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A causal model for supply chain partner’s commitmentJengchung V. Chen a , Chen-Lin Wang a & David C. Yen ba Institute of International Management, National Cheng Kung University , Tainan , Taiwan,ROCb Department of Information Systems and Analytics , Miami University , Oxford , OH ,45056 , USAPublished online: 12 Mar 2013.

To cite this article: Jengchung V. Chen , Chen-Lin Wang & David C. Yen (2014) A causal model for supply chainpartner’s commitment, Production Planning & Control: The Management of Operations, 25:9, 800-813, DOI:10.1080/09537287.2013.764578

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A causal model for supply chain partner’s commitment

Jengchung V. Chena, Chen-Lin Wanga and David C. Yenb*

aInstitute of International Management, National Cheng Kung University, Tainan, Taiwan, ROC; bDepartment of Information Systemsand Analytics, Miami University, Oxford, OH 45056, USA

(Received 24 April 2012; final version received 15 December 2012)

The purpose of this study was to investigate the relations of information, organisation and environment on the supplychain partner’s commitment using data from the auto parts industries listed in the Taiwan External Trade Develop-ment Council. Low levels of environmental uncertainty within the context of supply chain relationships with higherlevels of intraorganisational facilitators and interorganisational relationships will have influence on the level of infor-mation sharing, quality and availability. As expected, it was found that there is a positive relationship between thelevel of information sharing, quality and availability, and the level of trust. Additionally, it was also found that thereis a positive relationship between levels of trust and commitment in supply chain relationships.

Keywords: environment uncertainty; intraorganisational facilitators; interorganisational relationships’; informationsharing; trust; commitment

1. Introduction

The global competition amongst many organisations hasmade supply chain management (SCM) an essential pre-requisite for staying competitive in the global race,enhancing profitably, and for staying alive in the fiercecompetition (Childhouse and Towill 2003; Tan, Lyman,and Wisner 2002). Until now, successful supply chainintegration with information management has beenobserved carefully by both practitioners and researchers(Cannella, Ciancimino, and Framinan 2011). Many ofthem argued that a successful supply chain performancerelies heavily on a high level of trust and a significantcommitment amongst supply chain partners (Beckett andJones 2012).

In this study, we discuss a set of factors, includingenvironmental uncertainty (contextualised as customeruncertainty, supplier uncertainty and technology uncer-tainty), intraorganisational facilitators (top managementsupport and IT enablers) and interorganisational relation-ships (trust in supply chain partners, commitment of sup-ply chain partners and shared vision between supplychain partners). Those factors are selected as importantdrivers for information sharing, information quality andinformation availability in SCM.

This study argues that commitment and trust are thekey success factors in achieving successful and lastingsupply chain integration. While a number of otherantecedents for trust and commitment in supply chain

relationships undoubtedly exist, the aim of this researchis to investigate the role of information availability, shar-ing and quality in the development of trust and commit-ment. This study also aims to extend existing researchliterature, especially in the trust and commitment effectto supply chain relationship literature. Thus, it is basedupon the research background and motivation to developa comprehensive research framework for supply chainacademicians as well as providing suggestion for supplychain managers.

2. Literature review

2.1. Supply chain environmental uncertainty

Environmental uncertainty can negatively affect organisa-tions (Chaabane, Ramudhin, and Paquet 2011; Grant2003; Wong and Boon-itt 2008) mainly because custom-ers become confused by changing markets. In turn, mar-kets struggle due to shorter product life cycles, diverseproduction lines and faster-paced technological develop-ments (Li and Lin 2006).

In this study, environmental uncertainty can comefrom three sources: customer uncertainty, supplieruncertainty and technology uncertainty (Ettlie and Reza1992). This research emphasises that environmentaluncertainty will be examined in the context of supplychain relationships. Customer uncertainty is the extentof change and unpredictability of the customer’s

*Corresponding author. Email: yendc@muohio.edu

Production Planning & Control, 2014Vol. 25, No. 9, 800–813, http://dx.doi.org/10.1080/09537287.2013.764578

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demands and tastes. Supplier uncertainty is the extentof change and unpredictability of supplier’s productscapability or delivery practice. Technology uncertaintyis the extent of change and unpredictability of technol-ogy development in a firm’s industry, and the capabili-ties to move toward supply chain integration and tobenefit from business process integration (Chizzo1998).

2.2. Intraorganisational facilitators

In this study, top management support and IT enablersare considered as the intraorganisational facilitators forinformation sharing, information quality and informationavailability in SCM. To implement effective informationsharing, top management needs to devote resources(Boucher et al. 2011). Therefore, top management sup-port is treated as the most important driver for any suc-cessfully change in the organisation (Balsmeier andVoisin 1996; Hamel and Prahalad 1989).

In addition, top management vision plays a criti-cal role to implement information sharing in supplychain. Top management must regard SCM as a prior-ity agenda and participate in significant operationaland market activities of partnering and developinginterfirm relationships (Mentzer, Min, and Zacharia2000).

2.3. Interorganisational relationships

Interorganisational relationships refer to the level oftrust, commitment and shared vision between supplierpartners, respectively. Lack of trust is considered as asignificant obstacle against information sharing(Sheridan 1998). By trusting trading partners, theyhave confidence to work out the difficulties of power,conflicts and lower profitability. There are three subdi-mensions: trust in trading partners, commitment oftrading partners and shared vision between tradingpartners. Trust in trading partners can be stated thatas the willingness to rely on a trading partner inwhom one has confidence (Abdallah, Diabat, andSimchi-Levi 2012; Ratnasingham 1998; Spekman,Kamauff, and Myhr 1998).

Commitment of trading partners refers to the willing-ness of buyers and suppliers to make efforts on behalf ofthe relationship (Spekman, Kamauff, and Myhr 1998).Sharing vision between trading partners is defined as thelevel of similar understanding of shared values andbeliefs between trading partners (Achrol and Scheer1990; Lee and Kim 1999). Therefore, the trading part-ners share the concept of what behaviours, goals andpolicies are important or unimportant, appropriate orinappropriate, and right or wrong.

2.4. Information Sharing

Information sharing is attributed to the most critical fac-tors for a successful supply chain alliance (Bowersox,Closs, and Stank 2000; Fawcett et al. 2011; Handfieldand Bechtel 2002). Information sharing refers to a firmsharing critical and proprietary information to the supplychain partners (Monczka et al. 1998). Information shar-ing is also essential between buyers and suppliers, or dis-tributors and retailers, since it enables firms to minimiseinventories and responds to fluctuation of demand in atimely manner (Croom, Romano, and Giannakis 2000).Firms can accelerate the information flow in the supplychain to improve the efficiency and effectiveness of sup-ply chain in order to bring competitive advantage in thelong run. The advantage of information sharing in SCMis the coordination between processes to simplify rawmaterial flows and reduce inventory costs.

2.5. Information quality

Information quality measures the length of the informa-tion exchanged between organisations how the informa-tion meet the needs of organisations in terms offrequency, accuracy and completeness (Petersen 1999).In this study, there are four aspects of information qual-ity as the accuracy, timeliness, adequacy and credibilityof information exchanged (Monczka et al. 1998).

2.6. Information availability

Information availability refers to the extent to which rele-vant information is available to all participants within asupply chain, as opposed to information sharing beingthe extent to which critical and proprietary information iscommunicated to one’s supply chain partner (Monczkaet al. 1998).

If information is available but cannot be shared bythe partners who must able to react to a given situation,its value degrades significantly, because no one in theposition to make decisions can actually see it, acquire itand use it. Traditionally, because of the absence of com-patible infrastructure such as software and hardware forcommunication (Siemieniuch, Waddell, and Sinclair1999), firms have operated in supply chain environmentscharacterised by insignificant information (Sinclair et al.1995). In other words, if the information is indeed madeavailable, but it ends up being too difficult to obtain bythe supply chain partners, then it is virtually useless tothe supply chain.

2.7. Trust

Ratnasingham (1998) has stated that the biggeststumbling block to success in strategic alliances and

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e-commerce cooperation formation is a lack of trust.Trust has been commonly defined as ‘perceived trustwor-thiness’ (Moorman, Deshpande, and Zaltman 1993) orconfidence that the partner will cooperate in future devel-opments of the buyer–seller relationships (Ratnasingham1998). The result of trust is that ‘firm’s belief thatanother company will perform actions that will result inpositive outcomes for the firm as well as not takeunexpected actions that result in negative outcomes’(Anderson and Narus 1990; Ratnasingham 1998).

2.8. Commitment

Commitment can be referred to when an exchange part-ner believes that ‘an ongoing relationship with another isimportant enough to warrant maximum efforts at main-taining it, that is, the committed party believes the rela-tionship endures indefinitely’ (Morgan and Hunt 1994).It is a commitment to a relationship as ‘an enduringdesire to maintain a valued relationship’ (Moorman et al.1993). These definitions have rooted in Emerson’s(1976) social exchange theory.

2.9. The research model

As seen in the aforementioned construct definitions, thecombination of external factors, as represented by envi-ronmental uncertainty in the supply chain network, andinternal factors as represented by intraorganisational andinterorganisational relationships, influence the threemajor attributes of information (Fawcett et al. 2011),which in turn is vital for cultivating trust and commit-ment between and amongst members of the supply chainnetwork (Beckett and Jones 2012). Hence, based onthese definitions, we propose our research model.Through this model, this study posits that managingimportant components influencing the smooth flow ofinformation sharing and the high quality and availabilityof information shared is the key consideration if an orga-nisation wants to develop trust and henceforth encouragecommitment from its supply chain network. Becauseenvironmental uncertainty influences organisations’degree of dependence on information vital to supplychain operations (Chaabane et al. 2011; Grant 2003;Grover and Goslar 1993; Li and Lin 2006; Wang 2001;Wong and Boon-itt 2008), it is therefore important toclosely examine the factors pertaining to informationattributes that can mitigate the risks brought about bysuch uncertainties. Similarly, because it has been positedthat both intraorganisational and interorganisational con-siderations influence organisations’ propensities andcapabilities to share information and to ensure the qualityand availability of information (Abdallah et al. 2012;Boucher et al. 2011; Chizzo 1998; Wu et al. 2004; Zhouand Benton 2007), it is also equally important to

examine whether or not such perspectives do signifi-cantly improve information sharing capabilities, informa-tion quality and information availability. This researchmodel posits that for an organisation to maximise thebenefits of information sharing, information quality andinformation availability, it must be able to manage uncer-tainties, its resources and its relationships (Fawcett et al.2011). (Figure 1).

3. Methodology

3.1. Hypothesis development

Many researchers point out that environmentaluncertainty is an important driver for quality informationsharing. In this study, we divide uncertainties into three– customer uncertainty, supplier uncertainty and technol-ogy uncertainty.

For customer uncertainty, organisations are facedwith more flexible and constantly changing markets; sup-plier and customer demands are more volatile in termsof volume, mix, lead-times and locations. Uncertainty oftechnology causes firms to lag behind the current envi-ronment and to forego business opportunities. Groverand Goslar (1993) supposed that environmental uncer-tainty is an important factor influencing information shar-ing and cooperation within supply chain partners. Inother words, the higher the level of supply chain envi-ronmental uncertainty (including customer uncertainty,supplier uncertainty and technology uncertainty), themore intensified the information processing will be(Wang 2001; Zhou and Benton 2007), and hence thehigher the level of information sharing, information qual-ity and information availability in SCM. Therefore, thefollowing hypotheses are developed based on these argu-ments:

H1a: The level of supply chain environmental uncer-tainty is positively related to the level of informationsharing in SCM.

H1b: The level of supply chain environmental uncer-tainty is positively related to the level of informationquality in SCM.

H1c: The level of supply chain environmental uncer-tainty is positively related to the level of informationavailability in SCM.

Top management vision plays an important role increating an organisation’s values and orientation. Man-agement support is treated as the most important driverfor any successfully change in the organisation(Balsmeier and Voisin 1996; Hamel and Prahalad 1989).Top managers should provide valuable insights on therole of information sharing with supply chain partnersand are willing to devote resources to implement effec-tive information sharing. In order to promote information

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sharing, and information quality and availabilitysmoothly, it is critical to get support from top manage-ment to integrate the information sharing strategy intothe SCM overall business perspective (Burgess 1998;Wu et al. 2004). In other words, the higher the level ofintraorganisational facilitators, the higher the level ofinformation sharing, information quality and informationavailability in SCM. Based on the argument, we expectthat:

H2a: The level of intraorganisational facilitators ispositively related to the level of information sharing inSCM.

H2b: The level of intraorganisational facilitators is posi-tively related to the level of information quality in SCM

H2c: The level of intraorganisational facilitators ispositively related to the level of information availabilityin SCM

An interorganisational relationship refers to the levelof trust, commitment and shared vision between part-ners. Organisations need to rely on trust, commitmentand shared vision to overcome barriers against sharinginformation with their supply chain partners. Suppliersand manufacturers often have difficulties in establishingpartner relationship due to lack of trust (Fawcett et al.2011; Sheridan 1998). The following will discuss eachof two sub-dimensions of trust: trust in trading partners,and commitment and shared vision between tradingpartners.

Trust in trading partners is the willingness to rely ona trading partner in whom one has confidence (Spekmanet al. 1998). Whereas, commitment and shared visionbetween trading partners refer to the willingness of buy-ers and suppliers to make efforts on behalf of the rela-tionship, and share similar understanding of sharedvalues and beliefs between trading partners (Achrol andScheer 1990; Fawcett et al. 2011; Lee and Kim 1999).

Commitment involves trusting the partners to incor-porate each party’s intention and expectation of continu-ity of the relationship, and willingness to invest resourcesin SCM (Mentzer, Min et al. 2000). The trading partnersshare the concept of what behaviours, goals and policiesare important or unimportant, appropriate or inappropri-ate, and right or wrong (Ballou, Gillbert, and Mukherjee2000). Therefore, it is obvious that supply chain memberswith commitment and share vision in business relation-ship as well as encourage trading partners and to sharemore information. In other words, the higher the level ofinterorganisational relationships (including trust in tradingpartners, commitment and shared vision between supplychain partners), the higher the level of information shar-ing, information quality and information availability inSCM. The argument leads to the following hypotheses:

H3a: The level of interorganisational relationships ispositively related to the level of information sharing inSCM.

H3b: The level of interorganisational relationships ispositively related to the level of information quality inSCM.

H3c: The level of interorganisational relationships ispositively related to the level of information availabilityin SCM.

With the higher level of trust, organisations tend tohave higher information sharing. A firm’s trust in supplychain partners is highly and positively correlated toinformation sharing (Chu and Fang 2006; Fawcett et al.2011). Furthermore, effective communication betweenfirms is a necessity in achieving mutual goals, and thatcommunication positively affects the quality of bilateralinterfirm relations according to Lee and Kim (1999).Kwon and Suh (2005) and Wu et al. (2004) have alsosuggested that information sharing lend to higher levelsof trust. Hence, we expect that:

Figure 1. Proposed Model.

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H4: The perceived level of information sharing is posi-tively related to the level of trust.

Information quality measures the length of theinformation exchanged between organisations andhow the information meet the needs of organisations(Petersen 1999). There is a general belief that captur-ing and sharing real-time demand information islikely to play a key role in improving the perfor-mance of the supply chain (Fawcett et al. 2011; Pat-nayukuni, Rai, and Seth 2006). Besides, trust intrading partners stimulates favourable attitudes andbehaviours to ensure the quality of informationshared (Schurr and Ozanne 1985). If all parties inthe network do not have real-time information aboutproduct specifications, transaction costs are expectedto increase due to the complexity and uncertaintyabout the right information (Hallikas, Virolainen, andTuominen 2002). The argument leads to thefollowing hypothesis:

H5: The perceived level of information quality is posi-tively related to the level of trust.

Information availability refers to the extent to whichinformation is readily available within the supply chainor actively shared by any one member. Delays in infor-mation availability, often attributed to the location offirms across the supply chain and its inaccessibility, leadto reduced information visibility, poor interactions andmismatches between supply and demand (Christopherand Juttner 2000; Lee, Padmanabhan, and Whang1997). A lack of information availability results ingreater operational inefficiencies, transaction risks andcoordination costs (Clemons and Row 1992). If informa-tion is available but cannot be shared by the partnersmost able to react to a given situation, its valuedegrades significantly. Based on argument, we formulatefollowing hypothesis:

H6: The perceived level of information availability ispositively related to the level of trust.

Spekman et al. (1998) considered trust as ‘thecornerstone of strategic partnership’. The same goes fore-commerce transactions between buyers and sellers(Ratnasingham 1998). Since ‘mistrust breeds mistrust, itwould also serve to reduce the commitment in the rela-tionship’ (Li and Lin 2006; McDonald 1981). A numberof studies have found a positive relationship betweentrust and commitment (Kwon and Suh 2005; Morganand Hunt 1994; Wu et al. 2004). Therefore, we expectthat:

H7: The level of trust is positively related to the level ofcommitment.

3.2. Instrument development

The purposes of this study are firstly to build an inte-grative research model and identify both direct andindirect relationship amongst key constructs, includingnine constructs: (1) supply chain environment uncer-tainty, (2) intraorganisation facilitators, (3) interorgani-sational relationships, (4) information sharing, (5)information quality, (6) information availability, (7)trust and (8) commitment. Empirical data for testingthe research model are collected via questionnaire. (seeTables 1 and 2)

3.3. Sample and procedure

Target respondents for this study came from auto partsassociation listed in the Taiwan External Trade Develop-ment Council (TAITRA). Five hundred questionnaireswere distributed to the target firms at an industry exhibi-tion where supervisors and employees in sales, opera-tions or logistics departments were asked to participate.There were 250 of questionnaires distributed in the exhi-bition of the Taipei International Auto Parts & Accesso-ries Show (AMPA), and another 250 questionnaires werespread by e-mail from official directory of AMPA. Twohundred and fifty-three were returned. Twenty question-naires were unusable due to incomplete data.

As a result, 233 were usable, giving an effectiveresponse rate was approximately 46.6%. The basic attri-butes of sample firm include four major items in thisstudy: (1) type of supply chain, (2) firm ages, (3)employee number and (4) annual revenue. Demographicdata show that more than 50% of the sample firmsbelong to raw materials suppliers and manufacturers.About 37.8% of the samples firms have operated formore than 21 years, and 29.2% employ more than 501people. About 30.5% of firms achieve annual sales morethan 100million. The characteristics of respondentsincluded: (1) age, (2) seniority, (3) department and (4)education level. The results showed that 36.5% of therespondents are 31–40 years old. More than 60% of therespondents have worked for the firm for more than5 years. Almost 41.2% of the respondents are in chargeof position of top management sector. Lastly, More than50% of the respondents graduated from junior college oruniversity/college.

3.4. Hypothesis testing

To verify the dimensionality and reliability of theresearch constructs, factor analysis, correlation analysisand internal consistency analysis (Cronbach’s alpha)were conducted. Factor analysis was first adopted to ver-ify the dimensionality and reliability of each researchconstruct, to select questionnaire items with high factor

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loadings, and to compare these selected items with itemssuggested theoretically. Item-to-total correlation andcoefficient alpha were assessed to identify the internalconsistency and reliability of each construct.

In this study, five criterions were used to test the fitof this model (Hair et al. 2006; Wu 2005). The chi-square value is 241.27 with 136 degree of freedom (df)and statistically significant with p-value of 0.000 signifi-cance level. Since the small samples size of 233 doesnot adversely affect the sensitivity of this measure, sig-nificant differences must be recognised. However, thestudy also notes that the chi-square test becomes moresensitive with increasing number of indicators. Usuallythe ratio of chi-square value to degree of freedom shouldnot exceed three. In this model, we got a chi-square/df = 1.774 which appears to be acceptable.

The rest of the fit indices adopted in this study crite-ria (Hair et al. 2006; Wu 2005) are the GFI (goodness-of-fit index), AGFI (adjusted goodness-of-fit index) andNFI (normed fit index). The values of those three indicesshould be greater than 0.9. The fifth one is the CFI(comparative fit index), it should be greater than 0.95.The sixth one is the RMR (root-mean-square residual).The smaller the RMR is, the better the fit of the model.A value of less than 0.05 indicates a close fit. And thelast index is the RMSEA (root-mean-square error ofapproximation). The RMSEA is acceptable when thevalue is less than 0.05. The results demonstrated a goodmodel fit with GFI of 0.908, AGFI of 0.872 andRMSEA value is 0.058.

Environmental uncertainty has no significant influ-ence on information sharing, information quality andinformation availability (λ =�0.577, λ =�4.234,λ =�1.560). In addition, path coefficients are significant

from intraorganisational facilitators (C.R.(critical ratio) isfrom 2.138 to 1.284; γ= 1.008, 3.082, 1.224), showing asignificant impact on information sharing, quality andavailability. Furthermore, path coefficients are significantfrom interorganisational relationships (C.R. is from 2.057to 0.744; γ = 0.099, γ= 1.160, γ= 0.478), showing asignificant impact on information sharing, quality andavailability. This means that amongst the three indepen-dent variables considered in this research, it is only theintraorganisational and interorganisational considerationsthat are found to be significantly influential to informa-tion sharing, quality and availability.

We also found a stronger impact on relationshipbetween interorganisational–intraorganisational relation-ships to information availability. This implies that thelow level of environmental uncertainty with high level ofintraorganisational facilitators and interorganisationalrelationships encourage the high level of informationsharing, quality and availability. A further evaluation ofthe model indicates that most coefficients of the path aresignificant (C.R. > 1.96) to point out that the level ofinformation sharing has significant influence on an orga-nisation’s trust (β= 0.427). Quality has significant influ-ence on organisation’s trust (β= 0.388), as well as thelevel of information availability on an organisation’s trust(β= 0.151). Similarly, trust has significant influence onan organisation’s commitment (β= 0.743). These implythat in order to increase the level of trust, an organisationneeds to enhance the level of information sharing withhigh quality and available access to reach higher level ofSCM. (see Table 3 and Figure 2)

It is also demonstrated that there is a positive andsignificant relationship between trust and commitment.The model suggests that amongst several constructs

Table 1. Construct Measurement.

Variables Questionnaire Composition and Measurement Sources

Supply Chain Environmental uncertainty 8 measurement items Li and Lin (2006)Seven-point Likert scale

Intraorganisation facilitators 9 measurement items Li and Lin (2006)Seven-point Likert scale

Interorganisation relationships 10 measurement items Li and Lin (2006)Seven-point Likert scale

Information Sharing 11 measurement items Li and Lin (2006);Kwon and Suh (2005)

Seven-point Likert scaleInformation Quality 5 measurement items Li and Lin (2006)

Seven-point Likert scaleInformation Availability 5 measurement items Interviews with supply chain professionals

Seven-point Likert scaleTrust 10 measurement items Kumar, Scheer, and Steenkamp (1995);

Geyskens et al. (1996)Seven-point Likert scale

Commitment 9 measurement items Kumar et al. (1995);Geyskens et al. (1996)

Seven-point Likert scale

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Table 2. Survey questions.

Variables Question items

Environmentaluncertainty

1. Customers order different product combinations over the year2. Customers product preferences change over the year3. The properties of materials from suppliers can vary greatly within the same batch4. Suppliers’ engineering levels are unpredictable5. Suppliers’ product quality is unpredictable6. Suppliers’ delivery time is unpredictable7. Technological changes provide opportunities for enhancing competitive advantage in our industry8. Technological breakthroughs result in many new product ideas in our industry

Intraorganisationfacilitators

1. Top management considers the relationship between us and our trading partners to be important2. Top management supports SCM with the resources we need3. Top management regards SCM with the resources we need4. Top management participates in SCM and its optimisation5. The extent of usage of EDI in our firm is high6. The extent of usage of EFT in our firm is high7. The extent of usage of Internet in our firm is high8. The extent of usage of Intranet in our firm is high9. The extent of usage of Extranet in our firm is high

Interorganisationrelationships

1. Our trading partners have been open and honest in dealing with us2. Our trading partners respect the confidentiality of the information they receive from us3. Our transactions with trading partners do not have to be closely supervised4. Our trading partners have made sacrifices for us in the past5. We have invested a lot of effort in our relationship with our trading partners6. Our trading partners abide by agreements very well7. We and our trading partners always try to keep each others’ promises8. We and our trading partners have a similar understanding about the aims and objectives of the supply

chain9. We and our trading partners have a similar understanding about the importance of collaboration across

the supply chain10. We and our trading partners have a similar understanding about the importance of improvements that

benefit the supply chain

Information Sharing 1. We inform our trading partners in advance of changing needs2. Our trading partners share proprietary information with us3. Our trading partners share business knowledge of core business processes with us4. Our trading partners inform us in advance of changing needs5. We share proprietary information with our trading partners6. We share business knowledge of core business processes with our trading partners7. Our trading partners keep us fully informed about issues that affect our business8. We and our trading partners exchange information that helps the establishment of business planning9. We and our trading partners keep each other informed about events or changes that may affect the other

partners10. We share common information technology (software) to facilitate communication with our partners11. Information sharing on important issues has become a critical element to maintain our partnerships

Information Quality 1. Information exchange between our trading partners and us is timely2. Information exchange between our trading partners and us is accurate3. Information exchange between our trading partners and us is complete4. Information exchange between our trading partners and us is adequate5. Information exchange between our trading partners and us is reliable

Information Availability 1. Information regarding changes in supply is readily available within our supply chain2. Information regarding changes in demand is readily available within our supply chain3. Information regarding changes in product prices is readily available within our supply chain4. Information regarding company costs is readily available within our supply chain5. Information required to manage our company’s performance is readily available within our supply chain

(Continued)

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influencing the level of trust, it is better to minimiselevel of environmental uncertainty but exert extra effortson intraorganisational facilitators and interorganisationalrelationships. It is suggested that SCM partners shouldincrease the level of information sharing with high-qual-ity information and availability to reach higher levels oftrust. In this way, the level of trust will have positiveand significant impact on the commitment amongstSCM.

4. Discussions

The main objective of this study is to prove that commit-ment and trust are key success factors in achieving suc-cessful and lasting supply chain integration (Beckett andJones 2012). In this study, data were gathered from theTAITRA auto parts industry in Taiwan. These are essen-tial due to the size and nature of auto parts industryitself, where there is a very high dependence on manysuppliers and excellent supply chain performance. TAI-TRA members have well-established connections withvarious local and foreign organisations, especially as itssupply chain partners. This condition is ideal to beexamined as it deals with various suppliers and supplychain networks. Furthermore, Taiwan is also widelyknown for its expertise in manufacturing, in this case theauto parts industry. Studying Taiwanese supply chainactivities certainly becomes a valuable addition to thesupply chain trust and commitment literatures.

What is interesting here is that environmental uncer-tainty seems to have no significant effect towards infor-mation processing activities of sharing, quality andavailability, and this is contrary to some previous litera-ture saying that there is a significant effect. In fact,because environmental uncertainties bring about competi-tive pressures, this fact should encourage people to inten-sify their information process activities to compete forthe best suppliers in the industry and the best customersin the market (Wang 2001; Zhou and Benton 2007). Buton the other hand, in the stable environment conditions,information sharing, quality and availability also tend tobe higher since uncertainty does not occur. As a result,uncertainty is perceived as an unfavourable issue, andhence it can negatively affect the organisation and in thiscase it would have a direct effect on information flowswithin organisations and certainly for supply chain part-ners. Uncertainty environments within the supply chaincause confusion not only for the entire organisation, butalso for their partners. This in turn greatly affects infor-mation sharing, quality and availability. For instance,organisations tend not to share or reduce the informationavailability to its supplier partners (Duncan 1972;Lawrence and Lorsch 1967; Wong and Boon-itt 2008).As expected, we found organisations with high levels ofinformation sharing and good information quality andavailability are associated with low levels ofenvironmental uncertainty (Li and Lin 2006).Furthermore, this study particularly discovered that

Table 2. (Continued)

Variables Question items

Trust 1. Even when our partners give us a rather unlikely explanation, we are confident that they are telling thetruth

2. Our partners have often provided us with information that has later proven to be accurate3. Our partners usually keep the promises that they make to our firm4. Whenever our partners give us advice on our business operations, we know that they are sharing their

best judgement5. Our organisation can count on our partners to be sincere6. Though circumstance change, we believe that our partners will be ready and willing to offer us

assistance and support7. When making important decisions, our partners are concerned about our welfare8. When we share our problems with our partners, we know that they will respond with understanding9. In the future, we can count on our partners to consider how their decisions and actions will affect us10. When it comes to things that are important to us, we can depend on our partners’ support

Commitment 1. Even if we could, we would not drop our partners because we like being associated with them2. We want to remain a member of our partners’ network because we genuinely enjoy our relationship

with them3. Our positive feelings towards our partners are a major reason we continue working with them4. We expect our relationships with our partners to continue for a long time5. The renewal of our relationships with our partners is virtually automatic6. It is likely that our firm will still be doing business with our current partners in two years7. If our partner requested it, we would be willing to make further investment in the relationship8. We are willing to put more effort and investment in building our business in relation to our partners9. In the future, we will work to link our firm with our partners in the customers’ minds

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environmental uncertainty does not have a significanteffect on all three information attributes. This impliesthat, contrary to the expected effects, environmentaluncertainty may not be as strong as a driver as it is ini-tially thought of. In fact, environmental uncertainty maybe perceived as a threat to information sharing, informa-tion quality and information availability because theuncertainty makes the information less reliable for deci-sion-making purposes (Duncan 1972; Lawrence andLorsch 1967; Li and Lin 2006; Wong and Boon-itt2008). Additionally, managers may not give enoughattention to external considerations (Wong and Boon-itt2008), such as environmental uncertainties, compared tointernal ones, such as intraorganisational and interorgani-

sational factors. This can explain why for this research,environmental uncertainty has been found to be not sig-nificant in influencing all three information attributes,especially when compared to intraorganisational andinterorganisational considerations.

In organisations that have high levels of intraorgani-sational facilitators, they would likely to take more atten-tion on its development of IT and get support from topmanagement. Therefore, it would lead to high levels of‘information sharing’ in SCM alliances. With the supportboth from IT and top management, information sharingcan easily be established within the organisation andwith the supply chain partners. Such IT systems can bedeployed that integrate both organisations and supply

Table 3. SEM Path Analysis.

Relations Coefficients C.R.

Supply Chain Environmental uncertainty CUF 0.389 ATUF 0.397⁄⁄⁄ 9.735

Intraorganisational facilitators ITF 0.358 ATMSF 0.645⁄⁄⁄ 6.271

Interorganisational relationships SV9 from CSF 0.439 ATTPF 0.389⁄⁄⁄ 9.416

Information Sharing IS5 0.849 AIS6 0.883⁄⁄⁄ 4.233IS11 0.241⁄⁄⁄ 10.675

Information quality IQ4 0.931 AIQ5 0.952⁄⁄⁄ 3.465

Information availability IA1 0.903 4.785IA2 0.963 4.785

Trust TRU8 0.720 ATRU4 0.406⁄⁄⁄ 10.284TRU9 0.622⁄⁄⁄ 9.183

Commitment COM2 0.959 ACOM1 0.780⁄⁄⁄ 7.228COM4 0.143⁄ 10.753

EU<—>Relationship 0.249 3.895EU<—> Facilitators 0.139 3.495Relationship <—> Facilitators 0.242 4.389EU<—> IS (H1a) �0.577 �1.180 Not SupportedFacilitators —> IS (H2a) 1.008⁄ 2.138 SupportedRelationship —> IS (H3a) 0.099 0.744 SupportedEU<—> IQ (H1b) �4.234 �1.219 Not SupportedFacilitators —> IQ (H2b) 3.082 1.284 SupportedRelationship —> IQ (H3b) 1.160 1.216 SupportedEU<—> IA (H1c) �1.560⁄ �1.997 Not SupportedFacilitators —> IA (H2c) 1.224 1.798 SupportedRelationship —> IA (H3c) 0.478⁄ 2.057 SupportedIS — >TRUST (H4) 0.427⁄⁄⁄ 5.441 SupportedIQ — >TRUST (H5) 0.388⁄⁄⁄ 4.084 SupportedIA — >TRUST (H6) 0.151⁄ 1.823 SupportedTRUST — >Commitment (H7) 0.743 9.219 SupportedChi – Square 241.27 (p= 0.000)Degree of freedom (df) 136Chi-Square /df. 1.774GFI 0.908AGFI 0.872RMR 0.058

⁄C.R. > 1.96; using a significant level of 0.05, critical ratios that exceed 1.96 would be considered significant. 2. A: the parameter compared by othersis set as 1; therefore, there is on C.R. It is determined as significant. 3. The coefficients are standardised value.

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chain partners to share necessary information sharing(Fawcett et al. 2011; Li and Lin 2006). However, theaction is usually initiated by strong involvement of top

management in making the information sharing available.Without strong support of top management, it is not fea-sible to share good information. For that matter, top

Figure 2. SEM Model.

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management can dictate which kinds of information toshare and make available. This will also portray animage that top management cares and is concerned aboutwhat kind of information is being shared and madeavailable to the supply chain network, which will furtherencourage participation and cooperation with the supplychain. This top management support is regarded as prior-ity item in SCM relationships (Mentzer, Foggin, andGolicic 2000). The results of this research emphasise thiscrucial point, since intraorganisational facilitators werefound to be highly significant in influencing all threeinformation attributes.

On the other hand, interorganisational relationships,such as trust in trading partners, commitment and sharedvision, are supported by implementing SCM sharinginformation (Li and Lin 2006). An interorganisationalrelationship facilitates information availability. It isexpected that information will be shared and be madeavailable to all parties involved in that interorganisationalrelationship for the supply chain network to function.Otherwise, such relationships can lead to greater opera-tional inefficiencies, transaction risks and coordinationcosts due to lack of information availability (Clemonsand Row 1992). Trust, commitment and shared visionare very important in building relationship with tradingpartners. Indeed, a lack of trust can hamper these rela-tionships. Our results suggest the higher interorganisa-tional relationship is, the better the information sharing,and information quality and availability will be. Previousfindings suggest the organisations should enhance theirinformation sharing capabilities and improve informationquality and availability, especially in situations of lowlevel environmental uncertainties, high level intraorgani-sational facilitators of top management support, andhigh-level interorganisational relationships with tradingpartners (Li and Lin 2006).

The study also showed that there is a positive rela-tionship between the perceived level of information shar-ing, information quality and information availabilitybetween supply chain partners and the level of trust.Organisations need to rely on trust and commitment toreinforce and justify sharing information with their sup-ply chain partners. While information sharing is impor-tant, the significance of its impact on SCM is dependentupon how information meets the needs of organisations(Chizzo 1998). In other words, when organisationsimprove these information attributes, the actual informa-tion being shared and made available becomes more reli-able, hence increasing trust and commitment. Theseresults suggest, while all three variables are significantpredictors of the level of trust between supply chain part-ners, information sharing and information quality appearto exert stronger influence on trust compared to informa-tion availability. This means that if an organisation wantsto illicit trust and commitment from its supply chain net-

work, then it must display very good intentions andactual behaviour to share information and make suchinformation reliable (i.e. of high quality).

A positive relationship was also found between thelevel of trust and the level of commitment, consistentwith previous studies (Kwon and Suh 2005; Morgan andHunt 1994). Specifically, higher levels of trust wereshown to result in higher levels of commitment. Addi-tionally, a firm’s trust in supply chain partners is highlyand positively related to information sharing in SCM(Chu and Fang 2006). Furthermore, we found that trustdoes have a mediating effect between both informationsharing and information quality, and the level of commit-ment.

5. Conclusion

5.1. Limitations and direction of future research

The first limitation of this study is that the survey ques-tionnaire did not have sufficient items to explore therelationships between environmental uncertainty, intraor-ganisational facilitators and interorganisational relation-ships. The questionnaires reused items from previousstudies and did not devise the measurement dedicated forthis study. Hence, it may fail to depict issues unique toauto parts industry. Future research may consider devel-oping an appropriate questionnaire for this topic. Sec-ondly, the empirical validation for the informationsharing between trust-building and commitment frame-work is not well established, even though parts of theframework and parts of the relationship between vari-ables have been proven to be significant. The compre-hensive structural equation model (SEM) modelindicated that there are still some rooms for improve-ment. Nevertheless, the result of this study do providesignificant contributions to management academiciansand practitioners to evaluate the value of higher levels ofinformation sharing, information quality and informationavailability, and the higher levels of trust between supplychain partners. Furthermore, a positive relationship wasalso found between the level of trust and the level ofcommitment.

Third limitation came from the respondents whowere allocated into two major catalogues for raw materi-als suppliers and manufacturers in automobile industry.This probably could not reflect the overall picture of sup-ply chain alliances. Furthermore, we targeted top man-agement as our major samples for the research but weonly got about 41.2%, and the rest belongs to differentdepartments with lower ranks. Moreover, due to the lackof construct and measurement development regardinginformation availability in previous studies, it was diffi-cult to develop the questionnaire items for informationavailability. Therefore, we had to resort to interview sup-ply chain professionals for more insights regarding infor-

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mation availability. This presents further opportunities todevelop the construct and the correspondingmeasurement for this variable. Lastly, the data for thestudy consisted of responses from single respondent inthe organisation, which may be a case for possibleresponse bias. Further research should seem to utilisemultiple respondents from each participating organisationto improve the research findings.

5.2. Implication for managers and academicians

We showed that information sharing, information qualityand information availability each has a positive relation-ship with trust; trust in turn positively affects commit-ment. The higher and better these three informationattributes, the higher trust will be exhibited, which con-sequently will cause higher levels of commitment in sup-ply chain relationships. Also, the antecedents ofintraorganisational facilitators and interorganisationalrelationships are proven to affect these information attri-butes positively. However, this research also emphasisesthat environmental uncertainty within the supply chainneeds to be reduced in order to have higher informationsharing, information quality and information availability.But, based on the results of this study, managers shouldalso put more emphasis on managing their intraorganisa-tional and interorganisational considerations that areinvolved in SCM, simply because that these two areunder their control more than environmental uncertainty.

Since supply chain relationships are crucial for manyorganisations, managers have to find ways to improvetheir firm’s intraorganisational facilitators and interorgan-isational relationships. The managers must be capableenough to reduce the environment uncertainty in theirfirms so that the flow of information within the organisa-tion can be well established. By securing top manage-ment commitment and IT support from within theorganisation, and by ensuring trust and shared visionfrom the supply chain network, organisations can miti-gate the negative effects of environmental uncertainty.This in turn helps to maximise the benefits of goodinformation sharing, quality and availability. Trust and astrong commitment are indispensable for supply chainrelationship performance, especially in the face of envi-ronmental uncertainty. The relational bond between sup-pliers and firms is strongly formed within high levels oftrust and commitment. Managers should look for feasibleways to increase the levels of trust and commitment insupply chain partners. We highlight in this context thevalue of increasing active information sharing andimproving the quality of the information shared andmade available within organisations and with their sup-ply chain partners. Keeping supply chain partners “in theloop” encourages better and more frequent communica-tions, and hence further developing trust and commit-

ment. These frequent communications also enables theorganisation to provide better and higher quality informa-tion because they can know more about each others’preferences and decision-making styles. But for allintents and purposes, the reality is that it is a practicalproblem to disclose certain private or sensitive informa-tion to other firms. One solution is to develop well-estab-lished integrated SCM information systems to handle allof the information inflow or outflow from and to theorganisations. An integrated information system willensure standardised information that would furtherencourage trust and commitment since all the membersof the supply chain network know what they are doingbased on the similar, if not the same, information.

Additionally, the study is consistent with many previ-ous studies done. However, the SEM analysis and theframework of study can further extend the robustness ofmodels used in supply chain commitment research. As aconsequence, this study is not only can confirm theimportance of commitment in supply chain research, butcan also be a basic framework or foundation for thefuture supply chain research in this particular area.

Notes on contributorsJengchung V. Chen is Associate Professorat the Institute of International Managementat National Cheng Kung University,Taiwan. Since graduated from theUniversity of Hawaii in 2002, Dr. Chen hasover forty journal articles published oraccepted in the areas of Information Ethics,Electronic Commerce, Project Management,and IS Service Quality such as in

Information and Management, European Journal ofInformation Systems, Decision Support Systems, and Journal ofComputer Information Systems. His current research topics aretrust, privacy, Internet game addiction, and IS teamperformance.

Chen-Lin Wang graduated from theInstitute of International Management atNational Cheng Kung University withInternational MBA degree. She has beenworking in the industry for over eight yearsin the field of international procurement andsales. Her research interests are SupplyChain Management, Ecommerce, andProject Management.

David C. Yen is currently a Raymond E.Glos Professor in Business and a Professorof MIS of the Department of InformationSystems and Analytics at Miami University.Professor Yen is active in research and haspublished books and articles which haveappeared in Communications of the ACM,Decision Support Systems, Information &Management, Information Sciences,

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Computer Standards and Interfaces, Government InformationQuarterly, Information Society, Omega, International Journal ofOrganizational Computing and Electronic Commerce, andCommunications of AIS among others. Professor Yen’sresearch interests include data communications, electronic/mobile commerce, database, and systems analysis and design.

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