Academic journal article Journal of Supply Chain Management

The Impact of Interorganizational Internet Communication on Purchasing Performance: A Study of Chinese Manufacturing Firms

Academic journal article Journal of Supply Chain Management

The Impact of Interorganizational Internet Communication on Purchasing Performance: A Study of Chinese Manufacturing Firms

Article excerpt

INTRODUCTION

It has been well documented that interorganizational communication is critical to effective management of an organization's purchasing practices and successful buyer-supplier strategic alliances (e.g., Mohr and Nevin 1990; Mohr and Spekman 1994; Monczka, Peterson and Handfield 1998; Claycomb and Frankwick 2004; Knemeyer and Murphy 2004; Kwon and Suh 2004). Traditionally, such communication is conducted through media such as mail, telephone, fax and face-to-face meetings. However, with the explosive growth of the Internet in the past decade, a variety of Internet technologies, ranging from simple communication applications, like e-mail, to more advanced tools, like extra-nets, have been adopted by numerous companies for meeting their intra- and interfirm communication needs.

The popularity of the Internet is primarily due to the following three factors: (1) the Internet allows companies to exchange information and data with trading partners in a much quicker and/or more convenient way than the traditional media (Clampitt 1991; Kettinger and Grover 1997; Warentin, Sayeed and Hightower 1997; Bird 2000); (2) the cost of Internet communication is significantly lower than that of other electronic-enabled communication modes such as electronic data interchange (EDI) and fax; and (3) the Internet communication enables one company to customize the information that it provides to its specific trading partners. Thus, the trading partners can obtain as much relevant information as they desire from the company's computer systems through the Internet.

Despite its increasing popularity in the business world as a communication and transaction tool, the issue of how to achieve most effective interorganizational Internet communication still remains a challenging task facing today's supply managers. This challenge has yet to be thoroughly addressed by academicians. Many prior studies on interorganizational communication have focused on information flows within a broad communication environment, where diverse communication modes (offline and online communication) are concurrently utilized to communicate across organizational boundaries. Therefore, their findings regarding the antecedents and consequences, as well as key dimensions, of interorganizational communication may not embrace the unique facets of Internet communication and consequently would have some constraints in their generalization of the online communication setting (e.g., Mohr and Nevin 1990; Mohr and Sohi 1995; Fredendall, Hopkins and Bhonsle 2005).

Moreover, most research focusing purely on Internet communication has limited its attention to a single Internet communication tool, such as e-mail, or to certain specific Internet-based interorganizational transaction systems, such as online procurement systems (e.g., Kettinger and Grover 1997; Croom 2000; Kaufmann and Carter 2004). Thus, these studies were insufficient in terms of providing a more comprehensive assessment of diverse Internet communication activities and their influence on business performance. The lack of systematic, empirical studies on overall interorganizational Internet communication makes it difficult for managers to determine how their resources and efforts should be best allocated for purposes of achieving high-quality interorganizational communication and enhancing cooperation with their business partners.

Therefore, the current study intends to expand the body of knowledge relating to interorganizational Internet communication by answering these four specific questions: (1) what are the key facets of interorganizational Internet communication activities?; (2) how do trading partners' concerns about Internet security risks affect their norms of Internet information sharing?; (3) how do the norms of Internet information sharing influence interorganizational Internet communication activities? and (4) how does the nature of interorganizational Internet communication activities impact the performance of the purchasing department (referred to as purchasing performance hereafter)? …

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