The role of information technology in supply‐chain relationships: does partner criticality matter?

Abstract

Purpose

There have been contradictory findings in the literature regarding the impact of information technology (IT) on firm productivity. While the debate known as the “IT paradox” still endures, there has been little empirical research to clarify why or when IT offers benefits to the owning firms. This study attempts to fill this gap in the literature by investigating when IT contributes to firm performance.

Design/methodology/approach

Using survey data, this study explores how IT adoption by a firm, in the context of supply chain communication systems, influences its market performance. Of special interest are improvements in both the firm's own and its partner's coordination activities. Criticality of a firm's channel partner is used as a moderating variable.

Findings

Results suggest that a firm's own coordination mediates the influence of IT adoption on market performance only when the partner being coordinated is critical to its success. If the partner is not critical to the success of the firm, the benefits of IT adoption can be materialized only through enhancements in the coordination activities of the partner.

Originality/value

The study results clarify why the assumed benefits of IT have been inconsistent in the context of supply chain relationships.

Citation

Kim, D., Tamer Cavusgil, S. and Calantone, R.J. (2005), "The role of information technology in supply‐chain relationships: does partner criticality matter?", Journal of Business & Industrial Marketing, Vol. 20 No. 4/5, pp. 169-178. https://doi.org/10.1108/08858620510603846