Inter-Firm it Capability Profiles and Communications for Co-Creating Relational Value: Evidence from the Logistics Industry

MIS Quarterly, 2011

Posted: 25 Feb 2012

See all articles by Arun Rai

Arun Rai

affiliation not provided to SSRN

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Ghiyoung Im

Clark Atlanta University

Steve Du

Georgia State University - J. Mack Robinson College of Business

Date Written: February 24, 2012

Abstract

This study seeks to identify the means by which information technology helps co-create relational value in the context of inter-firm relationships in the logistics industry — a large and information-intensive industry. We identify a set of IT functionalities — single-location shipping, multi-location shipping, supply chain visibility, and financial settlement — that can be used to manage the flows of physical goods, information, and finances across locations in inter-firm logistics processes. Progressively more advanced sets of IT functionalities, when implemented and used in the inter-firm relationship to execute logistics processes, are proposed to form four distinct IT capability profiles of increased sophistication. Inter-firm IT capability profiles of higher sophistication are proposed to help co-create greater relational value by facilitating the flows of physical goods, information, and finances across locations in the inter-firm logistics process. Besides their direct role in helping co-create relational value, these inter-firm IT capability profiles are proposed to further enhance relational value co-creation when complemented by inter-firm communications for business development and IT development. Our empirical study was situated in one of the world’s largest logistics suppliers and over 2,000 of its inter-firm relationships with buyers across industries. Integrated data from four archival sources on the IT functionalities implemented and used in inter-firm logistics relationships, inter-firm communications, relational value (share of wallet and loyalty), and multiple control variables were collected. The results show that the proposed inter-firm IT capability profiles and inter-firm communications have both a direct and an interaction effect on relational value. Implications for co-creating relational value in inter-firm relationships with the aid of IT are discussed.

Suggested Citation

Rai, Arun and Pavlou, Paul A. and Im, Ghiyoung and Du, Steve, Inter-Firm it Capability Profiles and Communications for Co-Creating Relational Value: Evidence from the Logistics Industry (February 24, 2012). MIS Quarterly, 2011. Available at SSRN: https://ssrn.com/abstract=2010588

Arun Rai

affiliation not provided to SSRN ( email )

Paul A. Pavlou (Contact Author)

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

Ghiyoung Im

Clark Atlanta University ( email )

223 James P. Brawley
Atlanta, GA 30314
United States

Steve Du

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States

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