EDI and Interorganizational Coordination in the European Automotive Industry

In the automotive industry, some of the most complex partnerships between car manufacturers and suppliers can be observed. Electronic data interchange (EDI) can provide an integrated information infrastructure that contributes to the formation of collaborative interorganizational arrangements. Adopting a multiple case research methodology, this research explores the influences of EDI on the cooperative strategies of organizations and the structure of interorganizational relationships in the European automotive sector. A multidimensional research framework based on transaction cost analysis, resource-dependence theroy and the network apporach has been developed to analyse the complex effects of EDI use on efficiency, socio-political and structural aspects of interorganizational relationships. The findings suggest that the emerging hierarchical production networks are clearly dominated by manufacturers who currently seem to benefit most from EDI use. Although efficiency gains were achieved, suppliers become increasingly dependent on manufacturers, except for ‘preferred’ suppliers who can create dependencies to a certain extent. To achieve mutual benefits and ‘true’ partnerships, the management of reciprocal interdependencies as well as the permeability of organizational boundaries seem to be crucial for future strategies.