Consequences of information technology usage on retailer-supplier relations

Executive summary 1. Retailers and suppliers increasingly tend to form long-term co-operative relationships. In the literature, the use of information technology is an enabling factor behind this trend. Nevertheless, our understanding of how information technology influences retailer-supplier relationships is still limited. The purpose of this paper therefore is to study the consequences of information technology usage on retailer supplier relationships, focusing on inter-organisational systems. 2. The paper begins by discussing the nature of retailer-supplier relations, noting that whereas these relationships have traditionally been adversarial, retailers and suppliers are beginning to realise that they can benefit from co-operating. Further, developmental processes in co-operative inter-organisational relations are discussed and the important role of social exchange in inter-organisational relationships is stressed. 3. Then the usage of information technology in retailer-supplier relationships is discussed. A typology of inter-organisational information sharing systems based on various types of interdependencies between retailers and suppliers is presented. It is argued that retailers and suppliers use a variety of inter-organisational systems depending on the level of co-operation and interdependence. 4. Based on the discussions of the nature of retailer-supplier relationships and the uses of information technology in these relationships, six propositions regarding the consequences of information technology usage on retailer-supplier relationships are developed. Specifically, propositions are developed regarding the choice of governance mechanism, the relationship development process and the exchange of information and joint value creation activities. 5. The paper concludes with a discussion of managerial implications and areas for future research. Based on the propositions developed in the paper, it is stressed that managers need to carefully consider the consequences that the use of inter-organisational systems may have on inter-organisational relationship. Further, managers need to realise that the use of inter-organisational systems is becoming a strategic necessity and is not in itself a source of sustainable competitive advantage. Finally, it is pointed out that the propositions developed in this paper have been developed based on previous empirical and theoretical papers and need to be empirically validated.