Factors affecting inter organizational knowledge sharing through IOS

Chapter Introduction 1.1 Interorganizational Knowledge Sharing through IOS Achieving competitive advantages is of paramount importance for the firm’s survival in today’s hyper-competitive environment. Firms can strive for supernormal gains from either external industry sources (Porter, 1980), or from internal resources and capabilities (Barney, 1991). However, the image of atomistic actors competing for profits is increasingly inadequate as the firms are embedded in networks of exchange, professional, and social relationships with other organizational actors. A firm’s critical resources may span firm boundaries and may be embedded in inter-firm resources and routines (Dyer and Singh, 1998). Most firms form strategic alliances to improve their performance by gaining supernormal return. Some alliances exploit the productivity of capital and assets through joint maximization of complementary assets, while others are exploratory and involved in the pursuit of new opportunities (Koza and Lewin 1998). Indeed, firms’ choosing to engage in cooperative interorganizational activities has become a hallmark of the current business era. Strategic alliances can derive competitive advantage from four sources, i.e., relation specific assets, knowledge-sharing routines, complementary resources/capabilities and effective governance (Dyer and Singh, 1998). Knowledge sharing in terms of accessing and acquiring critical information and know-how from partners is often stated to be one of the foremost motivations for alliance formation (Hamel, 1991; Khanna, et al., 1998; Larsson, et al., 1998). By institutionalizing a regular pattern of interorganizational interactions that permits the transfer, recombination, or creation of specialized knowledge, participating firms expect to generate supernormal gains (Dyer and Singh, 1998; Grant, 1996). The catalyst for the firm to share knowledge with other organizations is the society’s transition from the industrial to the postindustrial or knowledge age. The industrial age was characterized by the conventional wisdom that land, labor, and capital were the factors of production. The transition to postindustrial age has brought to the forefront a factor of production – knowledge, which is critically different from the others. Land, labor, and capital are subject to diminishing returns; i.e., the output associated with greater use of the factor increases at a decreasing rate. Different from these traditional factors of production, knowledge is not subject to decreasing returns. Instead, the output associated with knowledge input increases at an increasing rate (Reich, 1992). By sharing knowledge with other organizations, the firm can achieve the synergy brought about by accumulating and consolidating knowledge of different parties. Thus, knowledge sharing alliance allows the organizations to better detect and seize market opportunities, respond to market changes and meet customers’ requirements more swiftly. On the other hand, reaping the benefits of sharing knowledge with other organizations is possible because of the advances of information and communications technology. The information systems that span the organizational boundaries and integrate applications across the organizations are called interorganizational systems (IOS) (Bakos, 1991; Barrett and Konsynski, 1982; Chismar and Meier, 1992; Konsynski, 1993; Kumar and van, 1996). IOS support and implement cooperation between strategic alliance partners (Kumar and Dissel, 1996) and they can sufficiently reduce the coordination cost of information exchange across organizational boundaries. As an automated information system shared by companies, the IOS allow the firms to interact electronically in a real time manner and thereby facilitate the creation, storage, transformation and transmission of knowledge (Barrett and Konsynski, 1982; Johnston and Vitale, 1988; Grover, 1993). Indeed, the increased knowledge flows enabled by IOS are identified as a potential factor that can change the industrial structure and provide competitive advantage (Porter, 1985). Moreover, IOS are becoming more and more accessible to the firm due to the advent of the Internet. Different from the value-added networks, on which EDI has been based, the Internet allows firms to communicate with each other in an economical way and Internetbased IOS are affordable to the small and medium sized companies. Also, the applications developed based on the backbone of the Internet provide more functional supports for interoganizational interactions than EDI. For example, videoconference allows the participants to communicate with each other efficiently and effectively, with most of the cues of face-to-face discussion being present, while saving the firms traveling cost. In addition to sharing standard electronic files, the personnel from different organizations can also discuss about innovative ideas and demonstrate how to get some sophisticated work done through the Internet. Hence, sharing knowledge through Internet-based IOS between firms is no longer technically challenging or cost prohibitive for the firm. In the industry, there are successful cases of interorganizational knowledge sharing, such as the cooperation between Wal-Mart and P&G. Given knowledge sharing being part of their business strategy, these firms set up IOS to facilitate the interfirm information exchange processes so that the information strategy can be aligned with their business strategy (Chan, et al., 1997; King and Teo, 1997; Reich and Benbasat, 1996; Reich and Benbasat, 2000). By leveraging the knowledge in managerial controls from partners (Applegate, et al., 1999; Premkumar and Ramamurthy, 1995), firms achieve their organizational objectives and enhance their performance. 1.2 Motivation of the Research Despite the great benefits, technical feasibility and economic affordability of sharing knowledge through Internet-based IOS, it has been widely appealed that interorganizational knowledge sharing is far from enough, especially among the small and medium enterprises (SME). Studying factors affecting the organization’s predisposition to share knowledge with other firms through IOS is of great importance. In addition to explaining why firms are holding back in sharing knowledge with others, it can help to get more firms to embrace knowledge sharing and provide guidelines for the firms that are deciding whether to share knowledge. However there is little research exploring the factors affecting the firm’s decision on whether to share knowledge with a specific partner. Though interorganizational knowledge sharing has become a popular research topic in recent years, a majority of the studies are either on mathematical modeling of the potential economic benefits of interorganizational knowledge sharing or how to manage the knowledge sharing process. For example, Dyer and Nobeoka (2000) examine the “black box” of knowledge sharing and identify the effective methods in creating and managing alliance knowledge sharing processes in their Toyota case study. Khanna et al. show how the tension between cooperation and competition affects the dynamics of learning alliances. Hamel (1991) examines the success factors in knowledge sharing. Dussauge et al. (2000) investigate the outcomes and durations of knowledge sharing strategic alliances among competing firms. Nonetheless, there is little literature studying factors that can affect the formation of interorganizational knowledge sharing alliances, though the formation of strategic alliances aiming to share traditional production factors was once the focus of strategy study such as the work of Williamson (1991), Teece (1986), and Harrigna (1988). Different from the traditional production factors, knowledge has become critical company asset and the only resource making the firm perform differently in the knowledge age. Also, once shared with other organizations, knowledge becomes public good - one where the consumption of the good by one firm in no way prevents the other from consuming the good (Kreps, 1990). The characteristics of knowledge make the firm lose control of how the other party utilizes the proprietary knowledge shared by the focal firm (Kumar and Dissel, 1996). Thus, interorganizational knowledge sharing is more sensitive and directly affected by the organization’s business strategy. Decisions on whether to form such a kind of strategic alliance, whom to form with and under what conditions to form, have become more complicated than other types of strategic alliance. While the insights offered by the extant interorganizational cooperation literature may help us to understand factors affecting the organization’s predisposition to share knowledge, they cannot be readily generalized to the context of knowledge sharing due to the special characteristics of knowledge. Thus, a study dedicated to factors conducive to the formation of interorganizational knowledge sharing alliance is necessary and imperative. In addition, interorganizational knowledge sharing through IOS, as an innovation, has not been well studied. The existing IS literature on IOS mainly focuses on the adoption of EDI, which generally refers to a class of interorganizational systems that enable computer-to-computer exchange of standard business documents (Iacovou et al. 1995). Knowledge sharing through IOS is of different strategic meaning from exchanging business documents and factors affecting EDI adoption may not be valid factors affecting knowledge sharing through IOS. For example, a majority of the existing studies use the diffusion of innovations theory (Rogers, 1983) to identify attributes of the innovation that influence EDI adoption. Lack of resources and low perceived relative benefits are commonly found to be the major factors impeding organizations’ EDI adoption. Since knowledge sharing through Internet-based IOS is more economic than EDI over valueadded network, lack of resources may not be a factor impeding the firm to share knowledge with its partners. As IOS support unstructured information exchange, in addition to the exchange of standardized documents, and the Internet and Internet applications support more functionalities for rich knowledge sharing at affordable cost, IOS research should be extended to the Internet domain and knowledge sharing should be studied as an innovation different from EDI. On the other hand, to have the firms adopt sharing knowledge with partners through IOS may require the presence of some other factors that have not been studied by traditional innovation adoption theories. These theories focus on studying innovations for individual people or individual organizations, while interorganizational knowledge sharing requires both dyadic firms to adopt the innovation to reap its benefits. When deciding whether to share knowledge with a specific partner, factors other than those that affect innovation adoption by a single firm may play critical roles. Studying these factors’ affecting the organization’s predisposition to share knowledge through IOS can enhance our understanding of the innovations spanning organizational boundaries. Motivated by the importance of understanding factors affecting the firm’s decision on whether to share knowledge with a specific partner and the lack of research on this topic, we conduct this study. In particular, we focus on the firm and its one-to-one relationship with its strategic partner with regard to the focal firm’s knowledge sharing decision. The presumption of the study is that interorganizational knowledge sharing can offer competitive advantages to the firm, if properly managed, and IOS enables effective and efficient interorganizational knowledge sharing. 1.3 Research Questions We examine factors influencing the firm’s decisions on whether to share and the extent to which it would share knowledge with a specific partner. One the one hand, the firm may choose to share knowledge of different quality and quantity through IOS. Due to the information asymmetry and the stickiness of knowledge, it is difficult for the other party to evaluate the quality and quantity of knowledge shared by the focal firm. Thus, it allows the firm to proactively control the quality and quantity of knowledge shared by controlling the traffic and contents going through the IOS, different from the traditional way of knowledge sharing, such as personnel exchange, which makes knowledge hoarding difficult. On the other hand, the firm would choose to share knowledge of different quality and quantity. Though the higher the quality and the larger the quantity of knowledge shared, the more synergy the dyadic firms can achieve, it may not be optimal for the firm to so. The relationship with the partner is a mix of cooperation and competition and the firm still has business goals different from that of the other party. Thus, the firm may strategically choose the quality and quantity of knowledge to share and we intend to understand the factors that affect the firm’s decision making on this issue. Specifically we focus on the knowledge sharing between suppliers and customers because there are a lot of researchers advocating sharing knowledge among the members in supply chain and some reports arguing the sharing in the industry is far from enough. The interorganizational knowledge sharing involves cooperation and commitment of the channel members in the supply chain. The participants may have complex economic and business relationships with each other that result in a number of social, political, and economic factors influencing the decision to share knowledge through IOS. There are two broad research streams – economic and socio-political streams – that form the basis for the studies of cooperation along the supply chain. The economic stream applies transaction cost economics to investigate the formulation of various decision in supply chain (Bakos and Treacy, 1986; Malone, et al., 1987). The social-political stream studies the impact of socio-political forces on the formation of markets and cooperation decisions (Hart and Saunders, 1997; Hart and Saunders, 1998). While economy oriented researchers totally ignore the role of socio-political factors, socio-political oriented scholars contend that inter-organizational relationships could exist even if they are not cost-efficient because of other social political forces. By drawing upon transaction cost economics and socio-political theories, we intend to find answers to the following questions: 1. What are the important factors affecting the firm’s intention to share knowledge with a specific partner? 2. How these factors affect the firm’s predisposition to share knowledge with this partner? 3. How these factors affect the firm’s decision on the extent to which they would share knowledge with this partner, in terms of knowledge quality and quantity? 1.4 Research Methodology To explore our research questions, we use a mixed method – conducting qualitative and quantitative studies sequentially. Specifically, we conduct a series of case studies first. Based on what we found in the field study and insights provided by our interviewees, we designed our experiment and conducted the experiment with a large university in Singapore. The motivation for adopting a mixed method is to take advantage of the context rich and in-dept analysis of case studies and the more precise and generalizable results of quantitative studies. The field interviews we conducted, prior to developing and administering our experiment, permits us to gain insights into organizational context within which the quantitative variables are captured. It also helps us to modify the procedures, assumptions and hypotheses for our experiment study. The refinements to our research hypotheses and data collection procedures enhance the validity of our quantitative study. On the other hand, we had the quantitative study follow our case studies so that we can empirically test the validity of our case study findings on a large scale and have the quantitative data corroborate our field study. 1.5 Organization of Thesis This thesis comprises seven chapters. Chapter underlines the prevalence of interorganizational knowledge sharing in current business world. It discusses the importance of studying the factors affecting the firm’s decision on interorganizational knowledge sharing through IOS with. It also presents the main research questions of this thesis. 10 APPENDIX A-4 LOW TRUST AND ASYMMETRIC DEPENDENCE SCENARIO A CASE OF KNOWLEDGE SHARING DECISION MAKING Introduction With the development in information communications and technology, trading partners can improve the performance of the supply chain by sharing their knowledge about the market and production technology. For example, with the sharing of accurate and realtime information of consumer-demand, inventory status, forecasting techniques, retailers and their suppliers can jointly develop production plans, sales forecast and replenishment plans. By using the combination of partners’ knowledge to orchestrate the performance of the supply chain, the firms can simultaneously reduce inventory levels and increase sales for both parties. For example, one of Kmart’s first knowledge sharing and joint action pilots, with Kimberly-Clark, resulted in a 14 percent increase in sales, as well as in-stock improvements that went from 86 percent to 94 percent without increases in overall inventory. Similarly, in its pilot with Warner-Lambert, Wal-Mart improves in-stock levels on Listerine to 98% from 87%. Lead times were reduced form 21 days to 11; onhand inventory was cut by two weeks; order s were more consistent; production cycles were smoothed; Listerine’s sales increased by $8.5 million. As the CEO of XYZ Corporation, you agree that knowledge sharing between trading partners may provide great benefits if it is properly managed. On the other hand, it may expose your firm to opportunistic behavior of your partner. The partner might use the shared knowledge against you, especially when the alliance fails. Hence, whether to share your knowledge, with which partner to share knowledge, under what condition to share knowledge and to what extent you share your knowledge, are strategic issues you are concerned about. Vignette Please go through the following paragraphs describing the business environment and the relationship between your firm and one of your CUSTOMERS, ABC. 180 (1) ABC is your new trading partner and you are not sure whether you share the same values. The cooperation with ABC so far turned out to be sort of unpleasant, you don’t exchange ideas freely with each other. Last but not least, reputation is NOT valued that much by the partner’s culture. Some episodes of your experience with ABC are as follow: -- Once your company miscalculated the amount of labor required to make the product and, as a result, had under priced the product and lost lots of money on that deal. Even though the mistake should be obvious to ABC at the negotiation, but they didn’t point it out for you, but placed an unusually large order. When you brought the problem to the attention of ABC later on, ABC insisted that it is your company’s fault and required your firm to fulfill the contract. -- ABC doesn’t value an open and honest dialogue that much. The people from ABC haven’t been honest about what they CAN and CAN NOT when they are negotiating with your firm. -- ABC never provides its partners with coherent rationale for its channel decisions and policies. It once promised to put your products on some of the best show shelves when it bargained for better prices with your firm. But when your colleagues visited ABC’s stores, they found that ABC didn’t as what they promised though ABC did get better price from your firm. Even worse, ABC insisted on not carrying out its promise after your firm protested several times. (2) Though ABC is your new trading partner, the trading volume between your firm and ABC has increased quickly and it became one of your major trading partners. More than 30% of your sales revenue and profit come from the trading with ABC, but less than 5% of ABC’s sales come from the trading with your firm. ABC accounts for more than 40% of retailing sales of the line of products your firm produces and there are few major retailers carrying your products. Moreover, the cost of carrying extra inventory is very high for you and your products become obsolete quickly. On the other hand, there are a lot of other suppliers carrying similar products as your firm does and there exist many substitutes of your products for ABC in the market. Hence, it is extremely difficult for 181 your firm to replace ABC with other carriers and the cost is substantially high if you lose the business with ABC. But it is much easier for ABC to replace your firm with other suppliers and the switch cost is very low. Some more information about dealing with ABC; -- ABC has considerable expertise in the marketing of your products. It knows the market and the business much better than you. -- ABC feels that there are great benefits, such as sales increase, faster new product development and better inventory control if your firm shares information and know-how with them. -- It provided you with some audit information showing that the current out-of-stock rates for some items are high, while the inventory of some other items has been high. ABC believes that sharing your inventory and demand information and forecasting techniques can increase sales and reduce inventory cost greatly. -- It requested that your firm shared knowledge with them through various kinds of interorganizational systems and it offered your firm a package. If you would share knowledge with them, ABC would give you a bonus of 0.5% for the sales increased. Otherwise, ABC would replace your firm with some other supplier. Based on what you have read about, you, the CEO of XYZ are making decision on the strategic issues mentioned in the introduction section, i.e., whether to share and to what extent to share your knowledge with ABC. Please fill out the questionnaire about your feelings and your decisions. Thank you! 182 APPENDIX A-5 LOW TRUST AND HIGH SYMMETRIC DEPENDENCE SCENARIO A CASE OF KNOWLEDGE SHARING DECISION MAKING Introduction With the development in information communications and technology, trading partners can improve the performance of the supply chain by sharing their knowledge about the market and production technology. For example, with the sharing of accurate and realtime information of consumer-demand, inventory status, forecasting techniques, retailers and their suppliers can jointly develop production plans, sales forecast and replenishment plans. By using the combination of partners’ knowledge to orchestrate the performance of the supply chain, the firms can simultaneously reduce inventory levels and increase sales for both parties. For example, one of Kmart’s first knowledge sharing and joint action pilots, with Kimberly-Clark, resulted in a 14 percent increase in sales, as well as in-stock improvements that went from 86 percent to 94 percent without increases in overall inventory. Similarly, in its pilot with Warner-Lambert, Wal-Mart improves in-stock levels on Listerine to 98% from 87%. Lead times were reduced form 21 days to 11; onhand inventory was cut by two weeks; order s were more consistent; production cycles were smoothed; Listerine’s sales increased by $8.5 million. As the CEO of XYZ Corporation, you agree that knowledge sharing between trading partners may provide great benefits if it is properly managed. On the other hand, it may expose your firm to opportunistic behavior of your partner. The partner might use the shared knowledge against you, especially when the alliance fails. Hence, whether to share your knowledge, with which partner to share knowledge, under what condition to share knowledge and to what extent you share your knowledge, are strategic issues you are concerned about. Vignette Please go through the following paragraphs describing the business environment and the relationship between your firm and one of your CUSTOMERS, ABC. 183 (1) ABC is your new trading partner and you are not sure whether you share the same values. The cooperation with ABC so far turned out to be sort of unpleasant, you don’t exchange ideas freely with each other. Last but not least, reputation is NOT valued that much by the partner’s culture. Some episodes of your experience with ABC are as follow: -- Once your company miscalculated the amount of labor required to make the product and, as a result, had under-priced the product and lost lots of money on that deal. Even though the mistake was obvious to ABC at the negotiation, but they didn’t point it out for you, rather they placed a large order. When you brought the problem to the attention of ABC later on, ABC insisted that it is your company’s fault and required your firm to fulfill the contract. -- ABC doesn’t value an open and honest dialogue that much. The people from ABC haven’t been honest about what they CAN and CAN NOT when they are negotiating with your firm. -- ABC never provides its partners with coherent rationale for its channel decisions and policies. It once promised to put your products on some of the best show shelves when they bargained for better prices with your firm. But when your colleagues visited ABC’s stores, they found that ABC didn’t as what they promised though ABC did get better price from your firm. Even worse, ABC insisted on not carrying out its promise after your firm protested several times. (2) Even though ABC is your new trading partner, the trading volume between your firm and ABC increased quickly. ABC and your firm have become major trading partners to each other. More than 30% of your sales revenue and profit come from the trading with each other last year. ABC accounts for more than 40% of retailing sales of the line of products your firm produces and there are few major retailers carrying your products. Moreover, the cost of carry extra inventory is very high for you and your products become obsolete very quickly. On the other hand, your firm is one of the biggest suppliers for this line of products and there is no perfect substitute of your products for ABC in the market. Hence, it is extremely difficult for either firm to replace the other 184 with other firms and the cost is substantially high for both firms if they lose the business with each other. Some more information about dealing with ABC; -- ABC has considerable expertise in the marketing of your products. It knows the market and the business pretty well. Similarly, you firm are very good at producing the line of products traded with ABC. -- ABC feels that there are great benefits, such as sales increase, faster new product development and better inventory control if you share information and know-how with each other. -- ABC provided you with some audit information showing that the current out-of-stock rates for some items are high, while the inventory of some other items are too high. ABC believes that sharing your inventory and demand information and forecasting techniques can increase sales and reduce inventory cost greatly. -- It requested that your firm shared knowledge with them through various kinds of interorganizational systems and it offered your firm a package. If you would share knowledge with them, ABC would give you a bonus of 0.5% for the sales increased. Otherwise, ABC MIGHT start finding other sources of supply. Based on what you have read about, you, the CEO of XYZ are making decision on the strategic issues mentioned in the introduction section, i.e., whether to share and to what extent to share your knowledge with ABC. Please fill out the questionnaire about your feelings and your decisions. Thank you! 185 APPENDIX A-6 LOW TRUST AND LOW SYMMETRIC DEPENDENCE SCENARIO A CASE OF KNOWLEDGE SHARING DECISION MAKING Introduction With the development in information communications and technology, trading partners can improve the performance of the supply chain by sharing their knowledge about the market and production technology. For example, with the sharing of accurate and realtime information of consumer-demand, inventory status, forecasting techniques, retailers and their suppliers can jointly develop production plans, sales forecast and replenishment plans. By using the combination of partners’ knowledge to orchestrating the performance of the supply chain, the firms can simultaneously reduce inventory levels and increase sales for both parties. For example, one of Kmart’s first knowledge sharing and joint action pilots, with Kimberly-Clark, resulted in a 14 percent increase in sales, as well as in-stock improvements that went from 86 percent to 94 percent without increases in overall inventory. Similarly, in its pilot with Warner-Lambert, Wal-Mart improves instock levels on Listerine to 98% from 87%. Lead times were reduced form 21 days to 11; on-hand inventory was cut by two weeks; order s were more consistent; production cycles were smoothed; Listerine’s sales increased by $8.5 million. As the CEO of XYZ Corporation, you agree that knowledge sharing between trading partners may provide great benefits if it is properly managed. Otherwise, it may expose your firm to opportunistic behavior of your partner. The partner might use the shared knowledge against you, especially when the alliance fails. Hence, whether to share your knowledge, with which partner to share knowledge, under what condition to share knowledge and to what extent you share your knowledge, are strategic issues you are concerned about. 186 Vignette Please go through the following paragraphs describing the business environment and the relationship between your firm and one of your CUSTOMERS, ABC. (1) ABC is your new trading partner and you are not sure whether you share the same values. The cooperation with ABC so far turned out to be sort of unpleasant, you don’t exchange ideas freely with each other. Last but not least, reputation is NOT valued that much by the partner’s culture. Some episodes of your experience with ABC are as follow: -- Once your company miscalculated the amount of labor required to make the product and, as a result, had under priced the product and lost lots of money on that deal. Even though the mistake was obvious to ABC at the negotiation, but they didn’t point it out for you, rather they placed a large order. When you brought the problem to the attention of ABC later on, ABC insisted that it is your company’s fault and required your firm to fulfill the contract. -- ABC doesn’t value an open and honest dialogue that much. The people from ABC haven’t been honest about what they CAN and CAN NOT when they are negotiating with your firm. -- ABC never provides its partners with coherent rationale for its channel decisions and policies. It once promised to put your products on some of the best show shelves when they bargained for better prices with your firm. But when your colleagues visited ABC’s stores, they found that ABC didn’t as what they promised though ABC did get better price from your firm. Even worse, ABC insisted on not carrying out its promise after your firm protested several times. (2) Neither you nor ABC is a major trading partner to the other. Less than 2% of your sales revenue and profit come from the trading with each other. There are lots of retailers selling the line of products your firm carries and there are lots of other suppliers produce what your firm produces. Hence it is extremely easy for either firm to replace the other with other firms and the cost is extremely low for both firms if they lose the business with each other. Some more information about dealing with ABC; 187 -- ABC doesn’t have that much expertise in the marketing of your products. It carries more than five hundred other commodities in addition to yours. -- Though ABC requested that your firm shared knowledge with them through various kinds of interorganizational systems, it did not provide you with information of the potential benefits of such collaboration or how the benefits can be realized. -- ABC threatened that it would start finding other sources of supply if you wouldn’t share knowledge with them. On the other hand, it promised to give you a bonus of 0.5% for the sales increased if you would share knowledge with them. Based on what you have read about, you, the CEO of XYZ are making decision on the strategic issues mentioned in the introduction section, i.e., whether to share and to what extent to share your knowledge with ABC. Please fill out the questionnaire about your feelings and your decisions. Thank you! 188 Appendix B-1 Questionnaire (I) QUESTIONNAIRE – KNOWLEDGE SHARING DECISION MAKING (I) Instructions This is a questionnaire designed for evaluating your decision on whether and to what extent to share information and know-how with ABC. You should be able to complete this questionnaire in about minutes. There is no correct answer and we are interested in how you feel about the factors affecting your decisionmaking. All answers will be treated confidentially. They will only be used in statistical analyses to generate summarized totals. Based on your judgment, please fill one of the little rectangles for each question. Example: ……„…… Thank you for your cooperation! 1. DECISION TO SHARE Strongly Disagree Strongly Agree a. We intend to share information with ABC. …………… b. We intend to share know-how with ABC. …………… 2. QUALITY OF KNOWLEDGE SHARED Very Low Very High a. It is accepted or regarded as true, real, and credible. …………… b. It is correct and reliable as far as you are aware. …………… c. It is trusted or highly regarded in terms of their source of content. …………… d. It is beneficial and provides advantages from its use. …………… e. It is applicable and helpful for the task at hand. …………… f. …………… Its age is appropriate for the task at hand. g. It is timely enough to help ABC to solve its problems. h. It is of sufficient breadth, depth and scope for the task at hand. i. It is accompanied with rich contextual information for the other party to understand it precisely. …………… …………… …………… 189 Very Seldom 3. QUANTITY OF KNOWLEDGE SHARED a. Sending email instructing information whenever it is available to you. to ABC b. Uploading files containing information to the shared database whenever they are available to you. c. Having tele- or video-conferences with your partner firm to share information. d. Sending email instructing know-how procedures ABC whenever it is available to you. e. Uploading files containing know-how procedures to the shared database whenever they are available to you. f. Having tele- or video-conferences with your partner firm to discuss and share your know-how procedures. Very Frequently …………… …………… …………… …………… …………… …………… 190 Appendix B-2 Questionnaire (II) QUESTIONNAIRE – KNOWLEDGE SHARING DECISION MAKING (II) Instructions This is a questionnaire designed for evaluating your perceived level of the sociopolitical factors that may have affected your decision making. You should be able to complete this questionnaire in about 20 minutes. There is no correct answer and we are interested in how you feel about the factors affecting your decisionmaking. All answers will be treated confidentially. They will only be used in statistical analyses to generate summarized totals. Based on your judgment, please fill one of the little rectangles for each question. Example: ……„…… Thank you for your cooperation! SECTION A: SOCIO-POLITICAL FACTORS 1. TRUST Strongly Disagree a. We think the people in ABC tell the truth in negotiations. b. We think that ABC meets its negotiated obligations to our firm. Strongly Agree …………… …………… c. In our opinion, ABC is reliable. …………… d. We think that ABC takes advantage of our problems. …………… e. We think ABC does not mislead us. …………… 2. NON-COERCIVE POWER Strongly Disagree a. The information ABC provides us about how to better run our business makes sense. b. We usually consider ABC ‘s requests because they are based on good reasoning. c. The information provided by ABC is logical. Strongly Agree …………… …………… …………… 191 d. ABC has the ability to reward us in some way if we as it suggests. …………… …………… e. If we don’t comply with ABC’s wishes, we will not be as profitable. …………… f. We want to as ABC requests only because of the good things it will give us. Very Low 3. DEPENDENCE a. Proportion of total profits/sales related to profits/sales from sales to ABC. b. Importance of continued business relationship with ABC to achieve the business goals. c. Cost for our firm to replace ABC with other retailers. d. Ability of ABC to switch from our firm to our competitors for its purchasing requirements. e. Level of dependence of ABC on our firm for achieving their business goals. f. Cost for ABC to switch from our firm to our competitors for its purchasing requirements. Very High …………… …………… …………… …………… …………… …………… SECTION B: DEMOGRAPHIC DATA Matric. Card No.: Sex: F … M … Age: Years of working experience: Name of your company: Industry of your firm: Your position with the firm: Does your firm share knowledge with its trading partners? Yes… No … Number of employees in your Would you like to participate in our further study? firm: Yes… No … 192 Appendix C Case Study Interview Guide Case Study Interview Guide Preparation: Put down the interviewees’ name, title and contact. Specify goal of research to the interviewees: The goal of this research is to investigate what are the factors affecting firms’ decision on whether to share knowledge with their trading partners through IOSs and how these factors affect firms’ decision making. During the course of the interview, we will be asking you to explain your own perceptions and interpretations of your firm’s different knowledge sharing decision. Non-disclosure statement: We tape record the interviews for our own research purposes but only we review the transcripts. We not identify you or your company and we will keep all information provided by you confidential. To put your mind at ease, we will give you a copy of our confidentiality agreement. You may have the tapes back after months if you wish. The output of our research is disguised case studies. Request the interviewees to recall four KS scenarios: Much knowledge sharing with one supplier; little knowledge sharing with one supplier; much knowledge sharing with one customer; and little knowledge sharing with one customer. Some generic interview questions: 1. Is it common for firms to share proprietary information and know-how with each other? (Such as real-time demand data and inventory stock levels.) 2. What is the motivation for your firm to share knowledge with trading partners? 3. Among your clients/suppliers, usually what types of proprietary information/know-how they share with you? 4. What type of firms is more likely to share such information with trading partners? 193 5. As far as you understand, what are the main reasons for firms’ holding back on knowledge sharing? For each scenario we ask the following interview questions: 1. Do you share a lot of proprietary knowledge with this trading partner? 2. Do you use IOSs to support such knowledge sharing? What types of IOSs have you been using? 3. Which party proposed that you share knowledge with each other at the beginning? How was the proposal taken by the other party? 4. Did the initiating party try to persuade the other firm to agree to share knowledge? If yes, what type of influence strategy did they use? How did they it?(coercive and non-coercive) 5. When you were deciding whether to share knowledge with this firm, what are your major concerns? 6. How long have you been doing business with this firm? How was your experience trading with this firm? 7. Do you think this firm is trustworthy? If yes, what made you feel that you can trust this firm? Would you please describe some incidents in your dealing with this firm that might have lead to trust/mistrust the firm? 8. Do you think that trust plays an important role in firms’ decision on sharing knowledge with partners? If yes, how critical is it? 9. How important is the trading partner to your firm’s performance? Is it easy for you to find some other firm to replace this firm? 10. How important is your firm to this trading partner? Is it easy for them to replace you with some other firms? 11. Do you think that dependence structure affects your decision making on whether to share knowledge with this firm? If yes, how does it affect your decision? 12. Was the requisite investment in systems, human resources and changing business routines/practice a concern for you in deciding whether to share knowledge? 194 13. Have you ever worried about the decreased value of the investment once the knowledge sharing relationship discontinues? If yes, did such concern affect your decision making on whether to share knowledge with this firm? 14. Did you expect the firm to honor what it agreed regarding your knowledge sharing practice, such as non-disclosure of your business secrets to a third party? Were you worried about the firm’s opportunistic behavior and hurt your firm’s interests? If yes, did such concern affect your knowledge sharing decision? 15. How uncertain was your business environment when you were deciding whether to share knowledge with this firm? Would you please describe how uncertain your environment was? Did such uncertainty affect your decision on whether to share knowledge with this firm? If yes, how did it affect your decision? 16. Would you please describe how you have been sharing knowledge with this firm, in terms of the quality of knowledge shared, such as its timeliness, accuracy and context richness? What about the volume of knowledge that you have been share with the firm? 195 [...]... competitive advantage and highlights that relational view is more relevant in knowledge age It suggests that the potential benefits of interorganizational knowledge sharing motivate the firm to form strategic alliances It reviews the literature on interorganizational knowledge sharing and the extant research on factors that lead to interorganizational cooperation along the supply chain Chapter 3 reports our... figures 2.3 IOS Supporting Knowledge Sharing The advances in information and communications technology enable effective and efficient interorganizational knowledge sharing More and more organizations integrate applications and expand their information systems to reach entities beyond the organization’s boundaries to share knowledge These systems are called interorganizational systems (IOS) (Bakos,... (Thompson, 1967a) interdependence theory, Kumar and Dissel (1996) classify IOS into pooled information resource IOS, value/supplier chain IOS, and networked IOS Pooled information resources IOS, is an interorganizational sharing of common IS/IT resources, such as common databases (Kumar and Dissel, 1996) Value/supply-chain IOS support customer-supplier relationships by facilitating the interactions between... According to the knowledge- based view of the firm, the services rendered by tangible resources depend on how they are combined and applied, which is in turn a function of the firm’s knowledge (Grant, 1996) By sharing knowledge with other organizations, the firm can create new knowledge and master new ways of producing merchandise and delivering services Indeed, interorganizational knowledge sharing is critical... structure to develop and interpret explicit knowledge and only individuals with a requisite level of shared knowledge can truly exchange knowledge (Polyani, 1975) Hence knowledge is also classified based on other criteria For example, knowledge in organization can be declarative, procedural or causal knowledge (Zack, 1999) Declarative knowledge is about describing something and procedural knowledge is about... use of shared knowledge to orchestrate the activities of the chain The sharing of knowledge among members of the supply chain includes the sharing of demand information, inventory status, capacity plans, production schedules, promotion plans, demand forecast, and shipment schedules (Lee, 2000) In the industry, there is a new initiative involving extensive interorganizational knowledge sharing, called... organizational knowledge is what the organization possesses in the form of patents, publications, manuals or written know-how, regulations, and institutions It also includes dynamic process knowledge relates to actions carried out by knowledge workers and substance knowledge for knowledge application and creation 21 Hence individual knowledge cannot be taken for granted as organizational knowledge, but... Srinivasan (2001) Hence the basic assumption of our research is that knowledge sharing between organizations provides potential benefits in reducing inventory cost, cutting lead time, shortening production cycle and improving responsiveness to market demand 19 2.2 Inter- organizational Knowledge Sharing 2.2.1 Definition of Knowledge The definition of knowledge stays controversial, though it has occupied the minds... not been extensively used in IOS research (Premkumar & Ramamurthy, 1995), recent research has highlighted the need to study the impact of social and political factors on inter- organizational cooperation in the context of IOS in IS field (Hart & Estrin, 1991; Saunders & Hart, 1993) 30 In the context of EDI, there is evidence to indicate the interorganizational relational factors identified by socio-political... and underlying motives 2.2.3 Knowledge Sharing Alliances Knowledge sharing alliance is defined as an arrangement between independent firms that choose to carry out a knowledge intensive project or operate in a specific business area by coordinating the necessary skills and expertise jointly rather than either operating on their own or merging their operations Knowledge sharing alliances can be identified . Knowledge sharing through IOS is of different strategic meaning from exchanging business documents and factors affecting EDI adoption may not be valid factors affecting knowledge sharing through. interorganizational knowledge sharing in current business world. It discusses the importance of studying the factors affecting the firm’s decision on interorganizational knowledge sharing through IOS with factors affecting the organization’s predisposition to share knowledge with other firms through IOS is of great importance. In addition to explaining why firms are holding back in sharing knowledge