Research Brief #20

Inter-organizational Information System Technology and Buyer-Seller Relationship Disruption
Louisiana Forest Products Development Center
Louisiana State University
Baton Rouge, LA

Research Objectives

1. Examine the impact on an ongoing relationship when a new inter-organizational system (IOS) technology is introduced by the buying firm who requires compliance by their seller.
2. Describe events and forces that impact the relationship when IOS is introduced.
3. Build a conceptual model that offers insights into managing IOS influenced changes to relationships including ways to minimize relationship damage.

Conclusions

Inter-organizational information systems (IOS) are a major way to improve inventory management and reduce costs. Retail buyers are pushing their key suppliers to install IOS systems. Unfortunately, in many cases the suppliers do not see the value, and hence do not seem to share their enthusiasm for IOS. The resulting struggle between them is an exercise in power which the supplier usually loses. Stable relationships are disrupted when buyers use their power to push sellers to adopt IOS.

Researchers

Richard P. Vlosky, Assistant Professor
Forest Products Marketing
Louisiana Forest Products Development Center
Louisiana State University Agricultural Center
Baton Rouge, Louisiana

David T. Wilson
Alvin H. Clemens Professor of Entrepreneurial Studies
The Smeal College of Business Administration
The Pennsylvania State University
University Park, Pennsylvania

Target Group

Companies that are considering implementing IOS technologies with suppliers or customers.

Methodology

Electronic data interchange (EDI), an IOS technology, was examined in the context of implementation strategies in the home center buyer-wood products supplier channel. Structured mail questionnaires were mailed to 52 wood product suppliers and 78 home center retailer buyers known to have, or believed to have, EDI partnerships with members on the other side of the dyad. The survey process resulted in a response rate for home centers of 51 percent or 39 surveys from an adjusted sample size of 76 firms and a response rate for wood products suppliers of 61 percent or 31 surveys from an adjusted sample size of 51 firms. However, of the total surveys returned, due to incomplete surveys or companies not doing EDI, there were 13 and 22 useable surveys from EDI capable buyers and suppliers, respectively.