Shaping IT Standardization in the Automotive Industry - The Role of Power in Driving Portal Standardization

The advent of Internet technologies during the past decade has accelerated the diffusion of interorganizational networks and has intensified collaboration among organizations. Currently, most interorganization systems have moved to the public Internet network and rely on Internet and associated standards such as XML to codify and exchange data. Though often portrayed as a narrow technical matter, interorganizational systems standard setting is a complex social process, shaped by the power relations among the potential participants. This paper discusses the role that the power relations among the automotive industry actors played during the early development stages of Covisint – an interorganizational system aiming to set up a de-facto platform for e-commerce in the automotive industry. Whereas current empirical studies on standardization focus on the success of coalitions of large users to establish de facto standards, our study explores the failure of such an initiative. The study finds that changes in the balance of power among car manufacturers and suppliers and the inability of car manufactures to relinquish control over standard development to suppliers can explain why coalitions can fail to set up and adopt industry wide e-commerce platform