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...conceptualized as a collection of principles that reflect the values of TQM (Dean and Bowen 1994; Sitkin, Sutcliffe and Schroeder 1994; Hackman and Wageman 1995). Among them is the principle that guides supplier management: "co-makership" (Bessant 1990), which emphasizes the importance of developing close relationships with suppliers. This principle leads to numerous supply management practices and tools, such as supply base reduction and collaboration.
The supply management landscape has recently been influenced by the emergence of Internet-enabled e-commerce, which has made available a number of new tools and practices for selecting and managing suppliers. Such new technologies may alter organizations' realized strategies (Mintzberg 1978, Boyer 1998), including supply management strategy. Thus, when significant new technologies arise, the research community must investigate how they affect strategy (Snow and Hambrick 1980). Although TQM has been widely studied, most studies occurred before the widespread development of electronic commerce. Hence, the research community lacks an understanding of how the Internet has affected this particular element of the realized strategies of manufacturers who have embraced TQM. In particular, whether or not various e-commerce applications have become a part of TQM organizations' supplier management tool kit is an unanswered question. The importance of e-commerce adoption should not be taken too lightly: After all some Internet applications have been hailed as a means to forge closer ties between buyers and sellers, allowing them to act as a so-called virtual enterprise (e.g., Kim 2006). However, other applications have been criticized for putting buyers and sellers in adversarial positions (e.g., Beall, Carter, Carter, Germer, Hendrick, Jap, Kaufmann, Maciejewski, Monczka and Petersen 2003). This suggests that e-commerce adoption decisions have the potential to strengthen or to undermine the TQM-based supplier management principle. Our study is a first step toward understanding the adoption of supplier-facing Internet applications by organizations that have embraced TQM. (We define supplier-facing Internet applications as technologies that use the Internet to select and manage suppliers.) Specifically, our research question is which (if any) supplier-facing e-commerce applications are (and are not) associated with the practice of TQM? Put differently, does the degree to which an organization practices TQM affect the likelihood of its adopting particular e-commerce applications?
To answer these research questions, we develop hypotheses drawing upon strategic contingency theory, which stresses the importance of consistency between structural (i.e., technology adoption) and infrastructural (i.e., TQM practices) decisions. We investigate the relationships between TQM orientation and eight different e-commerce applications using data collected from 189 plants representing three industries and six countries. In the next section, we review the relevant literature on TQM and on e-commerce, and we propose our hypotheses. We then present our empirical analysis followed by discussion, contributions, limitations and conclusion.
LITERATURE REVIEW AND HYPOTHESES
Strategic contingency theory has been used widely to predict the adoption of technological innovations. A central idea underlying this theory is the concept of consistency, which researchers have argued should be the major determinant of adoption decisions. This consistency argument has its early roots in the general strategy literature (Skinner 1969). Mintzberg (1978, p. 945) argues that an organization's strategy can be best analyzed as a "pattern in a stream of important decisions," especially when emergent opportunities occur. Later theorists elaborate upon Mintzberg's idea and further state that a sound manufacturing strategy consists of a consistent pattern of decisions in both structural and infrastructural areas (Hayes and Wheelwright 1984). In this study, we apply this theoretical perspective to investigate the relationships between TQM (decisions in an infrastructural area) and the adoption or nonadoption of a variety of Internet applications (decisions in a structural area). Our fundamental argument, based on the notion of strategic consistency, is that the adoption of Internet applications that are consistent with the TQM principles will be positively associated with TQM, whereas the adoption of applications that are inconsistent with the TQM principles will be negatively associated with TQM.
The Internet provides many types of e-commerce applications which enable companies to interface with their suppliers (Lee and Whang 2001). This study focuses on eight supplier-facing Internet applications covering a wide range of purchasing and supply activities. We propose that a useful distinction among these tools is the observation that some are competition enhancing while others are relationship enhancing. Competition-enhancing tools decrease the cost of doing business with a large number of suppliers and/or increase competition among a group of suppliers. By contrast, relationship-enhancing tools require transaction-specific investment (Williamson 1985) and/or promote buyer-supplier collaboration. Below we discuss eight Internet tools, three of which we consider to be competition enhancing and five relationship enhancing. We argue that competition-enhancing tools are consistent with the TQM philosophy whereas the relationship-enhancing tools are inconsistent.
TQM and the Adoption of Competition-Enhancing Applications
Competition-enhancing e-commerce applications are an investment in locating more suppliers and/or enhancing competition within the existing set of suppliers. Three such applications investigated in this study are: marketplace scanning using the Internet, electronically receiving and comparing offers and Internet reverse auctions. The remainder of this section discusses each of these in turn.
The Internet may enable a buyer organization to more efficiently scan the marketplace to identify a large pool of potential suppliers. For example, a buyer looking to identify new sources of supply may use on-line services such as Manta (www. Manta.com), which provide lists of potential suppliers based on parameters that the buyer enters. Compared with research methods used before the Internet (e.g., attending trade shows, using paper registries), these services dramatically decrease the cost and increase the efficiency of identifying new suppliers. A second type of Internet application improves the efficiency of exchanging and processing information with these potential suppliers--also reducing the cost of engaging in a supplier search. For example, electronic request for information tools facilitate the screening and prequalification of potential suppliers by automating the collection and analysis of information that suppliers provide. Electronic request for quotation applications automate the receipt and comparison of suppliers' quotes and proposals. By reducing the cost of identifying and dealing with suppliers, all of these applications reduce the marginal cost of having additional suppliers compete for the buyer's business or of putting existing contracts out for bid more frequently. Past research indicates that this may reduce a supplier's confidence in the buyer's commitment (Bakos and Brynjolfsson 1993). Agency theory suggests that suppliers who do not believe they will conduct business with the buyer for an extended period will have fewer incentives to act in the best interests of both parties (Swink and Zsidisin 2006).
By contrast, TQM's supplier management principle--"co-makership"--recommends maintaining a small number of suppliers and establishing a long-term relationship with them in order to maximize the supplier's contribution to quality performance (Flynn, Schroeder and Sakakibara 1994; Trent and Monczka 1999; Kaynak 2003). Using sole or a small number of suppliers over the long haul contributes to commitment and mutual understanding. Internet applications that decrease the marginal costs of engaging a greater number of potential suppliers are inconsistent with this principle. Therefore, we propose:
H1: Buyer TQM orientation is negatively associated with buyer adoption of the Internet for scanning the marketplace for identification of potential sources of supply.
H2: Buyer TQM orientation is negatively associated with buyer adoption of the Internet for receiving and...
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