Leveraging Standard Electronic Business Interfaces to Enable Adaptive Supply Chain Partnerships

  • Authors:

  • Arvind Malhotra;Sanjay Gosain;Omar A. El Sawy

  • Affiliations:

  • Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27499;Capital Group Companies, Inc., 135 S. State College Boulevard, Brea, California 92821;Marshall School of Business, University of Southern California, Los Angeles, California 90089

  • Venue:
  • Information Systems Research
  • Year:
  • 2007

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Abstract

Adaptive supply chain partnerships are a key factor in driving the ability of extended enterprise partners to achieve long-term goals in an environment characterized by disruptive environmental shifts. Adaptive extended enterprise arrangements allow participating enterprises to leverage their combined assets for collective exploration and exploitation. In the context of extended enterprises, where significant investments have been directed toward instituting common interfaces, this study examines the question: How does the use of standard electronic business interfaces (SEBIs) enable supply chain partnerships to become more adaptive? This study conceptualizes the use of SEBIs as a boundary-spanning mechanism that helps overcome boundaries that impede knowledge transfer between enterprises in supply chains. SEBIs enables partners to gain insight into their broader environments, enriching each partner's perspective (enhanced bridging). SEBIs also help strengthen the cooperative ties between partners, motivating each partner to adapt for collective gain (enhanced bonding). Our research model is empirically tested using data collected from 41 demand-side supply chain partnerships (between original equipment manufacturers (OEMs), distributors, and retailers) in the information technology (IT) industry. The results show that collaborative information exchange (CIE) between supply chain partners mediates the relationship between use of SEBIs and mutual adaptation (MA) and adaptive knowledge creation between supply chain partners. Interestingly, the use of SEBIs is found to be directly associated with MA but only indirectly associated with adaptive knowledge creation. The study points out that the strategic impacts of SEBIs go well beyond the exchange of transaction information and process integration. It also shows that multilateral, quasi-open, and information exchange--and process linkage--oriented SEBIs can result in both bonding and bridging across supply chain partners without binding them inflexibly to specific partners. Based on the model and results, the study offers practical implications for how SEBIs should be developed, adopted, and used.