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Power and Trust: Critical Factors in the Adoption and Use of Electronic Data Interchange

Author

Listed:
  • Paul Hart

    (Decision and Information Systems, College of Business, Florida Atlantic University, Boca Raton, Florida 33431-0991)

  • Carol Saunders

    (Department of Management, Southern Illinois University, Carbondale, Illinois 62901-4627)

Abstract

Computer networks are an increasingly important technology for improving the efficiency of information processing and providing shared access to information resources. Because computer networks are increasingly being used to support the flow of information between and within organizations, their use both influences and has consequences for interorganizational relationships. An important and widespread application of interorganizational computer networks is Electronic Data Interchange (EDI), which refers to the computer-based exchange of standardized business-related information between buyer and supplier firms. The following theoretical framework addresses the role that power and trust play in EDI adoption and use. Firms with greater power can influence their trading partners to adopt EDI. But power can be exercised in different ways. Because computer networks provide a way for certain information to be more accessible to outside parties, their use makes organizational boundaries more permeable. When firms use coercive power to force trading partners to adopt EDI, less powerful partners may be left more vulnerable. And, over time this perceived vulnerability becomes a constraint in interorganizational relationships that prevents improvements in coordination through expanded use of EDI. On the other hand, when the event of EDI adoption is viewed as an opportunity to build and reinforce trust between firms, the relationship is able to support organizational changes (e.g., restructuring operational processes or new modes of distribution) related to EDI use which contribute to improving interorganizational coordination. The role of power and trust in EDI adoption has important implications for interorganizational theory. Their role may be especially helpful in understanding how technology, and, in particular, electronic media support strategic alliances that firms create to advance mutual goals.

Suggested Citation

  • Paul Hart & Carol Saunders, 1997. "Power and Trust: Critical Factors in the Adoption and Use of Electronic Data Interchange," Organization Science, INFORMS, vol. 8(1), pages 23-42, February.
  • Handle: RePEc:inm:ororsc:v:8:y:1997:i:1:p:23-42
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    File URL: http://dx.doi.org/10.1287/orsc.8.1.23
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    Citations

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    Cited by:

    1. Thomas Froehlicher, 1998. "Les liens sociaux entre dirigeants et le déclenchement de la coopération interentreprises," Revue Finance Contrôle Stratégie, revues.org, vol. 1(1), pages 99-124, March.
    2. Jacques Crémer & Luis Garicano & Andrea Prat, 2007. "Language and the Theory of the Firm," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 373-407.
    3. Rui Guo & Lan Tao & Caroline Bingxin Li & Tao Wang, 2017. "A Path Analysis of Greenwashing in a Trust Crisis Among Chinese Energy Companies: The Role of Brand Legitimacy and Brand Loyalty," Journal of Business Ethics, Springer, vol. 140(3), pages 523-536, February.
    4. repec:spr:infosf:v:12:y:2010:i:3:d:10.1007_s10796-008-9138-8 is not listed on IDEAS
    5. repec:eee:proeco:v:191:y:2017:i:c:p:15-25 is not listed on IDEAS
    6. repec:spr:infosf:v:14:y:2012:i:2:d:10.1007_s10796-010-9253-1 is not listed on IDEAS
    7. repec:spr:grdene:v:18:y:2009:i:5:d:10.1007_s10726-008-9136-8 is not listed on IDEAS
    8. Stanislav Kreuzer, 2017. "Explaining organizational susceptibility to coercive pressure: results from a field experiment on e-invoicing IOIS adoption," Information Systems and e-Business Management, Springer, vol. 15(1), pages 159-195, February.
    9. Maher Agi & Eric Ballot, 2005. "EDI, a tool for organizational transformation: a case study in the automotive industry
      [L'EDI, instrument de transformation organisationnelle : Une étude de cas dans le secteur automobile]
      ," Post-Print hal-01422789, HAL.
    10. repec:eee:apmaco:v:292:y:2017:i:c:p:128-144 is not listed on IDEAS
    11. Crémer, Jacques & Garicano, Luis & Prat, Andrea, 2003. "Codes in Organizations," IDEI Working Papers 172, Institut d'Économie Industrielle (IDEI), Toulouse, revised Feb 2005.
    12. Rene M. Bakker, 2016. "Stepping in and stepping out: Strategic alliance partner reconfiguration and the unplanned termination of complex projects," Strategic Management Journal, Wiley Blackwell, vol. 37(9), pages 1919-1941, September.
    13. repec:spr:agrhuv:v:34:y:2017:i:3:d:10.1007_s10460-016-9738-8 is not listed on IDEAS
    14. Whan-Seon Kim, 2009. "Effects of a Trust Mechanism on Complex Adaptive Supply Networks: An Agent-Based Social Simulation Study," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 12(3), pages 1-4.
    15. Verhagen, T., 2008. "Investigating the impact of C2C electronic marketplace quality on trust," Serie Research Memoranda 0008, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

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