Academic journal article Management International Review

Does IT Integration Really Enhance Supplier Responsiveness in Global Supply Chains?

Academic journal article Management International Review

Does IT Integration Really Enhance Supplier Responsiveness in Global Supply Chains?

Article excerpt

Abstract:

In order to enhance local suppliers' responsiveness in global supply chain relationships, MNEs must work with their local suppliers to create new forms of relationship structures.

Cultural and country differences may limit the use and effectiveness of traditional tools that govern the relationships between MNE and their local suppliers.

* Drawing on the resource-based view and transaction cost economics, this study uses 219 Taiwanese electronics suppliers to examine the influence of information technology integration and trust on supply chain responsiveness in varied cultural distance conditions. We find that the process is mediated by a governance mechanism including cooperativeness efforts and MNEs control.

* This study demonstrates that the use of IT integration through B2B information technology and trust can help MNEs to enhance local suppliers' responsiveness in global supply chain relationships.

Keywords: Information technology * Trust. Global supply chain relationships * Cooperativeness * Control * Supplier responsiveness

Introduction and Motivation

Globalization has triggered significant structural change for the strategy of multinational enterprises (MNEs). With increasing global competition, MNEs have disintegrated their value-adding activities with their suppliers or subcontractors around the world (Buckley and Ghauri 2004). Driven by this mega trend, the manner in which MNEs effectively coordinate and control their global supply chain relationships with local suppliers becomes a critical task to enhance their competiveness.

Supply chain responsiveness has become one of the most important performance metrics for managers in today's time-based competition era (Handfield and Bechtel 2002; Hult et al. 2004). Industrial suppliers or subcontractors have been pushed to respond more quickly to their global supply chain customers' increasing demands. Despite the importance of supply chain responsiveness, the extant literature has not been explored the mechanism or process through which MNEs enhance their local supplier's responsiveness in their global supply chain relationships in (Hult et al. 2004).

In the marketing channel literature, cooperativeness and control have been treated as two crucial interorganizational governance mechanisms (Luo et al. 2010). Cooperativeness was regarded as a bilateral form of governance and control was a unilateral form of governance. While some studies have identified the importance of cooperativeness and control in interfirm relationships, empirical evidence on antecedents and outcomes of cooperativeness and control in governing channel relationships has been limited, especially in the international context.

Trust has been identified as one of the most important cooperativeness mechanisms which can help structure interfirm relationships. However, trust alone is not sufficient to structure the interfirm relationships due to its weak ties of nature. It has been argued that advancement of Internet and business to business (B2B) technology can complement trust as an enabler for managing interfirm relationships (Jean 2007; Jean et al. 2008). B2B technologies and Internet provides IT integration between buyers and sellers and thus reduce cooperativeness and control cost in the interorganizational relationships (Wang et al. 2006). Despite the importance of trust and IT integration, their roles as antecedents of different governance mechanism have not been fully examined. Moreover, although some studies already linked trust and IT integration to supplier responsiveness (Handfield and Bechtel 2002; Wang et al. 2006), the process by which this occurs has not been explored in the extant literature.

This study seeks to examine how trust and IT integration can impact cooperativeness and control and ultimately lead to higher supplier responsiveness in global supply chain relationships between MNEs and their local suppliers. …

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