Electronic Data Interchange (EDI) adoption in automobile suppliers

This research is a study of Electronic Data Interchange (EDI) adoption and implementation in the US automobile suppliers. We find that both resource dependence perspectives and transaction cost perspectives are applicable in the analysis of EDI adoption. This research shows that buyers' power advantage over suppliers has a dominant role, while high need for coordinating business transactions creates incentives for buyers to promote EDI to their suppliers. The characteristics of EDI as an inter-organizational system make "network externality" judgements important.;We find that the diffusion of EDI in the second-tier suppliers is slower than in the first-tier suppliers. This is mainly because of the significantly second-tiers' lower perceptions of EDI benefits, both operationally and strategically, than those of first-tiers. This study shows hardly any significant differences between US companies and Japanese transplant companies in the process of EDI adoption.;We also empirically prove that the success of EDI implementation strongly depends on the degree of EDI external integration. Interestingly, although the aspects of buyer-supplier relations are found to be significant determinants in the process of EDI adoption, these aspects have no significant effect on the suppliers' decision to externally integrate their EDI systems. On the other hand, our study shows the crucial role of managerial proactiveness on the suppliers' decision to further externally integrate their EDI systems to suppliers and banks, even its role is more significant than financial resources.