Enhancing supply chain outcomes through Information Technology and Trust

Challenged by competitive pressures, and enabled by information technologies (IT), organizations are forming strategic partnerships that share, collaborate, and make collective decisions across the supply chain (SC). To study this phenomenon, researchers have focused on one or some of these five salient factors: Information Technology Integration (IT), Inter-organizational Trust (TR), Relational Governance (RG), Transaction Cost (TC), and Supply Chain Performance (PE). In this study, we develop a research model that includes all these five factors by synthesizing and integrating theoretical perspectives: transaction cost economics, and relational governance. Our theoretical model clarifies the intricate relationships between the five factors by positioning two common resources for the supply chain: Inter-organizational Trust and IT, as the independent variables that influence outcome measures: performance, and reduction in transaction costs. Relational governance, which facilitates joint decision making, is theorized as playing a central role between the resources and the outcome measures. Data collected from 167 purchasing and supply chain managers provides strong support to our research model. Our findings should help researchers as well as practitioners to develop a more complete and transparent understanding of the relevant mechanisms with which the partnership resources, exert their beneficial effects on supply chain outcomes. Published by Elsevier Ltd.