The 5th Annual International Business Research Forum The Temple University CIBER and The Irwin Gross eBusiness Institute at the Fox School of Business and Management

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The 5th Annual International Business Research
Forum The Temple University CIBER and The Irwin
Gross eBusiness Institute at the Fox School of
Business and Management
The Business Value of Digital Supply Networks A
Program of Research on the Impacts of
Globalization

• March 27, 2004
• Presenter Detmar Straub, Georgia State
  University

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AuthorsJonathan Wareham, Lars Mathiassen,
Arun Rai, Detmar Straub Georgia State
UniversityCIS Department
The Business Value of Digital Supply Networks A
Program of Research on the Impacts of
Globalization

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Agenda

• The Problem
• Information visibility (operational and
  strategic) in supply networks
• Lack of work on more complex networks (with
  appropriate measures)
• Literature
• Dyadic literature
• Game theory symmetries

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Agenda

• Methods
• Symmetry of information sharing, performance,
  mediating variables considered
• Snowballing
• Case Study of Global Network
• Contributions

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Agenda

• The Problem
• Information visibility (operational and
  strategic) in supply networks

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The Problem

• While the idea of sharing information such as
  forecasting data, inventory levels, and order
  status with business partners is not altogether
  unique, todays Web technology is helping to
  create tighter partnerships and greater overall
  value.
• (Stein, 1998)

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The Problem
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The Problem
Fragmented global digital networks
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The Problem
Bullwhip Effect
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The Problem
Network externalities Cultural barriers
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The Problem
Network externalities Cultural barriers
Control Variables
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Agenda

• The Problem
• Information visibility in supply networks
• Lack of work on more complex networks (with
  appropriate measures)

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Agenda

• Literature
• Dyadic literature

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Literature

• Dyadic Samples Will Not Generalize to Alternate
  Network Configurations
• Anderson et al. (1994)
• Iacobucci (1994)
• Levy Grewal (2000)
• Moller Wilson (1995)
• Hakansson Snehota (1995)
• Wilkinson (1991)

• Prior Empirical Work
• Lamming (1993)
• Seidman Sunarajan (1997)
• Lee et al. (1997)
• Rangan and Bell (1999)
• Malhotra et al. (2000)
• Mudambi et al. (2004)
• Kotabe et al. (2004)
• Straub et al. (2004)

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Information Sharing Supply Network Performance
- from Straub et al. (2004)
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Drawbacks in Literature

• Dyadic Samples Will Not Generalize to More
  Complex (k configuration) Networks
• Triadic configurations
• Quadradic configurations
• 5-nodal configurations
• Temple 101.xls
• Overall, k, varying from 3 to n configurations

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Drawbacks in Literature

• Dyadic Samples Will Not Generalize Well to More
  Complex Networks
• Proposition A network is different than the sum
  of its dyadic relationships.
• More difficult when one considers hopping of
  tiers and exchanges within a tier

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Drawbacks in Literature

• Chains versus Networks
• Chains are rigid, lock-step and linear processors
• Limited, sparse connections
• Networks are flexible, iterative, and parallel
  processors
• Density of connections is higher

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Supply Chain versus Supply Network
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Supply Chain versus Supply Network
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Agenda

• Literature
• Dyadic literature
• Game theory symmetries plus network externalities

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Game Theory Analysis

• Prisoners Dilemma (Deutsch, 1958)
• John Nashs Nobel prize

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Game Theory Analysis
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Game Theory Analysis
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Game Theory Analysis

• Cooperative game theory argues that all players
  can benefit from sharing information
• Some players could gain higher rents (at least in
  the short term) by being opportunistic and
  withholding information
• In the long term, the system benefits will be
  maximized with high levels of symmetric
  information sharing

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Example

• Relationship A
• Client shares 5 of 10
• Vendor shares 9 of 10
• Total 14 of 20
• Symmetry 0.556

• Relationship B
• Client shares 7 of 10
• Vendor share 7 of 10
• Total 14 of 20
• Symmetry is 1.0

• Relationship C
• Client shares 4 of 10
• Vendor shares 5 of 10
• Total 9 of 20
• Symmetry 0.8

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Agenda

• Methods
• Symmetry of information sharing, performance,
  mediating variables considered

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Dyadic Degree Symmetric Measures
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Degree Symmetric Measures
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Degree Symmetric Measures
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Degree Symmetric Measures
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Non Degree Symmetric Measures
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Methods

• Snowballing Technique Used for Sampling

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Testing the Model
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Agenda

• Case Study of Global Network

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Omnexus
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Omnexus

• Plastics Industry one of worlds largest
• 589 billion dollars in revenue
• Employs 1.5 million people
• BASF
• Bayer
• Dow
• Dupont
• Ticona/Celanese

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Agenda

• Contributions

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Contributions

• Move beyond Dyads
• Examine More Complex Networks
• Cooperative Game Theory Perspective Combined with
  Network Externalities
• Snowballing Technique
• Case Study of Global Network Demonstrating Main
  Concepts