The role of EDI in inter-organizational coordination in the European automotive industry

Abstract

Electronic data interchange (EDI) is an important prerequisite for inter-organizational coordination in the automotive industry. It not only affects the efficiency of coordination but also power-dependency and structural aspects of inter-organizational relationships. This study assesses the impact of EDI use on the trading relationships between car manufacturers and their suppliers based on a series of case studies in the German and UK automotive industries. The analysis is based on a multi-perspective research framework integrating three major approaches: transaction cost analysis, resource dependence theory and the network perspective. Findings suggest that EDI enables both parties to rationalise their operations. However, manufacturers still optimise their production at the expense of their suppliers. This may have a negative impact on cooperation with suppliers preventing long-term ‘true’ partnerships.