which is the most effective
strategy. As expected, our results show that joint
action between manufacturer and supplier is
significantly and positive related to two dimensions of
IOS usage. Combined with the significant association
between relational governance and its determinants
(asset specificity, trust, and interdependence) discussed
above, these findings corroborate our assertion that
these relational factors have indirect effects through an
intervening variable, relational governance, on the two
dimensions of IOS usage.

6
 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009
The empirical test finds a significant negative
relationship between interdependence in the
manufacturer and supplier. The unexpected finding can
be interpreted as follows: when a supplier’s primary
power exercised by its manufacturer is based on
considerable power exercised by its manufacturer, the
supplier actually tends to take a short-term view and
exchanges a minimum number of EDI document sets
with the manufacturer. Although the manufacturer
endeavors to increase the level of both IOS volume and
diversity, exercising power was not found to be
effective in increasing IOS usage. With respect to the
effects of reciprocal asset investments, our results find
positive association with both IOS advantage and
diversity. It is in accordance with our prediction that
supplier would increase the level of IOS usage with the
manufacturer when they were given greater IOS
assistance from the manufacturer such as hardware or
software support, education, and training. That is, the
manufacturer’s strategy of providing IOS support was
empirically validated to be effective to induce a high
level of electronic cooperation through IOS
transactions from its suppliers.
This research had some limitations for some
constrains. First, we have emphasis on six companies
only, we did not do a longitude study in many cases.
Second, while some variables in our study were
bilateral (e.g., relational governance, and dependence),
the data were obtained from only one party of the
relationship. Third we cannot collect data dynamically,
and we did not consider the change of relational
governance. Finally, our study measured the
operationalization of IOS usage by advantage and
diversity, this is not enough.
7. Acknowledgement
This research was Supported by Program for New
Century Excellent Talents in University (0000-
X07173) and by National Natural Science Foundation
of China(70372070).
8. References
[1] Kumar K., Dissel H., Sustainable Collaboration:
Managing conflict and cooperation in interorganization
systems. MIS Quarterly, 1996, 9:279-299.
[2] Zaheer A., Venkatraman N., Determinants of Electronic
Integration in the Insurance Industry: An Empirical Test,
Management Science, 1994, 40(5):549-566.
[3] Anderson J.C., Narus J.A.. A model of the Distributor-
Manufacturer working relationships. Journal of Marketing,
1990, 54:42-58.
[4] Malone T., Yates J., Benjamin S.. Electronic Markets and
Electronic Hierarchies. Communications of the ACM, 1987,
30(6):484-497.
[5] Clemons, E.K., Reddi S.P., & Row M.. The impact of
information on the organization of economic activity: The
‘move to the middle’ hypothesis. Journal of Management
Information Systems, 1993, 19(2):9-35.
[6] Anderson J.C., Weitz B.. Determinants of Continuity in
Conventional Industrial Channel Dyads. Marketing Science,
1989, 8(4):310-323.
[7] Bansaou M., Venkatraman N., Configurations of
interorganizational relationships: A comparison between U.S.
and Japanese automakers. Management Science, 1995,
41:1471-1492.
[8] Broadbent M., Weill P., et al.. The implications of
information technology infrastructure for business process
redesign. MIS Quarterly, 1999, 23(2):159-182.
[9] Massetti B.L., Zmud R.W.. Measuring the extent of EDI
usage in complex organizations: Strategies and illustrative,
1996, examples. MIS Quarterly, 20(3):331-345.
[10] Byrd T.A., Turner D.E., Measuring the flexibility of
information technology infrastructure: Exploratory analysis
of a construct. Journal of Management Information Systems,
2000, 17(1):167-208.
[11] Choi H.. A model of interorganizational information
technology infrastructure and electronic cooperation between
firms in supply chain, Americas Conference on information
systems, 2002.
[12] Khawaja A. Information technology antecedents to
supply chain integration and firm performance, A doctor
dissertation, University of South Carolina, 2004
[13] Anderson J.C., Narus J.A.. A model of the Distributor-
Manufacturer working relationships. Journal of Marketing,
1990, 54:42-58.
[14] Dyer J.H., Singh H.. The relational view: Cooperative
strategy and sources of interorganizational competitive
advantage. Academy of Management review, 1998, 23:660-
679.
[15] Wilson E.J., Viosky R.P.. Partnering relationship
activities: Building theory from case study research. Journal
of Business Research, 1997, 39:59-70.
[16] Morgan R.M., Hunt S.D. The Commitment-Trust
Theory of Relationship Marketing, journal of Marketing,
1994,20-38.
[17] Sutcliffe K.M., Zaheer A. Uncertainty in the Transaction
Environment :An Empirical Test. Strategic Management
Journal, 1998; 19(2): 1-13.
7
 Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009

[18] Croom S. The impact of E-business on supply chain
management: An empirical study of key developments,
international journal of operations and production
management, 2005, 25(1):55-73.
[19] Hart P., Saunders C.. Power and trust: critical factors in
the adoption and use of electronic data exchange,
Organization science, 1997, 8(1):23-42.

Appendix survey instrument

Construct and measure items Reference source
Asset specificity Claro &Hagelaar
q1:Our company has made investments in resource dedicate to the relationship. (2003);
q2:Our operating process has been tailored to meet the requirement of dealing. Joshi & Stump(1999)
q3:The procedures/routines we have developed are tailored to their particular situation.
q4:Training our people has involved substantial commitments of time and money.
Dependence Das & Teng(2000);
q5: Our company can benefit greater in the relationship than act alone.
q6: Our company and supplier face with mutual business opportunity or threat.
q7: Our company and supplier share key resource and technology.
Trust Dyer & Singh(1998);
q8: We expect supplier to be working with us for a long time. Morgan & Hunt(1999);
q9: There is close, person interaction between the partners
q10: The relationship among partners is characterized by high reciprocity.
q11: The relationship among partners is characterized by mutual trust.
Uncertainty Joshi & Compbell(2003);
q 12: Customer preferences are continually evolving in our industry. Joshi & Stump(1999)
q 13: Customer demand for our product varies continuously.
q14: Our major competitors are continually introducing new products to the market.
q 15: Our major competitors are continually devising new selling strategies.
Relational governance Joshi & Stump(1988);
q16: We rely on our mutual understanding with supplier to assign role of each other. Claro & Hagelaar (2003);
q17: We manage unexpected events by rely on our mutual understanding with the supplier. Zaheer(1995)
q18: We rely on mutual understanding of continued business to resolve problems.
q19: Our company shares long-term plans of our products with this buyer.
q 20: Our company and supplier are committed to improvements that may benefit each other.
IOS Diversity Hart & Saunders(1998)
q25: A variety of data types.
q26: A variety of data formats in each data type.
q27: a variety of database and protocols.
IOS advantage Premkumar &
q 21: Using IOS reduces order response time. Ramamurthy
q 22: Using IOS cuts cost in operations, and facilitates better inventory control. (1995)
q 23: Using IOS provides timely and accurate information for decision making.
q24: Using IOS aids in service differentiation.