Supply Chain and Inter-Organizational Information Systems Role

Introduction

Throughout the last decade, there has been an exponential increase of professional and academic articles over the nature and importance of supply chain strategies. Therefore, literature represents multiple perspectives and approaches focusing on today's supply chain visions (Lambert & Cooper, 2000; Macpherson, 2001; Tan, 2001; Otto & Kotzab, 2003; Holweg et al.,2005; Ketchen & Hult, 2007).

Traditionally, supply chain management has been viewed as a process for transferring materials and goods. The focus on strategic supply chain management has changed the traditional supply chain vision. Early Marketing academics conceptualized key factors for why and how channels are created and structured by identifying who should be a member of the channel and describing the need for channel coordination and drawing actual marketing channel (Lambert & Cooper, 2000). However, they did not build the contributions of suppliers’ involvement and all processes of the whole supply chain. More recently, other academics (eg; La Forme et al., 2007; Angerhofer & Angelides, 2006) introduced the notion of collaborative supply chain in which collaboration is defined as a way by which all companies in a supply chain are actively working together towards common objectives, and is characterized by sharing information, knowledge, risks and profits. Based on the agency theory, a business relationship is composed of a principal and an agent engaged in a cooperative relationship. Even though that they have different goals and attitudes toward risk, their behavior is complimentary. In supply chains, this behavior warranties complete information symmetry between units. Under these conditions, the problems of opportunism and interest conflict are uncovered. A contract is considered as a mean of controlling the relationship, depending on the contract is a behavior-based or outcome-based. The foundation of the relation principal-agent is the compromise between the cost of measuring behavior and the cost of measuring outcomes and transferring risk to the agent (Eisenhardt, 1989).

Many forms of controlling are undertaking to align the interests of the agent in solidarity with those of the principal, such as piece rates, profit sharing, efficiency wages, performance measurement (including financial statements), the agent posting a bond, or fear of firing. With the emphasis on relational aspects, more behavioral mechanisms appeared. This idea is supported by the Social Exchange Theory focusing on the interactive relationships between partners and considers material as well as non-material exchanges. In addition, Social Network Analysis can be considered as a suitable method to explain the dynamics of the interactions between the actors in the supply chain. It joins the systems approach of supply chains. In the same vein, Ketchen and Hult (2007) discussed the concept of “best value supply chains” as an emergent vision of supply chain including the above confirmations. They specified it as chains that are most likely to prosper within today's competitive global landscape. Furthermore, they illustrated the difference between the two visions on the basis of several theoretical references (see Table 1).