Inter-firm IT governance in power-imbalanced buyer-supplier dyads: exploring how it works and why it lasts
Using a multiple case study design, we investigate the issue of inter-firm IT governance and its impact on information sharing in buyer-supplier dyadic relationships. We interviewed 38 managers of operations, purchasing, and IT in five dyadic relationships, and identified and examined one type of inter-firm IT governance: unilateral IT governance. In this type of IT governance, one party of the dyad dominates the relationship and the decision rights regarding inter-firm IT systems and data sharing. We find that unilateral inter-firm IT governance develops under contract-based and relationship-supplemented inter-firm governance arrangements in which significant power imbalance exists. However, contrary to the prediction of resource dependence theory, power-imbalanced governance can survive and thrive over a long period of time. We find that the inter-firm relational norms and trust that develop between these dyads constrain opportunistic and myopic behaviors in both parties, thus sustaining the seemingly unstable unilateral inter-firm IT governance. We also find that the operational necessity of the buyers and the IT capability of the suppliers are two primary factors that constrain inter-firm information sharing in these dyads. On the basis of these findings, we propose a process model for understanding and managing this type of inter-firm IT governance.
inter-firm it governance it governance inter-firm governance power imbalance resource dependence inter-firm relationship