Both academics and practitioners recognize the increasing importance of strategic alliances and partnerships in supply chains. Today, in order to emphasize core skills companies assume narrow and specialized roles within supply chains while they ally themselves with supply-chain partners, who have complementary skills, for mutual benefits. Collaborative supply-chain partnerships become the critical linking pins as higher degrees of specialization brings with it an increased

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Journal of Business & Industrial Marketing 20/4/5 (2005) 179-186

e Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620510603855]

need for integration across the overall supply chain. The idea is that when constellations of organizations in one supply chain deliberately collaborate, they can effectively outcompete other, less collaborative, supply chains.

We are witnessing that companies that previously confronted customers and suppliers regarding the allocation of costs and profits, now engage in collaborative supply-chain partnerships to maximize joint performance outcomes (Corbett et al., 1999). In fact, Chrysler's procurement organization, under the leadership of Tom Stallkamp coined the term "the extended enterprise" to capture the close ties the automaker had with its supply base. Interestingly, some of the gains afforded by these close ties have eroded since the merger with Daimler who has taken a more adversarial position with its US supply base.

A number of academic studies have identified trust as a key partnership characteristic which fosters collaborative behaviors (Morgan and Hunt, 1994; Wilson, 1995). For example, a buyer and a supplier who trust each other are more likely to openly share detailed cost breakdowns with each

This research was partially funded by grants from the Hans Werthen Foundation at the Royal Swedish Academy of Engineering Sciences (IVA).

Journal of Business & Industrial Marketing 20/4/5 (2005) 179-186

e Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620510603855]

Nik├Ćas Myhr and Robert E. Spekman

other (e.g. Ellram, 1996). Open access to such information enables partners to identify and manage inefficiencies and potential redundancies, whereby the total costs incurred in supply-chain relationships can be reduced.

Trust alone is not sufficient, however, for supply-chain relationships to achieve collaboration since mechanisms must also be in place so that information can be readily exchanged among the partners. One such mechanism is electronically mediated exchange and its role in fostering collaboration is of particular interest in today's increasingly digital economy.

First, many internet-based communication technologies represent relatively affordable solutions as compared to more traditional information systems for conducting electronically mediated exchange. Second, investments in internet-based communication technologies can more readily be deployed in other supply-chain relationships if current relationships would go sour. A case in point is the document transmission technology of electronic data interchange (EDI) which is undergoing a radical transformation whereby more affordable and flexible internet-based EDI solutions are now available (Mount, 2003). Consequently, companies today do not have to be as concerned about making the investments necessary to conduct electronically mediated exchange given that these investments are both lower than before and in many cases also reusable (cf. Stump and Sriram, 1997).

This is potentially good news for time-starved managers struggling to keep up with the management of more supply-chain relationships than they realistically can handle. Naturally, not all supply-chain relationships merit close collaborative efforts and therefore would not represent partnerships as such. However, as the performance and loyalty benefits of the relationship marketing and partnership approaches are becoming increasingly evident, managers are certainly striving to engage in more, not fewer, collaborative supply-chain partnerships. At the same time, they find it harder to spend the quality time needed to build a solid trust-based foundation on which future collaborative efforts can thrive if they have too many suppliers to deal with. Consider, for example, the effort required to spend some quality time with each and every one of General Electric's 45,000 suppliers (Mount, 2003). Even if GE concentrated on the top ten percent of its supply base, spending time with 4,500 suppliers is still a daunting task.

This paper suggests that both trust and electronically mediated exchange have the potential to enhance collaboration in supply-chain relationships. In our empirical study, we specifically test for the impact of trust and electronically mediated exchange on the degree of collaboration. This study also fills a gap in the literature as research is needed to examine how the nature of transactions in supply-chain relationships influences the relative value of electronically mediated exchange (Ryssel et al., 2004).

The context in which we investigate these issues is one of upstream supply-chain relationships of manufacturing business units of Nordic multinational corporations (MNCs). In the following section, we introduce our conceptual framework; discuss how it relates to the literature; and, offer our research hypotheses. Next, we present both the methodology used to test the conceptual framework and the findings. Finally, we discuss study limitations and the implications of this study for managers and researchers.

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