Interfirm IT Capability Profiles and Communications for Cocreating Relational Value: Evidence from the Logistics Industry

MIS Quarterly Vol. 36 No. 1 pp. 1-30, March 2012

30 Pages Posted: 20 Dec 2013

See all articles by Arun Rai

Arun Rai

Georgia State University - J. Mack Robinson College of Business

Paul A. Pavlou

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

Ghiyoung Im

University of Louisville - College of Business and Public Administration

Steve Du

Georgia State University - J. Mack Robinson College of Business

Date Written: 2012

Abstract

This study seeks to identify the means by which information technology helps cocreate relational value in the context of interfirm relationships in the logistics industry — a large and information-intensive industry. We identify a set of IT functionalities — single-location shipping, multilocation shipping, supply chain visibility, and financial settlement — that can be used to manage the flows of physical goods, information, and finances across locations in interfirm logistics processes. Progressively more advanced sets of IT functionalities, when implemented and used in the interfirm relationship to execute logistics processes, are proposed to form four distinct IT capability profiles of increased sophistication. Interfirm IT capability profiles of higher sophistication are proposed to help cocreate greater relational value by facilitating the flows of physical goods, information, and finances across locations in the interfirm logistics process. Besides their direct role in helping cocreate relational value, these interfirm IT capability profiles are proposed to further enhance relational value cocreation when complemented by interfirm 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 interfirm relationships with buyers across industries. Integrated data from four archival sources on the IT functionalities implemented and used in interfirm logistics relationships, interfirm communications, relational value (share of wallet and loyalty), and multiple control variables were collected. The results show that the proposed interfirm IT capability profiles and interfirm communications have both a direct and an interaction effect on relational value. Implications for cocreating relational value in interfirm relationships with the aid of IT are discussed.

Keywords: Relational value, relational view, share of wallet, interfirm relationships, IT capability profiles, IT functionalities, contact streams, interfirm communications, complementaries, logistics

Suggested Citation

Rai, Arun and Pavlou, Paul A. and Im, Ghiyoung and Du, Steve, Interfirm IT Capability Profiles and Communications for Cocreating Relational Value: Evidence from the Logistics Industry (2012). MIS Quarterly Vol. 36 No. 1 pp. 1-30, March 2012. Available at SSRN: https://ssrn.com/abstract=2369384

Arun Rai

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

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

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

University of Louisville - College of Business and Public Administration ( email )

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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