Interfirm IT Capability Profiles and Communications for Cocreating Relational Value: Evidence from the Logistics Industry

This study seeks to identify the means by which information technology helps cocreate relational value in the context of interfirm relationships in the logistics industry--a large and information-intensive industry. We identify a set of IT functionalities--single-location shipping, multilocation shipping, supply chain visibility, and financial settlement--that can be used to manage the flows of physical goods, information, and finances across locations in interfirm logistics processes. Progressively more advanced sets of IT functionalities, when implemented and used in the interfirm relationship to execute logistics processes, are proposed to form four distinct IT capability profiles of increased sophistication. Interfirm IT capability profiles of higher sophistication are proposed to help cocreate greater relational value by facilitating the flows of physical goods, information, and finances across locations in the interfirm logistics process. Besides their direct role in helping cocreate relational value, these interfirm IT capability profiles are proposed to further enhance relational value cocreation when complemented by interfirm communications for business development and IT development. Our empirical study was situated in one of the world's largest logistics suppliers and over 2,000 of its interfirm relationships with buyers across industries. Integrated data from four archival sources on the IT functionalities implemented and used in interfirm logistics relationships, interfirm communications, relational value (share of wallet and loyalty), and multiple control variables were collected. The results show that the proposed interfirm IT capability profiles and interfirm communications have both a direct and an interaction effect on relational value. Implications for cocreating relational value in interfirm relationships with the aid of IT are discussed.

[1]  Yoram Wind,et al.  Industrial Source Loyalty , 1970 .

[2]  Jacob Cohen,et al.  Applied multiple regression/correlation analysis for the behavioral sciences , 1979 .

[3]  K. Weick.  Educational organizations as loosely coupled systems , 1976, Gestión y Estrategia.

[4]  R B Chase,et al.  Where does the customer fit in a service operation? , 1978, Harvard business review.

[5]  Ian R. Macneil.  The new social contract: An inquiry into modern contractual relations , 1980 .

[6]  R. Oliver.  A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions , 1980 .

[7]  Richard B. Chase,et al.  The Customer Contact Approach to Services: Theoretical Bases and Practical Extensions , 1981, Oper. Res..

[8]  D. Collier.  The service sector revolution: the automation of services. , 1983, Long range planning.

[9]  David A. Tansik,et al.  The Customer Contact Model for Organization Design , 1983 .

[10]  James A. Narus,et al.  A Model of the Distributor's Perspective of Distributor-Manufacturer Working Relationships , 1984 .

[11]  Gareth R. Jones,et al.  Transaction Cost Analysis of Service Organization-Customer Exchange , 1986 .

[12]  Peter K. Mills,et al.  Managing Service Industries: Organizational Practices in a Postindustrial Economy , 1986 .

[13]  David E. Bowen,et al.  Managing customers as human resources in service organizations , 1986 .

[14]  J. Child.  Information Technology, Organization, and the Response to Strategic Challenges , 1987 .

[15]  F. Dwyer,et al.  Developing Buyer-Seller Relationships: , 1987 .

[16]  Yves L. Doz,et al.  Technology Partnerships between Larger and Smaller Firms: Some Critical Issues , 1987 .

[17]  Bart Victor,et al.  Interdependence: An Alternative Conceptualization , 1987 .

[18]  B. Schneider,et al.  A Framework for Analyzing Customer Service Orientations in Manufacturing , 1989 .

[19]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[20]  James A. Narus,et al.  A Model of Distributor Firm and Manufacturer Firm Working Partnerships , 1990 .

[21]  Jakki J. Mohr,et al.  Communication Strategies in Marketing Channels: A Theoretical Perspective , 1990 .

[22]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[23]  Kathy Kellermann.  Communication: Inherently strategic and primarily automatic , 1992 .

[24]  Barton A. Weitz,et al.  The Use of Pledges to Build and Sustain Commitment in Distribution Channels , 1992 .

[25]  J. MacKinnon,et al.  Estimation and inference in econometrics , 1994 .

[26]  P. Schoemaker,et al.  Strategic assets and organizational rent , 1993 .

[27]  J. M. Cortina,et al.  Interaction, Nonlinearity, and Multicollinearity: implications for Multiple Regression: , 1993 .

[28]  R. Rust,et al.  Customer satisfaction, customer retention, and market share , 1993 .

[29]  Erik Brynjolfsson,et al.  Information technology, incentives and the optimal number of suppliers , 1993, Proceedings of ELECTRO '94.

[30]  E. Zajac,et al.  FROM TRANSACTION COST TO TRANSACTIONAL VALUE ANALYSIS: IMPLICATIONS FOR THE STUDY OF INTERORGANIZATIONAL STRATEGIES* , 1993 .

[31]  Larry E. Toothaker,et al.  Multiple Regression: Testing and Interpreting Interactions , 1991 .

[32]  Rajiv Sabherwal,et al.  The Alignment between Organizational Critical Success Factors and Information Technology Capability in Academic Institutions , 1994 .

[33]  R. Kanter.  Collaborative advantage: The art of alliances , 1994 .

[34]  Shankar Ganesan.  Determinants of Long-Term Orientation in Buyer-Seller Relationships , 1994 .

[35]  S. Hunt,et al.  The Commitment-Trust Theory of Relationship Marketing , 1994 .

[36]  R. Gulati.  Does Familiarity Breed Trust? The Implications of Repeated Ties for Contractual Choice in Alliances , 1995 .

[37]  Jakki J. Mohr,et al.  Collaborative Communication in Interfirm Relationships: Moderating Effects of Integration and Control , 1996 .

[38]  Thomas O. Jones,et al.  Why Satisfied Customers Defect , 1996 .

[39]  William L. Fuerst,et al.  Information technology and sustained competitive advantage: a resource-based analysis , 1995 .

[40]  Richard B. Chase,et al.  Constructing an empirically derived measure for customer contact , 1995 .

[41]  N. Venkatraman,et al.  Configurations of inter-organizational relationships : a comparison between US and Japanese automakers , 1995 .

[42]  D. Mowery,et al.  Strategic alliances and interfirm knowledge transfer , 1996 .

[43]  W. Powell,et al.  Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology. , 1996 .

[44]  Joseph P. Cannon,et al.  An Examination of the Nature of Trust in Buyer–Seller Relationships: , 1997 .

[45]  J. H. Dyer.  Effective interim collaboration: how firms minimize transaction costs and maximise transaction value , 1997 .

[46]  Vivek Choudhury,et al.  Strategic Choices in the Development of Interorganizational Information Systems , 1997, Inf. Syst. Res..

[47]  M. Bensaou,et al.  Interorganizational Cooperation: The Role of Information Technology an Empirical Comparison of U.S. and Japanese Supplier Relations , 1997, Inf. Syst. Res..

[48]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[49]  Peter J. Lane,et al.  Relative absorptive capacity and interorganizational learning , 1998 .

[50]  Gary W. Loveman.  Employee Satisfaction, Customer Loyalty, and Financial Performance , 1998 .

[51]  R. Gulati,et al.  The Architecture of Cooperation: Managing Coordination Costs and Appropriation Concerns in Strategic Alliances , 1998 .

[52]  A. Lewin,et al.  The Co-Evolution of Strategic Alliances , 1998 .

[53]  John E. Freund,et al.  John E. Freund's Mathematical Statistics , 1998 .

[54]  Jeffrey H. Dyer.  EFFECTIVE INTERFIRM COLLABORATION : HOW FIRMS MINIMIZE TRANSACTION COSTS AND MAXIMIZE TRANSACTION VALUE r , 1998 .

[55]  Manoj K. Malhotra,et al.  Customer contact and the evaluation of service experiences: Propositions and implications for the design of services , 1998 .

[56]  H. Michael.  Strategic alliance formation , 1999 .

[57]  O. Williamson,et al.  STRATEGY RESEARCH: GOVERNANCE AND COMPETENCE PERSPECTIVES , 1999 .

[58]  Joseph P. Cannon,et al.  Buyer–Seller Relationships in Business Markets , 1999 .

[59]  J. Johanson,et al.  Creating value through mutual commitment to business network relationships , 1999 .

[60]  Jeffrey M. Wooldridge,et al.  Introductory Econometrics: A Modern Approach , 1999 .

[61]  Anandhi S. Bharadwaj,et al.  A Resource-Based Perspective on Information Technology Capability and Firm Performance: An Empirical Investigation , 2000, MIS Q..

[62]  Chu‐Hua Kuei,et al.  Designing and Managing the Supply Chain Concepts, Strategies, and Case Studies , 2000 .

[63]  E. Anderson,et al.  Strengthening the Satisfaction-Profit Chain , 2000 .

[64]  Luciana D'Adderio,et al.  Crafting the virtual prototype: how firms integrate knowledge and capabilities across organisational boundaries☆ , 2001 .

[65]  Rajiv Sabherwal,et al.  Alignment Between Business and IS Strategies: A Study of Prospectors, Analyzers, and Defenders , 2001, Inf. Syst. Res..

[66]  Michael J. Earl,et al.  Knowledge Management Strategies: Toward a Taxonomy , 2001, J. Manag. Inf. Syst..

[67]  Scott M Elliott.  Collaborative Advantage: Winning Through Extended Enterprise Supplier Networks: Jeffrey H. Dyer;Oxford University Press, 2000. 209 + xii pages $27.50 , 2001 .

[68]  Sandy D. Jap.  Perspectives on joint competitive advantages in buyer-supplier relationships , 2001 .

[69]  Akira Takeishi,et al.  Bridging inter‐ and intra‐firm boundaries: management of supplier involvement in automobile product development , 2001 .

[70]  Dean W. Ginther,et al.  An Exploratory Study of the Effects of Frequency and Duration of Messaging on Impression Development in Computer-Mediated Communication , 2002 .

[71]  M. Rapert,et al.  The strategic implementation process: evoking strategic consensus through communication , 2002 .

[72]  Jeffrey H. Dyer,et al.  Alliance capability, stock market response, and long‐term alliance success: the role of the alliance function , 2002 .

[73]  David Gefen,et al.  Implementation Team Responsiveness and User Evaluation of Customer Relationship Management: A Quasi-Experimental Design Study of Social Exchange Theory , 2002, J. Manag. Inf. Syst..

[74]  Kenneth L. Kraemer,et al.  e-Commerce Metrics for Net-Enhanced Organizations: Assessing the Value of e-Commerce to Firm Performance in the Manufacturing Sector , 2002, Inf. Syst. Res..

[75]  M. Primo,et al.  An exploratory study of the effects of supplier relationships on new product development outcomes , 2002 .

[76]  Yolande E. Chan.  Why Haven't We Mastered Alignment? The Importance of the Informal Organization Structure , 2002, MIS Q. Executive.

[77]  Rajiv Kohli,et al.  Performance Impacts of Information Technology: Is Actual Usage the Missing Link? , 2003, Manag. Sci..

[78]  Rajiv Sabherwal,et al.  Portfolios of Control in Outsourced Software Development Projects , 2003, Inf. Syst. Res..

[79]  Traci Carte,et al.  In Pursuit of Moderation: Nine Common Errors and Their Solutions , 2003, MIS Q..

[80]  Rajiv Kohli,et al.  Measuring Information Technology Payoff: A Meta - Analysis of Structural Variables in Firm - Level Empirical Research , 2003, Inf. Syst. Res..

[81]  A CarteTraci,et al.  In pursuit of moderation , 2003 .

[82]  Anne W. Mägi,et al.  Share of wallet in retailing: the effects of customer satisfaction, loyalty cards and shopper characteristics , 2003 .

[83]  M. Kotabe,et al.  Gaining from vertical partnerships : Knowledge transfer, relationship duration and supplier performance improvement in the U.S. and Japanese automotive industries , 2003 .

[84]  Timothy L. Keiningham,et al.  The Impact of Customer Satisfaction on Share-of-Wallet in a Business-to-Business Environment , 2003 .

[85]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[86]  Varun Grover,et al.  Shaping Agility through Digital Options: Reconceptualizing the Role of Information Technology in Contemporary Firms , 2003, MIS Q..

[87]  Das Narayandas,et al.  Linking Customer Management Effort to Customer Profitability in Business Markets , 2004 .

[88]  Rajkumar Venkatesan,et al.  A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy , 2004 .

[89]  M. Wade,et al.  Review: the resource-based view and information systems research: review, extension, and suggestions for future research , 2004 .

[90]  Aleda V. Roth,et al.  New measurement scales for evaluating perceptions of the technology‐mediated customer service experience , 2004 .

[91]  Mani Subramani,et al.  How Do Suppliers Benefit from Information Technology Use in Supply Chain Relationships? , 2004, MIS Q..

[92]  D. Wittink,et al.  Customer satisfaction and retail sales performance: an empirical investigation , 2004 .

[93]  Ron Garland.  Share of wallet's role in customer profitability , 2004 .

[94]  N. Venkatraman,et al.  Knowledge relatedness and the performance of multibusiness firms , 2005 .

[95]  T. Keiningham,et al.  Does customer satisfaction lead to profitability , 2005 .

[96]  Gautam Ray,et al.  Information Technology and the Performance of the Customer Service Process: A Resource-Based Analysis , 2005, MIS Q..

[97]  Blake Ives,et al.  Review: IT-Dependent Strategic Initiatives and Sustained Competitive Advantage: A Review and Synthesis of the Literature , 2005, MIS Q..

[98]  Hüseyin Tanriverdi,et al.  Information Technology Relatedness, Knowledge Management Capability, and Performance of Multibusiness Firms , 2005, MIS Q..

[99]  Timothy L. Keiningham,et al.  Actual Purchase as a Proxy for Share of Wallet , 2005 .

[100]  Suzan Burton,et al.  Determinants of customer loyalty and share of wallet in retail banking , 2005 .

[101]  W. Reinartz,et al.  Balancing Acquisition and Retention Resources to Maximize Customer Profitability , 2005 .

[102]  Arun Rai,et al.  Firm performance impacts of digitally enabled supply chain integration capabilities , 2006 .

[103]  Vallabh Sambamurthy,et al.  Editorial Notes - The Growth of Interest in Services Management: Opportunities for Information Systems Scholars , 2006, Inf. Syst. Res..

[104]  Paul A. Pavlou,et al.  From IT Leveraging Competence to Competitive Advantage in Turbulent Environments: The Case of New Product Development , 2006, Inf. Syst. Res..

[105]  Hüseyin Tanriverdi,et al.  Performance Effects of Information Technology Synergies in Multibusiness Firms , 2006, MIS Q..

[106]  Shu Lin,et al.  Plant Information Systems, Manufacturing Capabilities, and Plant Performance , 2006, MIS Q..

[107]  Elliot Bendoly,et al.  The Performance Effects of Complementarities Between Information Systems, Marketing, Manufacturing, and Supply Chain Processes , 2007, Inf. Syst. Res..

[108]  Viswanath Venkatesh,et al.  Assimilation of Interorganizational Business Process Standards , 2007, Inf. Syst. Res..

[109]  T. Keiningham,et al.  A Longitudinal Analysis of Customer Satisfaction and Share of Wallet: Investigating the Moderating Effect of Customer Characteristics , 2007 .

[110]  Xianggui Qu,et al.  Multivariate Data Analysis , 2007, Technometrics.

[111]  Christopher B. Bingham,et al.  What makes a process a capability? Heuristics, strategy, and effective capture of opportunities , 2007 .

[112]  Nilesh Saraf,et al.  IS Application Capabilities and Relational Value in Interfirm Partnerships , 2007, Inf. Syst. Res..

[113]  D. Simchi-Levi.  Designing And Managing The Supply Chain , 2007 .

[114]  Detmar W. Straub,et al.  Competitive and Cooperative Positioning in Supply Chain Logistics Relationships , 2007, Decis. Sci..

[115]  Prabhudev Konana,et al.  Antecedents and Consequences of Internet Use in Procurement: An Empirical Investigation of U.S. Manufacturing Firms , 2007, Inf. Syst. Res..

[116]  Augustine A. Lado,et al.  Inter‐organizational communication as a relational competency: Antecedents and performance outcomes in collaborative buyer–supplier relationships , 2008 .

[117]  Arun Rai,et al.  Knowledge Sharing Ambidexterity in Long-Term Interorganizational Relationships , 2008, Manag. Sci..

[118]  Matthias Holweg,et al.  Theoretical perspectives on the coordination of supply chains , 2008 .

[119]  Robert A. Novack,et al.  Supply Chain Management: A Logistics Perspective , 2008 .

[120]  Varun Grover,et al.  Business Value of IT: An Essay on Expanding Research Directions to Keep up with the Times , 2008, J. Assoc. Inf. Syst..

[121]  Todd J. Arnold,et al.  Achieving relationship marketing effectiveness in business-to-business exchanges , 2008 .

[122]  Arun Rai,et al.  How CIOs Can Align IT Capabilities for Supply Chain Relationships , 2009, MIS Q. Executive.

[123]  Arun Rai,et al.  Interfirm Strategic Information Flows in Logistics Supply Chain Relationships , 2009, MIS Q..

[124]  M. Zack.  Prospering in Dynamically-Competitive Environments: Organizational Capability as Knowledge Integration , 2009 .

[125]  Paul Brown,et al.  Organizational Assimilation of Electronic Procurement Innovations , 2009, J. Manag. Inf. Syst..

[126]  Qimei Chen,et al.  The Immediate Impact of New Product Introductions on Stock Price: The Role of Firm Resources and Size* , 2009 .

[127]  Javier Sánchez García,et al.  Customer Loyalty in Clusters: Perceived Value and Satisfaction as Antecedents , 2009 .

[128]  Christopher Paul.  Whither Strategic Communication?: A Survey of Current Proposals and Recommendations , 2009 .

[129]  A. Joshi,et al.  Continuous Supplier Performance Improvement: Effects of Collaborative Communication and Control , 2009 .

[130]  Alan Rockoff,et al.  On a Scale of 1-10 , 2012 .