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Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6° x 9° black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMi directly to order. ProQuest Information and Learning 300 North Zeeb Road, Ann Arbor, MI 48106-1346 USA 800-521-0600 UMI ® A Dissertation entitled Inter-Organizational Information System Use In S.apply Chain: Toward An Integration Of Competence Based And Transaction Cost Based Views Of The Firm By Lhengezhong Shi Submitted as partial fulfillment of the requirements for the Doctor of Philosophy Degree in Manufacturing Management honk5 =, >— Advisor: Dr.

Ragu-Nathan Graduate School College of Business Administration The University of Toledo December 2001 UMI Number: 3030860 Copyright 2001 by Shi, Zhengzhong All rights reserved. UMI ® UMI Microform 3030860 Copyright 2002 by Bell & Howell Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code.

Bell & Howell Information and Learning Company 300 North Zeeb Road P. Box 1346 Ann Arbor, Mi 48106-1346 COMMITTEE MEMBERS: Sa Tú September 21, 2001 Dr. Thuong Le J Professor of Marketing ⁄ 2⁄4 /⁄4 September 21, 2001 alter W. Olson Professor of Mechanical, Industrial & Manufacturing Engineering /Ấ_ => : ¿Ke p.

Biao Zhang — Associate Professor of Statistics Copyright © 2001 This document is copyrighted material. Under copyright law, no parts of this document may be reproduced without the expressed permission of the author. An Abstract Of Inter-Organtzational Information System Use In Supply Chain: Toward An Integration Of Competence Based And Transaction Cost Based Views Of The Firm By Lhengzhong Shi Submitted as partial fulfillment of the requirements for the Doctor of Philosophy Degree in Manufacturing Management December 2001 The tremendous impact of inter-organizational information systems (IOS) on supply chain management has been becoming more and more visible with the fast growing business-to- business e-commerce phenomenon. This dramatic growth is stimulated and embraced by rapid development of Internet technologies, increasing IS management sophistication, and the spread of strategic alliances.

Many case and survey studies have tried to investigate the various factors that will decide the success or failure of business-to-business e-commerce. Through an analysis of these studies, we find that there are two directions. The first direction follows the tradition of competence-based perspective by looking into firms’ IS competence and the other is to investigate the relationships within which the focal firm is embedded. While both of these two streams of research provided many insights, an integration of these two streams seems to be more promising both at the theoretical and empirical levels.

This dissertation is to investigate the IOS phenomenon in the supply chain by combining IS competence and supply chain relationships, which are based on competence and ‘ransaction costs views. Research framework addresses both antecedents and consequences of IOS use, including competence, relationship, inter-firm transaction costs, explicit coordination, and buyer benefits variables. Empirical data are collected through interviews and surveys. The research model is then tested by applying LISREL package.

Major findings are 1) institutional environment within which b- to-b e-commerce is established is critical to its success; 2) firms are not currently taking advantage of their IS function talents to tackle the b-to-b e-commerce hurdle; 3) the benefits of e-commerce will be manifested through the mediation of reduction of inter-firm transaction costs; and 4) in the Internet age, the inter-firm governance mechanism is moving toward the middle of market and hierarchy. For my parents Hueaan Shi and Huiming Lin Acknowledgements To pursue a Ph. D degree is a very precious opportunity because it not only challenges me to explore and advance the knowledge of business in general and b-to-b e-commerce in particular, but also provides me with an opportunity to work with many very bright and kind people. Among them, Drs.

Ragu-Nathan, as my dissertation co- chairs, have devoted a substantial portion of their valuable time to guide me through the dissertation process. The intense discussions at the beginning of dissertation proposal stage laid a solid foundation for the success of this dissertation. The succeeding careful directions through my data collection stage keep me motivated and confident to overcome the various barriers. The patience displayed by them in carefully reading through a succession of drafts of chapters of this dissertation makes me feel even guiltier of occupying too much of their very precious time.

My appreciation and gratitude for their help will never be adequately expressed. I am thankful to other committee members for their help in the dissertation process. Olson discussed with me about the potential sources of name list for the large-scale survey, the hypotheses, and the writing style. Zhang helped me have a better understanding of multivariate statistics and the beauty of mathematical thinking.

Through taking his class of probability and measure, I discovered the similarity of proving a theorem in mathematics and making a convincing argument in social science. Le discussed with me the meaning of IOS use and the importance of narrowing the dissertation model to a doable level at the early stage of the dissertation process. I am also in debt to many other professors and Ph. Among them are the former Ph.

D program director - Dr. Mark Vonderembse, organizational behavior seminar instructor - Dr. Williams Doll, my classmates and friends - Drs. Qiang Tu, Abraham Nham, Ahmad Syamil, and John Heinrichs.

Their generous helps and constant encouragements made my dissertation process much more enjoyable and rewarding. I am grateful to those managers who generously allow me to interview with them while they are very busy with their daily work. Further, this dissertation would not be possible without the support from more than 200 managers across this country who took their very precious time to answer my lengthy questionnaire. I am thankful to the College of Business Administration, the University of Toledo, for supporting this dissertation through Ph.

I am also thankful to the College of Business Administration, North Dakota State University, for graciously permitting me to use their facilities. Last but not the least I wish to express my sincere and deep appreciation to Dr. Jay Leitch, Dean of College of Business Administration at NDSU, for his support and comments on the final draft of this dissertation. Table of Contents ABSTRACT iv DEDICATION vì ACKNOWLEDGEMENTS vi LIST OF TABLES xv LIST OF FIGURES xvil CHAPTER ONE: INTRODUCTION 1.-- 5S cm HH ng ngu.

6 CHAPTER TWO: RESEARCH FRAMEWORK 2.2 TRANSACTION COST BASED-VIEW.GG SĂ GĂS SH HH ng nung nợ ll 2. APPLICATIONS OF THEORETICAL PERSPECTIVES ON IS USE IN SUPPLY CHAIN .3 RESEARCH FRAMEWORK: OVERVIEW. QQQQ HH HH nu nsee 16 2.4 KEY CONSTRUCTS: THEIR DEFINITIONS AND LITERATURE REVIEW. - G Ă SH HH ng 19 2.

- << HH vSESH K91 reecrzesee 19 2.3 Business Systems ThinẰking.--S SA HH HH gu 27 2. QQ GB Q SH S=SSkSSeeeeseeesrsecrs 27 2.10 Vendor DeV€ÏODIMTIE. 0 5x mg ng ko 28 24.Q Họ KH KH TT TH TH TH TH T0 TH nu 29 2.2 MANUFACTURER-SUPPLIER RELA TIONSHIP. S5 5S s SSSSS SE 9K neSSSeeeerseerseres 3i 2.

Q5 SG 5GB SA kesesrsseers 32 VÀ Z2 NNHI.5 Asset Specfficity/Reciprocal Asset Specificiy.6 Complementary Resource EndOWmens.3 TOS USE IN SUPPLY CHAIN Qu. essecececssececreccececeseoceccececssesesecsoeecececsesessesseceeseneseaees 40 PP “HH ô`Y* .2 Measurement of lOS Linkage.4 INTER-FIRM TRANSACTION COST IN SUPPLY CHAIN.1 CoordÌIdFÍOPI COSí. 5< nS *Sverererrekeererererrrecee 44 VỀ VAN? .- 7< -< se “tư ch HH nh nen erekree 48 PL Cu.5 THEORETICAL MODEL: HYPOTHESES .1 HYPOTHESIS 1: IS COMPETENCE IS POSITIVELY RELATED TO IOS USE IN SUPPLY CHAIN 53 2.2 HYPOTHESIS 2: THE MANUFACTURER-SUPPLIER RELATIONSHIP IS POSITIVELY RELATED TO IOS USE IN SUPPLY CHAIN. HYPOTHESIS 3: THE MANUFACTURER-SUPPLIER RELATIONSHIP IS POSITIVELY RELATED TO EXPLICIT COORDINATION .4 HYPOTHESIS 4: IOS USE IN SUPPLY CHAIN IMPACTS INTER-FIRM TRANSACTIONS 69 2.5 HYPOTHESIS 5: THE MORE IOS USE IN THE SUPPLY CHAIN, THE MORE THE EXPLICIT COORDINATION BETWEEN SUPPLY CHAIN MEMBERS.6 HYPOTHESIS 6: THE HIGHER THE IMPACT OF IOS USE ON INTER-FIRM TRANSACTIONS, THE MORE THE EXPLICIT COORDINATION BETWEEN SUPPLY CHAIN l2 ):) 0.7 HYPOTHESIS 7: THE HIGHER THE IMPACT OF IOS USE ON INTER-FIRM TRANSACTIONS, THE HIGHER THE BUYER BENEFITS .8 HYPOTHESIS 8: THE EXPLICIT COORDINATION BETWEEN SUPPLY CHAIN MEMBERS IS POSITIVELY RELATED TO BUYER BENEFTTS.

E4 Họ ch ng 77 CHAPTER THREE: INSTRUMENT DEVELOPMENT AND RESEARCH MODEL VALIDATION AND — PHASE ONE 3.nHY ng ng ng xen reree 78 3.1 Evidences oƒthe Validity oƒ lŠ Competence.2 Evidences of the Validity of Supply Chain Relationship Dimensions .3 Evidences of the Validity of TOS e.4 Constructs Validity In Generadl. RESEARCH MODEL VALIDATION.1 Research Model Validity in Generdl.2 IS Architecture and IOS Depth. The Impact oƒ Supplier Relationship Factors on IOS U%se.4 The Simultaneous Impacts of Trust and IS Competence on IOS use.5 The Impacts of [OS Use on QDDOPÍMHEST.~-ceS-eeeierer~ee 90 3.6 The Impacts of IOS se on Operational RÑi$k.7 The Umpacts 0ƒ pportunism on Buyer Benejfit4.8 The Impact of Supplier Relationship on Buayer Benefits. Customer Relationship or Supplier Relationship?.4 POTENTIAL FUTURE RESEARCH ISSUES .1 Environmental FqCÍOFS.2 Multiple RESPOnse sa es.3 Productivity and Profitability .5 PILOT STUDY: SAMPLING AND METHODS.,ôÔỎ 94 ch NT.

PHOT STUDY METHODS. HH HH g1 te retreerereree 96 3.6 RESULTS OF PILOT STUDY.- SH nnSA Teen.2 MANUFACTURER-SUPPLIER RELATIONSHIP.4 Decisions and ŠMHHHQFTV. I1OS USEIN SUPPLY CHAIN.-- Ăn Sà HH HH ng.4 IOS IMPACTS ON [NTER-FIRM TRANSACTIONG.4 Decisions and Summary .5 EXPLICIT COORDINATION AND BUYER BENEFITS. 123 CHAPTER FOUR: INSTRUMENT DEVELOPMENT--PHASE TWO 4.

126 443 LARGE-SCALE INSTRUMENT ASSESSMENT METHODOLOGYV. 132 44 CONSTRUCT RELIABILTTY AND VALIDIT Y.4 Construct Level Factor AnalySis .2 MANUFACTURER-SUPPLIER RELATIONSHIP.1 Measurement Hem nan T6.4 Construct Level Factor AnalySis .3 Dnidimensionadlity ÁnaÌWSÍS.4 Construct Level Factor ÁHQÌÏWSỈS.4 1OS IMPACTSON INTER-EIRM TRANSACTION.4 Construct Level Factor ÁndÌÙWSïX.5 EXPLICIT COORDINATION AND BUYER BENEFITS.exee 165 XU NH.3 Unidimensionality Anal ySis .4 Construct Level of Factor Analysis .6 SUMMARY OF THE LARGE-SCALE INSTRUMENT DEVELOPMENT.7 HYPOTHESES TESTING AT THE BI-CORRELATION LEVEL .cccsssessseusenereceeees 171 CHAPTER FIVE: RESEARCH MODEL VALIDATION — PHASE TWO 5I INTRODUCTION vo ccccsssecscscssssssessecescssssscsssesessesecosssessuvessssssssesssiesesescssssusesessusuvesce 173 5.2 STRUCTURE EQUATION MODEL ANALYSIS .3 THE HYPOTHESIZED STRUCTURAL MODEL u0.4 LISREL STRUCTURAL MODEL INDICES. 0) 20 /(Vỉìio©ỤỤ.1 Overall Fit Indices .2 Comparative Fit MeQsures .Q ĐA << HC CÁ HT nen vs ersesesee 178 5.5 LISREL STRUCTURAL MODEL TESTING .1 CONFIRMATORY FACTOR ANALYSIS OF MEASUREMENT MODELS .2 LISREL STRUCTURAL MODELING RESULTS. TQ HH SE SH kg cu ne na gu 1e eesseeee 183 5.1 HYPOTHESIS 1: IS COMPETENCE Is POSITIVELY RELATED TO IOS USE IN SupPLY CHAIN 183 5.

HYPOTHESIS 2: THE MANUFACTURER-SUPPLIER RELATIONSHIP IS POSITIVELY RELATED TO IOS SE IN SUPPLY CHAIN.QQ TQ ng ke ve xeeveeeee 184 5.3 HYPOTHESIS 3: THE MANUFACTURER-SUPPLIER RELATIONSHIP IS POSITIVELY RELATED TO EXPLICIT COORDINATION .4 HYPOTHESIS 4: IOS UsE IN SupPLy CHAIN IMPACTS INTER-FIRM TRANSACTIONS 185 5.5 HYPOTHESIS 5: THE MORE IOS UsE IN THE SupPLy CHAIN, THE MORE THE EXPLICIT COORDINATION BETWEEN SUPPLY CHAIN MEMBERG.6 HYPOTHESIS 6: THE HIGHER THE IMPACT OF IOS USE ON INTER-FIRM TRANSACTIONS, THE MORE THE EXPLICIT COORDINATION BETWEEN SUPPLY CHAIN N10.7 HYPOTHESIS 7: THE HIGHER THE IMPACT OF IOS USE ON INTER-FIRM TRANSACTIONS, THE HIGHER THE BUYER BENEFTTS.