Empirical Research On Trust And The Influencing Factors Of Inter-Organizational Cost Management

Mutual cooperation between organizations to share each other elements of the uniquecapabilities and resources, can create competitive advantage and generate more cooperationprofits. The emergence of hybrid relational forms between organizations makes the costdecision more complicated than the neo-classical economic perspective indicates, itpromotes the development of cost management. Theory of inter-organizational costmanagement, and its main four cost management methods: target cost, functional-price-quality trade-off, concurrent engineering and concurrent cost management and openaccounting, are to reduce costs through collaborative efforts. It is consistent with that themost important one of modern enterprise business logics is how to obtain low-cost productsto maintain competitive advantage. To strengthen inter-organizational cost management, todetermine which factors may lead to and affect inter-organizational cost management, thisresearch bases on the related theory to build the model that the absorptive capacity, trust,information technology and internal cost management etc. impact inter-organizational costmanagement. The model is empirically tested using data collected from204firms in Chinaby structural equation model. Finally, the results confirm that the absorptive capacity, trust,information technology can promote inter-organizational cost management, and the positiverelationship between the variables is verified, while information technology can alsofacilitate internal cost management. These factors make the organization to complementeach other in heterogeneous resources and establish effective collaboration, and createsustainable competitive advantage (low cost advantage).