Impact of information technology and relational aspect on supply chain collaboration leading to financial performance

Abstract

PurposeThe purpose of this paper is to investigate the impact of use of information technology (IT) and relational aspect on supply chain collaboration (SCC) in the context of developing country, in this case India. The study has considered two important components of use of IT namely, information sharing and information quality and further investigated their impact on SCC. Two important components of relational aspect, namely, trust and commitment have been considered, as identified from literature review, trust has been considered as an antecedent to commitment and the impact of commitment on SCC has been investigated. The research also investigates the impact of SCC on financial performance of the firm.Design/methodology/approachBased on extensive review of SCC literature a research model has been proposed hypothesizing the relationships between information sharing, information quality, trust, commitment, SCC and financial performance. The proposed research model is tested using data from 166 manufacturing firms across India. Structural equation modeling was used to test the hypothesized relationships between constructs.FindingsThe results showed that there is significant positive impact of information sharing and information quality on SCC. Consistent with earlier literature, trust was found to have a significant positive impact on commitment and commitment was found to have significant positive impact on SCC. Further, the findings confirmed the positive relationship between SCC and financial performance of the firm.Originality/valueThis is the first study to the best of our knowledge which has investigated the impact of SSC on financial performance in Indian context. This study has taken into account both use of IT and relational aspect simultaneously and investigated their impact on SCC.