The effect of the role of information on the
links between trust, control and cooperation
Master thesis, Msc Business administration: Organization Management & Control Rijksuniversiteit Groningen, Faculty of economics and business
23 June, 2014 Anja Loijens Studentnumber: s1985582 Castor 99 8531 NA Lemmer Email: a.g.loijens@student.rug.nl
Supervisor: Abdul Rehman Abbasi Abstract:
Collaborative enterprise has emerged as an important business trend, but they still have a high failure rate. Failures mostly have been attributed to a lack of trust. Besides this, information systems are the primary means of information sharing in collaboration and are often the primary means of the success of collaboration. As the links between trust, control en cooperation have been invested thoroughly, the effect of the role of information is not. This research investigates the effect of the role of information on the links between trust, control and cooperation. 82 companies from the industrial/technological sector in the Netherlands participated. The main findings are that no significant effect is found of information on the different relationships between trust, control and cooperation. Information systems are mostly used as a control mechanism rather than support mechanisms.
Key words: Control, cooperation, information systems, trust
1. Introduction
Due to increasing globalization, competition between organizations has increased over the past years. To deal with this increased competition and to remain profitable, organizations collaborate more and more (Barney 1991; Grant & Baden-Fuller, 1995). Also Coletti et al. (2005) has stated that collaborative enterprises have emerged as an important business trend over the past years. Despite of the growth of collaborative enterprises, there is a failure rate between fifty and sixty percent (Hughes & Weiss, 2007). This means that many collaborative enterprises are not successful or helpful to deal with increased competition (Barney, 1991). Because this failure rate is really high, it is important to investigate what makes a collaboration successful. There has been a lot of research done on the factors that influences inter-organizational collaborations, including trust (Colleti et al, 2005; Zaheer et al, 1998), control (Dekker, 2004) and information (Nicolaou et al, 2011; Tomkins, 2001). As Chaturvedi & Gaur (2009) states (p174): ‘There are many factors contributing to the high level of failure of strategic alliances. Even though the selection of a partner firm is done after an elaborate examination of the future partner, firms fail to recognise the motives of the partners, which finally can affect the success or failure of the alliance’. Failures mostly have been attributed to a lack of trust, which is an important informal control among exchange partners (Nicolauo et al, 2011). Control is mostly seen as a mechanism to monitor the different forms of risk, which arises when dealing with collaboration (Coletti et al, 2005; Das & Teng, 1998). It is viewed as the process of regulation and monitoring of collaboration for the achievement of its goals (Das & Teng, 2001). Furthermore, information systems are often the primary means of information sharing in collaboration. They are critical to the success of collaborations (Nicolauo et al, 2011). Because trust, control and information have a prominent role in the success or failure of any collaboration, it is important to have knowledge about these concepts and their effects (Zaheer et al, 1998).
conditions that favour trust and directly build trust. In addition to this, Colleti et al (2005) state that the effect of control on cooperation is reinforced by the trust that it engenders. The study from Colleti et al. (2005) differs from the others, because they have taken cooperation into account, which is seen as an important factor in the trust-control relationship. Cooperation arises from the economic incentives derived from control systems and is seen as a determining factor for success in inter-organizational relationships (Pearce, 2001). Colleti et al (2005) found that control induces cooperation, which, in turn positively affects trust.
Another important concept in this area is the role of information. Besides the level of trust, information is needed for successful collaborative future (Tomkins, 2001). Collaborative computer-based information systems have become a major trend in today’s business environment. The trend has accelerated with the emergence of the Internet and the wide scale adoption of e-business (Grossman, 2004). As the links between trust, control and cooperation are investigated thoroughly, the effect of the role of information on this links is not (Coletti et al, 2005). Because of the major trend and therefore the great importance of information systems, the aim of this research will be to provide more insight into the role of information in strengthening the links between trust, control and cooperation. Examining what the role of information is between those concepts is important for the cost-benefit trade-offs of investments in information systems (Nicolauo et al, 2011).
While the links between trust, control and cooperation have been invested thoroughly, more research is needed to investigate the effect of the role of information on these links. Previous research is unclear about the effect of ISI on the links between control
and trust. Das and Teng (1998), Tenbrunsel and Messick (1999) and Malhotra and Murnighan (2002) found in their studies that formal control can have unintended negative effect on trust. On the other hand, using ISI for control purposes can increase alliance partner trust (Velez et al. 2008). This research will extend the work of Colleti et al. (2005) by the inclusion of interorganizational information systems (ISI) and the empirical testing of the conceptual model (figure 1).
As Colleti et al. (2005) have found in their study, there is a positive link between control and trust. A necessary condition for this link is the mediating role of cooperation in between. Because of the lack of research on the influence of the critical success factor ISI on the links between control, cooperation and trust, and the contradicting findings of previous research on ISI, the research question of this study becomes: ‘What is the effect of the role of information on the links between control, trust and cooperation?’ Because the relationship between control, trust and cooperation exists of three separate relationships, the effect of the role of information systems on the three relations needs to be investigated separately. Therefore, three sub questions are formed:
‘What is the effect of the role of information on the link between control and cooperation?’; ‘What is the effect of the role of information on the link between cooperation and trust?’; ‘What is the effect of the role of information on the link between control and trust?’
Besides this, the relationships between trust, control and cooperation will be tested, to make sure the model derived from Colleti et al. (2005) is also applicable in this setting.
The remainder of the paper is structured as following: First, a literature review (2) is done on the different concepts ending with the corresponding hypotheses. In the following sector, the methodology (3) is explained, followed by the results (4) of the analysis. Finally the results are discussed (5) and limitations and suggestions for further research (6) are given.
2. Literature review
This section examines the literature relating to trust, control, cooperation and interorganizational information systems. Those terms can be interpreted in many ways, thus an elaboration on the definitions is necessary. After the elaboration of definitions, the constructs and their relationships are explained, followed by the corresponding hypotheses.
Cooperation
opportunistic behaviour (Pearce, 2001). There are a lot of cooperative strategies, which can be used to gain competitive advantage. In this article the focus will lay on collaborations because they are the primary form of cooperative strategies (Masrurul, 2013). According to Colleti et al. (2005), collaboration can be defined as: ‘two (or more) parties involved in some type of joint production, such that each party’s individual output cannot be directly observed’. This definition applies generally to many different types of collaborations. According to the resource based view, collaboration can be seen as a mean to gain a durable competitive advantage, which will be hard to imitate (Barney, 1991). Arm’s-length market relationships will be excluded, because they rely on nonspecific asset investments and there is minimal information exchange. Under these conditions it is easy for firms to switch trading partners and thus not relevant (Dyer & Singh, 1998).
vulnerable to relational risk (Das & Teng, 1999), this factor is taken into account to explain the relation between control and cooperative behaviour.
Control
Control is generally viewed as the process of regulation and monitoring collaboration for the achievement of its goals (Das & Teng, 2001). It can also be defined as the various policies and procedures that firms use to mitigate different types of risk (Colleti et al, 2005). In case of collaboration, the purpose of control is to ensure that the partner does not behave opportunistically (Das & Teng, 1998). In strategic alliances, control is seen as essential. In alliances, different types of control can be used. According to Das & Teng (2001) control can be achieved through governance structures, contractual specifications, managerial arrangements and other, more informal, mechanisms. Because of the use of different types of control within collaborations, and the use of different forms of control to mitigate different types of risk, all forms of control are discussed.
Trust
Different forms of trust are distinguished; competence trust and intentional trust (Nooteboom et al, 1997). According to Nooteboom et al. (1997), competence trust (also called capability trust) is the trust that one has in the abilities and competence of the other party. Intentional trust (also called goodwill trust) is the trust in the intentions of the other party. It is the expectation that another will perform in the interest of the relationship and will not behave opportunistically (Dekker, 2004). There two forms of trust are distinguished, because they concern the major uncertainties that need to be managed in a collaborative enterprise (David & Filip, 2007).
Trust can be defined in different ways. It can be defined as the perceived likelihood that another person will cooperate, absent any economic incentives to do so (Colleti et al, 2005). Trust is also the willingness to accept vulnerability and the belief that the alliance partner has the ability and the intention to perform (Vosselman & Meer-Kooistra, 2008; Velez et al, 2009; Nikolaou, 2011). In this article a combination is made between the definitions. Trust is defined as: “The perceived likelihood that the alliance partner will cooperate and has the ability and intention to perform, even in the absence of economic incentives to do so”. This definition entails all the aspects that are import in collaboration and encompasses both competence and intentional trust.
Interorganizational information systems (ISI)
Because of the declining costs of capturing and using information, ISI are becoming a major trend in today’s business environment (Johnston & Vitale, 1988). Also with the wide scale adoption of the e-business, ISI become more important. Another main issue is the heavily competitive environment, where organizations have to collaborate with each other to gain a competitive advantage. As Nicolaou et al. (2011) have stated, ISI are often the primary means of information sharing in collaboration and are often the primary means of success. In general, ISI are used to improve relationships among organizations and to create extra value (Johnston & Vitale, 1988).
organizational boundaries possible and it enables the sharing of operational, tactical and strategic information between partners (Johnston & Vitale, 1988). Most interorganizational information systems are focused on the transition from inter-firm competition to cooperation. Organizations move towards more collaborative economic relationships, where ISI play an enabling role in making this transition feasible (Kumar & Van Dissel, 1996). The difference between ISI and an internal information system is that ISI allow information to be send across organizational boundaries (Johnston & Vitale, 1988).
Control, trust and cooperation
As mentioned before, the relationship between control, trust and coordination has been investigated thoroughly. Das and Teng (1998) found that control mechanisms have some direct impact on the trust level and that the trust level plays a moderating role between control mechanisms and control level. They have found that control and trust are two concepts with a supplementary character. Velez et al. (2008) found that even when trust is well established, control systems enable conditions that favour trust and directly build trust. Colleti et al (2005) has made an addition to this, by stating that the effect of control on cooperation is reinforced by the trust that it engenders. A lot of prior studies (Malhorta & Murnighan, 2002; Jarvenpaa et al, 1998; McAllister, 1995) on the relationship between control and trust claim that control reduces trust, but they have not taken into account the role of collaborative cooperation. Because cooperation arises from the economic incentives derived from control systems and is seen as a determining factor for success in inter-organizational relationships (Pearce, 2001), the study of Colleti et al (2005) will be used to explain the relationship between trust, control and cooperation,
ISI, control and cooperation
Within a control system, the focus is on a logical and rational evaluation of the costs and benefits of cooperation (Colleti et al, 2005). Tenbrunsel and Messick (1999) claim that a weak control system has a negative effect on cooperation. Therefore, a strong control system increases cooperation. When collaborators observe this increased cooperation, they will cooperate themselves (Coletti et al, 2005). This phenomenon is called control-induced cooperation. As Nicolauo et al. (2011) has stated, ISI as a control mechanism is used for verifying and evaluating the actions of the partner and as the basis for incentives to alliance partners to achieve desirable or predetermined outcomes. After actions have been taken, ISI is used for monitoring performance and gathering information (Baiman and Demski, 1980). Especially control systems aimed at reducing relation risk promote greater cooperation (Colleti et al, 2005). An essential concept in achieving project objectives for relational agreements is communication. Reliable and efficient communication between alliance partners is a critical factor influencing the success of the relation between partners (Doloi, 2009).
As stated above, ISI provide the basis for efficient communication and for verifying and evaluating the actions of the partner. According to Colleti et al. (2005), the possibility to observe the actions and behaviour of the partner is very important for cooperation. The presence and use of ISI makes it possible to observe and assess the behaviour and action of the partner and therefore enhances cooperation. This leads to the expectation that ISI will have a positive effect on the link between control and cooperation.
H1: ISI has a positive moderation effect on the link between control and cooperation
ISI, cooperation and trust
with some kind of uncertainty. To reduce this uncertainty and thus enhance trust, information is needed (Tomkins, 2001). Trust derives from learned experiences and this learning process depends upon information (McKnight et al. 1998). Wang & Wei (2007) argue that ISI can help alliance partners to decrease information asymmetry and increase monitoring capabilities and thereby mitigate opportunism. It also increases the visibility of partner performance (Chi et al, 2007). On the other hand, Grossman (2004) has found that ISI decreases alliance partner trust. A limitation of this study that is has not taken into account cooperation. When this is taken into account, a decrease in alliance partner trust through the use of ISI seems unlikely. Coletti et al. (2005) has stated that in the case of collaboration, visibility of cooperation is important to gain trust in the alliance partner. As Das & Teng (1999) explained, relational risk is unique to strategic alliances. This is the probability that collaboration objectives will not be achieved because of a lack of cooperation. Through the use of ISI, there is an increase in the visibility of cooperation. ISI can help partners to monitor capabilities, verify and evaluating the actions of the partner (Nicolauo, 2011). Also because ISI will lead to visibility of the cooperation, trust will enhance (Coletti et al, 2005). This leads to the expectation that ISI will have a positive effect on the link between cooperation and trust.
H2: ISI has a positive moderation effect on the link between cooperation and trust
ISI, control and trust
for the observed behaviour in others? Through the use of ISI, people can make observations and assess the behaviour of others. Also, ISI makes it possible to implement behavioural and output control, which in turn will lead to higher levels of trust.
Because ISI are the basis for information exchange between alliance partners, and therefore make formal and informal control possible and visible, it is expected that ISI have a positive effect on the link between control and trust. The mediating role of cooperation as a necessary condition and is important to acknowledge in this setting (Coletti et al. 2005).
H3: ISI has a positive moderation effect on the link between control and trust
Number of business partners and length of the collaboration
Tomkins (2001) suggest that coordination and information sharing will increase with relationship maturity. Repeated interactions facilitate learning and weaken the need for formal control systems, enhance cooperation and trust. The length of the collaboration thus can influence the relationship between ISI, control, cooperation and trust.
Kusari et al. (2013) stated that trust evolves over time. In the different stages of the business relationship, trust can increase/decrease through past experience with the partner. If there are multiple business partners during collaboration, you have to rebuild trust. For this reason, the number of business partners can have an influence on the relationships between ISI, trust, control and cooperation.
Conceptual framework
Figure 2: Conceptual framework (partly derived from Colleti et al, 2005)
3. Methodology
The hypotheses are examined using a survey. The method section describes why surveys are used, along with the advantages of both mail and email surveys. First, the data sample will be described, followed by the instruments that are used and finally a description of the analysis that have been executed is given.
The method used (theory testing) is partly based on the empirical cycle (Blumberg, Cooper and Schindler, 2011: de Groot 1969; Saunders, Lewis and Thornhill, 2007). It follows the deduction, testing and evaluation steps of this cycle. Because collaborative enterprises have emerged as an important business trend, but still have a high failure rate (Coletti et al, 2005), the research question is based on a business phenomenon faced by many companies. This phenomenon has not been fully addressed by the academic literature. There are much related and elaborated literature streams about this topic, but the evidence for the effect of information on the links between trust, control and cooperation is inconclusive. Therefore theory testing is used to close this gap in the literature and create evidence for these explanations. Hypotheses are formed based on literature streams involved and additional literature. (Aken, Berends & Van der Bij, 2012)
Data collection
very low. An overview of relevant characteristics of the organizations that have responded is given in table 1. Every student has approached approximately 320 organizations, which leads to the combined database of 1617 responses. Reminders were send by each student to their own part of the database. The aim of making a combined database is gaining as many responses as possible. Because of the low response rate, there is still a low number of respondents. The low number of respondents is taken into account in the data analyses and the discussion section, because more respondents would have provided more reliable results. The main reasons for the low response rate are the length of the survey and company policies. The research is conducted in the industrial/technological industry in the Netherlands. Members of the Dutch FME association have been approached, because this organization provides an overview of the most important companies working in the industrial/technological sector in the Netherlands. The companies are dealing with metal, plastics, electronics and electro technics and are working in the production, trade, industrial maintenance and industrial automation sector. The industrial/technological sector is chosen because there is a growth in strategic alliances in this sector. Technology has become so complex that individual companies cannot handle it. Even small firms in this sector have been engaged in collaboration (Bougrain & Haudeville, 2002). The companies are evenly spread throughout the Netherlands. The companies have received a hardcopy of the survey and an online reminder (twice). Surveys executed by post have the advantage of no interviewer bias and low administration costs. Disadvantages of this method are low survey return rates and no control over the survey situation. As surveys executed by post take a lot of time for the researcher as well for the respondent, there has been chosen to send the reminder by e-mail. In this way costs are minimalized and the respondent is given the opportunity to respond in a way he/she prefers. Web-based surveys provide a mechanism for collecting data more quickly, which should lead to cost savings and an increased response rate. (Grant, Teller & Teller, 2005)
The survey instrument instructed respondents to focus on an existing or past collaboration when filling in the survey. Specific instructions were as follows:
The questions will evaluate the amount of trust, control and cooperation within this collaboration. Also the use of your organizations IT system that provide information useful for the management and control of the collaboration will be evaluated.
To ensure consistency among respondents about the definition of collaboration, this definition is given in the survey. Because of the anonymous nature of the survey, it is not clear whether or not respondents have filled in the survey more than once for different collaborations.
Table 1. Relevant characteristics respondents
Length of the collaboration Number of business partners Number of employees Years active in industrial/technological sector
Mean 13 years 33 840 44 years
Minimum 1 year 1 1 2 years
Maximum 77 years 2000 40000 274 years
Instruments
All items are measured on a seven-point scale where the anchors range from ‘strongly disagree’ (1) to ‘strongly agree’ (7). A seven-point scale is the perfect balance between having enough point of discrimination without having to maintain too many response rates (Nunnally, 1978).
Trust: Is measured by nine items adapted from Mayer et al. (1995). The wording is such that a higher score reflects a higher degree of trust. These items adapted from Mayer et al. (1995) are chosen because they fit to the definition of trust used in this study. With the use of these items, all aspects are covered. See appendix 1.
Cooperative behaviour: Is measured by eight items adapted from Pearce (2001). To measure cooperative intent, it is important that the different items measure the amount to which people or groups act together in a coordinated way to pursue shared or complementary goals. The items from Pearce (2001) are designed to measure exactly this description of cooperative intent. As the items are used before and have proven to be good, the construct validity is high. The wording is such that higher scores reflect increased cooperation. See appendix 1.
Interorganizational information systems: Is measured by five items developed by Nicolaou et al (2011). These items are based on prior studies that measure how management accounting information both influences and facilitates organizational decision making adapted to an alliance setting. See appendix 1.
Control variables: The length of the collaboration and the number of business partners is taken into account, because these factors can influence the relationships between ISI, control, cooperation and trust.
Data analysis
All data is analysed with SPSS version 20 (Statistical Package for the Social Sciences). Data is collected on firm level and has an interval nature.
To determine whether different items of one variable can be combined into one factor, a factor analysis is done. To determine the appropriateness of the factor analyses, the Bartlett test of sphericity and the measure of sampling adequacy (MSA) (> 0.6) are conducted.
When the factor analysis is done, the reliability of the items is analysed. The reliability of any measurement procedure consists of estimating how much of the variation is attributable to chance or random errors. The method for evaluating reliability is determining the Cronbach Alpha. For the measurement to be reliable, the Cronbach Alpha has to be > 0.7 (Cronbach, 1951).
As the links between control, trust and cooperation are already investigated by Colleti et al. (2005), the main focus of this research is the moderator analysis; the effect of interorganizational information systems on the relations between trust, control and cooperation. Because all items consist of interval data, a regression analyses is used to examine those influences. Table 2 gives an overview of the independent and dependent variables for the different relationships. The models in table 1 are analysed by a regression of the independent en dependent variables. The control variables are tested separately.
Table 2. Moderator analysis, independent and dependent variables
Relation Independent variables Dependent variable
Control-cooperation Control ISI Control x ISI Cooperation Cooperation-trust Cooperation ISI Cooperation x ISI Trust Control-trust Control ISI Control x ISI Trust 4. Results
In this section, the outcomes of the analyses are reported. First the factor analysis and the Cronbach’s alpha, together with descriptive statistics will be reported. Second the hypotheses have been tested and reported. Finally, the influence of the control variables will be tested. An overview of the results is presented in figure 2.
Factor analysis and Cronbach’s alpha
To determine whether the different items can be combined into one factor, a factor analysis is done. It is appropriate to perform the factor analysis. The KMO resulted in 0,679 (p < 0.001) and the Bartlett test of sphericity resulted in a significant chi-square (F (435), p < 0,001). This means that the different items can be combined into factors. The factors analysis shows that four items have to be removed to combine the different items into factors. Items four and eight of trust and items one and eight of control are removed. After these items have been removed, the different items can be combined into four factors.
To determine the reliability of the remaining factors, the cronbach alpha is computed. All factors are reliable. A summary of the cronbach alpha and other descriptive statistics can be found in table 3.
Table 3. Descriptive statistics, cronbach alpha
N of items Cronbach Alpha
Minimum Maximum Mean Standard
deviation ISI 5 0,89 1,00 6,40 4,30 1,22 Control 6 0,72 2,67 6,67 4,64 0,88 Cooperation 8 0,81 3,13 6,75 5,32 0,70 Trust 7 0,76 4,00 6,71 5,42 0,64
ISI, control and cooperative behaviour
To analyse whether a higher degree of ISI enhances the relationship between control and cooperative behaviour, a regression analyses is performed. The regression analysis shows that there is a significant, positive relationship between control and cooperative behaviour (B = 0,103, p = 0,072). This suggests that an increase in control leads to increased cooperative behaviour.
The relationship between ISI and cooperative behaviour is not significant. R2
= 0,069, B = -0,17, t (81) = -0,255, p = 0,799. This suggests that there is no direct effect of ISI on cooperative behaviour. Also the relationship between the computed variable Control*ISI and cooperative behaviour is not significant. R2
= 0,069, B = 0,103, t (81) = 1,504, p = 0,137. This suggests that ISI has no effect on the relationship between control and cooperative behaviour and that ISI is used for other purposes than strengthening this relationship.
ISI, cooperation and trust
To analyse whether a higher degree of ISI enhances the relationship between cooperation and trust, a regression analysis is performed. The regression analysis shows that there is a positive significant relationship between cooperation and trust, R2
= 0.289, B = 0,481, t (81) = 5,574, p < 0.001. This suggests that an increase in cooperative behaviour will lead to a higher level of trust.
The relationship between ISI and trust is not significant. R2
= 0,289, B = 0,058, t (81) = -0,547, p = 0,567. This suggests that there is no direct relation between the degree of ISI and the degree of trust. Also the relationship between the computed variable cooperation*ISI and trust is not significant, R2
ISI, control and trust
To analyse whether a higher degree of ISI enhances the relationship between control and trust, a regression analysis is performed. The regression analysis shows that there is a weak significant positive relationship between control and trust, R2
= 0,044, B = 0,154, t (81) = 1,843 p = 0,069. This suggests that an increase in control leads to a higher degree of trust. The relationship between ISI and trust is not significant, R2
= 0,044, B = -,045, t (81) = - 0,739, p = 0,462. This suggests that there is no direct relationship between ISI and the degree of trust. Also the relationship between the computed variable control*ISI and trust is not significant, R2
= 0,044, B = 0,018, t (81) = 0,294, p = 0,770. This would suggest that ISI has no effect on the relationship between control and trust and that ISI is used for other purposes.
ISI and control
In addition to the moderator analysis, a regression analysis is performed between ISI and control. ISI is regressed on control. The regression analysis shows that there is a significant positive relationship between ISI and control, R2
= 0,061, B = 0,162, t (81) = 2,278, p = 0,025. This suggests that a greater use of ISI will lead to a higher degree of control.
Control variables
The constructs have been controlled for two aspects; the length of the collaboration and the number of business partners.
The length of the collaboration differs within the sample. The minimum length is one year, the maximum length of the collaboration is 77 years. The average length of the collaboration is 11.94 years.
In order to analyse whether or not the length of the collaboration influences trust, a regression analysis is performed with the length of the collaboration regressed on trust. The regression analysis was not significant, R2
= 0,004, F (1,80) = 0.30, p = 0,58. This suggest that the length of the collaboration has no influence on trust, B = 0,003, p = 0,586.
In order to analyse whether or not the length of the collaboration influences cooperative behaviour, the length of the collaboration is regressed on cooperative behaviour. The regression analysis was not significant, R2
= 0,015, F (1,80) = 1,24, p = 0,27. This suggest that the length of the collaboration has no effect on cooperative behaviour, B = -0,006, p = 0,268.
The number of business partners differs within the sample. The minimum number of business partners is one, the maximum number of partners is 150. On average, there are 5,40 business partners during the collaboration. Most of the companies have two business partners during the collaboration.
In order to analyse whether or not the number of business partners influences trust, a regression analysis is performed, with the number of business partners regressed on trust. The regression analysis was not significant, R2
= 0,011, F (1,80) = 0,91, p = 0,34. This suggest that the number of business partners does not influence the degree of trust, B = 0,004, p = 0,342.
In order to analyse whether or not the number of business partners influences cooperative behaviour, the number of business partners is regressed on cooperative behaviour. The regression analysis is not significant, R2 = 0.112, F (1,80) = 1,013, p = 0.32. This suggests
that the number of business partners does not influence the degree of cooperative behaviour, B = 0,005, p = 0.317.
5. Discussion
The aim of this research was to find out whether interorganizational information systems influence the relationships between control, cooperation and trust. Because of the limited numbers of respondents, this research does not provide definitive answers. Yet it provides the basis for further research. The findings of the effects of ISI on these relationships are discussed here.
ISI, control and cooperation
Based on previous literature, the following was hypothesized: ‘ISI has a positive effect on the link between control and cooperation’. This hypothesis is rejected. No significant effect is found of ISI on the link between control and cooperation. It was expected that ISI would have a positive effect on the relationship between control and cooperation by making the outcomes of the control mechanisms visible. In addition to this, there is a positive effect of ISI directly on control. A possible explanation is that ISI are actually used as a form of control, rather than a support mechanism. Previous studies distinguish between the control and coordination function of ISI in a partnership (Dekker, 2004; Tomkins, 2001). When ISI is used for coordination means, information facilitates decision making before actions are taken. When ISI is used for control purposes, information is used for verifying and evaluating the actions of the partner. In this case, ISI is used as a diagnostic tool; information of performance is gathered and monitored after actions have been taken (Nicolaou et al, 2011). This relates closely to output and behaviour control (Das & Teng, 1998). Behaviour control mechanisms specify how partners should act and monitor whether actual behaviour comply with the specified behaviour (Dekker, 2004). Output control is based on the measurement of outputs and serves the control needs of the organization as a whole. This indicates that ISI is used a control mechanism instead of creating information visibility between the partners.
ISI, cooperation and trust
behaviour and increasing trust in the alliance partner. Besides the reputation of the partner, previous experience with the partner leads to trust building (Del Campo, 2014). The companies gain tacit knowledge about each other, which reduces the need for information. On the other hand, Tomkins (2001) has stated that information reduces uncertainty and thereby increases trust. Information integration can establish a trusting relationship and mutual confidence. Information visibility is useful to prevent opportunistic behaviour (Wei et al, 2012). The analysis showed that ISI has no influence on the relationship between cooperation and trust. As previous experience with and the reputation of the alliance partner are strong predictors of trust, and integrated information systems is not necessary needed to enhance this relationship.
ISI, control and trust
The following was hypothesized: ‘ISI has a positive effect on the link between control and trust’. This hypothesis is rejected. No significant effect is found of ISI on the link between control and trust. As Das & Teng (1998) stated, there are different forms of control; formal and informal control. When ISI is used as a control mechanism (Nicolaou et al, 2011), it can enhance trust. ISI then provides a ‘track record’, which indicates the performance of the partner and in the end, may build trust (Das & Teng, 1998). As explained before, ISI is used as a control mechanism instead of creating information visibility between partners. In the case of informal control, social control relies on normative considerations. This type of control is embedded in members’ judgment and competence, which is the basis for trust (Das & Teng, 1998). ISI is not needed to support information visibility, because it is embedded in mind of the members rather than in a system. With both types of control, ISI is used for different purposes than expected (used as a control mechanisms or not used at all), which might explain that ISI has no effect on the link between control and trust.
6. Conclusion
Because of the lack of research on the influence of the critical success factor ISI on the links between control, cooperation and trust, and the contradicting findings of previous research on ISI, the main research question of this study was: ‘What is the effect of the role of information on the links between control, trust and cooperation?’
what was expected. A possible explanation is that information systems are most of the time used as a control mechanism rather than a supporting mechanism. In this case, information systems have a direct influence on control, instead of on the relationships between control, trust and cooperation. Another explanation is that information systems are not always necessary to monitor behaviour. In the case of informal control, monitoring behaviour is done within the mind of people. Also, the reputation of the partners is sometimes perceived as being more important than legal sanctions to ensure cooperation. Information systems are than needless for strengthening the links between control, trust and cooperation.
Theoretical implications
This research contributes to the trust/control discussion by examine the influence of information on the links between trust, control and cooperation. The influence of information on these links was not yet investigated. As there is no effect of information on these links, this research is the basis for further research on the effect of information on the different parts of trust, control and cooperation.
Managerial implications
For managers, it is important to acknowledge the cost-benefit trade-off of information systems. Implementing information systems is very costly and the benefits are not always visible (Vaughan et al, 2013). Often, the implementation of an information system is seen as an investment rather than expenditure. The investment is often justified on the basis of subjective arguments or as acts of faith (Vaughan et al, 2013). As this research shows, information systems cannot be used for strengthening the links between control, cooperation and trust. This means that implementing an information system does not lead to enhanced cooperation or trust building in collaborations. On the other hand, ISI can be used for control purposes. In this case, managers have to determine whether the benefit of implementing ISI as a control mechanism exceeds the costs of the implementation and use of ISI.
Limitations
control within a collaboration (Jing et al, 2009). As Jones and George (1999) stated, trust develops over time. In the beginning of the collaboration, there will be little trust (in spite of control and cooperation) and this will increase (or decrease) over time (Jones & George, 1999). As the independent variables change over time, the measurement of these items at one moment form a limitation of this study.
The research is conducted in the Netherlands. Regional differences are encountered, because all regions in the Netherlands are included in the study. Therefore, this research is generalizable for all companies in the technological-industrial sector in the Netherlands. Tobias et al. (2003), states that control is influenced by, and embedded in, the cultural context of different countries. Culture can also influence the use and successful implementation of information technology. Variation across cultural values leads to different perceptions in which information systems are developed. (Leidner & Kayworth, 2006) As the independent variables in this study are heavily affected by culture, generalizability across other countries is most likely to be low.
Because of the low response rate (5,1%), this research is conducted based on 82 respondents. A higher number of respondents would be more preferable to perform a more reliable analysis.
Further research
As this research was conducted at one moment in time, a case study would be useful to gain more insight in the development of trust, control and cooperation over time. With a case study, all stages of the collaboration can be observed. Changes in control and cooperation can be observed and the degree of trust can be measured at the different stages. At the same time the use of ISI and the effect of ISI on those relationships can be measured. In this way, more insight will be gained for the implications of the different stages of the collaboration.
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Appendix 1: Construct measurement items
Control variables
1. Please indicate the number of the formation of the alliance you refer to (Tomkins, 2001)
2. Total number of business partners in the alliance you refer to (Kusari et al, 2013)
Trust (α = 0,76): Mayer et al. (2005) 1. Our partner is very capable of performing its job.
2. Our partner has much knowledge about the work that needs done 3. I feel very confident about out partner’s skills
4. Our partner is very concerned with our welfare
5. Our needs and desires are very important to out partner 6. Our partner would not knowingly do anything to hurt us. 7. Our partner will go out of his way to help us.
8. I never have to wonder whether our partner will stick to his word. 9. Our partners tries hard to be fair in dealing with others
Control (α = 0,72): Martinez & Jarillo (1991)
1. Within this collaboration, the degree of autonomy of decision making is high 2. Within this collaboration, the level of formalization is high
3. Within this collaboration, the extent of planning is high 4. Within this collaboration, the extent of output control is high
5. Within this collaboration, the level of participation in committees, teams or tasks forces is high
6. Within this collaboration, the extent of informal communication is high 7. Within this collaboration, the degree of socialization is high
Cooperative behaviour (α = 0,81): Pearce (2001)
1. The companies are open to modifying their agreement if unexpected events occur 2. Changes in ‘fixed’ terms are willingly made by the partners, if it is considered
necessary
3. Exchanges of information between the companies take place frequently, informally and openly
4. It is expected that the companies will openly provide information if it can help the collaboration
5. The companies keep each other informed of changes and events that might affect them 6. In most aspects of their relationships, the companies share the responsibility for
getting things done
7. Problems that arise within the collaboration are treated as joint rather than individual responsibilities
8. The responsibility for making sure that the collaboration works is shared.
Interorganizational information systems (ISI) (α = 0,89): Nicolaou et al. (2011)
1. The use of IT systems in general has allowed my firm to better coordinate decisions with the exchange partner in this alliance.
2. The use of IT systems collaborative capabilities has allowed my firm to better coordinate decisions with the exchange partner in this alliance.
3. The use of IT systems increases transparency of my alliance partner’s cost structure.
Information provided by my firm’s IT systems enables
4. Adequate control over outcomes or results of actions taken by my exchange partner in the alliance
