Interorganizational Cooperation: The Role of Information Technology - An Empirical Comparison of US and Japanese Supplier Relations

Also INSEAD Working Paper N 1994/68/TM/SM This paper explores the comparative and cumulative influence of a number of factors on the perceived level of cooperation in a dyadic relationship. Drawing upon the transaction costs economics, organisation theory and information systems literatures, the author hypotheses three sets of key influences: 1) factors exogenous to the relationship, i.e. the characteristics of the environment within which the relationship operates, and factors endogenous to the relationship including 2) economic and behavioural characteristics of the relationship, and 3) interorganisational information technology applications. These factors have been independently examined in separate research streams. A key contribution of this study is therefore to conceptually and empirically capture their collective influence on cooperation. The author then empirically tests the five hypotheses developed, within the context of buyer-seller relationships in the US and Japanese automobile industries. Multiple regressions conducted on a data set of 447 distinct relationships indicate that the relational characteristics (i.e., the behavioural climate of the relationship) are the most robust predictor of cooperation in both countries when compared with other structural (e.g. asset specificity) or technological factors (use of EDI - electronic data interchange). Environmental uncertainty (i.e. technological unpredictability) is positively associated with cooperation in Japanese supplier relations, which suggests that cooperation can act as an uncertainty absorption mechanism. Governance structure is a strong predictor of cooperation in both samples, but with opposite sign. Similarly, information technology (IT) does not play the same predictive role in the two country samples. Significant only in Japan, it reflects an ‘electronic partnership’ approach to the use of IT supplier relations.