Understanding the role of electronic trading and inter‐organisational cooperation and coordination

Abstract

Purpose This paper aims to examine the relationship between cooperation and inter‐organisational coordination in the supply chain. There is much literature debate over the nature of electronic trading enabled cooperation and coordination in the supply chain. The paper examines the major concepts associated with inter‐organisational cooperation in social network literature such as collaboration and partnership and how this is affected by changing forms of coordination (market and hierarchy) governance. Design/methodology/approach Seminal literatures about how electronic market and hierarchy coordination mechanisms have changed over time are examined. While some evidence from interviewing companies is used in conjunction with literature to inform discuss the workings of a matrix framework, the discussion remains essentially conceptual. Findings A conceptual cooperation and coordination matrix outlines four quadrant forms of cooperation relative to evolving electronic markets and hierarchy coordination contexts, namely; “collaboration”, “partnership”, “dominance” and “autonomous”. The matrix depicts and describes subtle differences in these forms of cooperation. Collaboration involves a low degree of vertical integration and a high number of trading partners transacting on short‐term contracts. Partnering involves a higher degree of inter‐firm linkage with fewer stable partners on a medium to long‐term basis. Dominance is characterised as a traditional form of hierarchical inter‐firm linkage with a high degree of vertical integration. The autonomous organisation specialises in the production and delivery of major super brands which in the case of information based products can be sold directly to the customer. Originality/value The contribution is a discussion analysis and new matrix framework depicting forms of cooperation relative to market and hierarchy coordination contexts in the supply chain. This is useful for understanding theoretical interplay between different forms of inter‐firm cooperation and complex supply chain inter‐dependencies that utilise information technology.

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