Reekers, Norbert

The Role of Electronic Data Interchange in Inter-organisational Coordination: European car manufacturers and their suppliers

(1995)

This research examines the ways new information and communication technology (ICT) affects inter-organisational coordination in the European automotive industry. The research problem is to determine how electronic data interchange (EDI), as a specific example of inter-organisational information systems, influences external organisational coordination and the structure of supply relationships between car manufacturers and their suppliers.

The basis of this research rests on three dominant theoretical perspectives typically applied separately: transaction cost analysis, resource dependence theory and the network approach. These complementary perspectives are integrated into a multi-dimensional research framework.

The research methodology selected is a multiple case analysis. Four car manufacturers and five suppliers based in the United Kingdom or Germany are selected for case studies. Adopting a bilateral research design, the implications of EDI use for the procurement of supplier parts and components are investigated from both sides of the organisational dyad.

The findings suggest that although efficiency gains were achieved by all organisations, car manufacturers currently seem to benefit most from EDI use. They clearly dominate the emerging hierarchical production networks and establish EDI-based coordination as part of their industry-wide rationalisation effort. EDI has become a necessary ingredient in the realisation of logistics-based manufacture. Yet suppliers, even if they benefit from increased outsourcing, are integrated into a tight information network managed and controlled by car manufacturers. This systemic impact of EDI reduced their planning autonomy and increased their informational dependence on car manufacturers.

The key contribution of this research is the development and application of a multi-dimensional research framework providing a more comprehensive understanding of the effects of EDI on the efficiency of transactions, the structure of supply relationships and the power-political behaviour of organisations.

Supervisor: Steve Smithson, PhD

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