Performance, interdependence and coordination in business‐to‐business electronic commerce and supply chain management

After discovering the inadequacy of traditional relationships across the value‐chain, many organizations today are establishing new forms of interorganizational systems with their suppliers and customers in an effort to improve total channel performance. Electronic commerce linkages are being created between independent organizations in multiple industries, including manufacturing, financial services, transportation, and retailing. Efforts to improve channel efficiency using business‐to‐business electronic commerce systems generally require increased interdependence and expanded coordination between independent firms to capture the potential benefits enabled by tighter interorganizational integration of operations. Participating firms can gain dramatic benefits from establishing electronic linkage only when the system is used to increase interdependence and to expand coordination between firms involved in the new interorganizational relationship. Drawing on theoretical and empirical research on electronic communications and inter‐firm designs, we develop and test a model for the relationship between performance, interdependence and coordination of firms involved in interorganizational relations within the US grocery channel. The research design includes qualitative case study analysis and quantitative survey data analysis to validate the key case study findings. Both qualitative and quantitative findings indicate that channel performance, interdependence, and coordination are closely related for firms in interorganizational relationships.