• Asia pacific journal of information systems
• /
• v.20 no.3
• /
• pp.139-166
• /
• 2010

The supply chain management (SCM) systems have emerged as strong managerial tools for manufacturing firms in enhancing competitive strength. Despite of large investments in the SCM systems, many companies are not fully realizing the promised benefits from the systems. A review of literature on adoption, implementation and success factor of IOS (inter-organization systems), EDI (electronic data interchange) systems, shows that this issue has been examined from multiple theoretic perspectives. And many researchers have attempted to identify the factors which influence the success of system implementation. However, the existing studies have two drawbacks in revealing the determinants of systems implementation success. First, previous researches raise questions as to the appropriateness of research subjects selected. Most SCM systems are operating in the form of private industrial networks, where the participants of the systems consist of two distinct groups: focus companies and vendors. The focus companies are the primary actors in developing and operating the systems, while vendors are passive participants which are connected to the system in order to supply raw materials and parts to the focus companies. Under the circumstance, there are three ways in selecting the research subjects; focus companies only, vendors only, or two parties grouped together. It is hard to find researches that use the focus companies exclusively as the subjects probably due to the insufficient sample size for statistic analysis. Most researches have been conducted using the data collected from both groups. We argue that the SCM success factors cannot be correctly indentified in this case. The focus companies and the vendors are in different positions in many areas regarding the system implementation: firm size, managerial resources, bargaining power, organizational maturity, and etc. There are no obvious reasons to believe that the success factors of the two groups are identical. Grouping the two groups also raises questions on measuring the system success. The benefits from utilizing the systems may not be commonly distributed to the two groups. One group's benefits might be realized at the expenses of the other group considering the situation where vendors participating in SCM systems are under continuous pressures from the focus companies with respect to prices, quality, and delivery time. Therefore, by combining the system outcomes of both groups we cannot measure the system benefits obtained by each group correctly. Second, the measures of system success adopted in the previous researches have shortcoming in measuring the SCM success. User satisfaction, system utilization, and user attitudes toward the systems are most commonly used success measures in the existing studies. These measures have been developed as proxy variables in the studies of decision support systems (DSS) where the contribution of the systems to the organization performance is very difficult to measure. Unlike the DSS, the SCM systems have more specific goals, such as cost saving, inventory reduction, quality improvement, rapid time, and higher customer service. We maintain that more specific measures can be developed instead of proxy variables in order to measure the system benefits correctly. The purpose of this study is to find the determinants of SCM systems success in the perspective of vendor companies. In developing the research model, we have focused on selecting the success factors appropriate for the vendors through reviewing past researches and on developing more accurate success measures. The variables can be classified into following: technological, organizational, and environmental factors on the basis of TOE (Technology-Organization-Environment) framework. The model consists of three independent variables (competition intensity, top management support, and information system maturity), one mediating variable (collaboration), one moderating variable (government support), and a dependent variable (system success). The systems success measures have been developed to reflect the operational benefits of the SCM systems; improvement in planning and analysis capabilities, faster throughput, cost reduction, task integration, and improved product and customer service. The model has been validated using the survey data collected from 122 vendors participating in the SCM systems in Korea. To test for mediation, one should estimate the hierarchical regression analysis on the collaboration. And moderating effect analysis should estimate the moderated multiple regression, examines the effect of the government support. The result shows that information system maturity and top management support are the most important determinants of SCM system success. Supply chain technologies that standardize data formats and enhance information sharing may be adopted by supply chain leader organization because of the influence of focal company in the private industrial networks in order to streamline transactions and improve inter-organization communication. Specially, the need to develop and sustain an information system maturity will provide the focus and purpose to successfully overcome information system obstacles and resistance to innovation diffusion within the supply chain network organization. The support of top management will help focus efforts toward the realization of inter-organizational benefits and lend credibility to functional managers responsible for its implementation. The active involvement, vision, and direction of high level executives provide the impetus needed to sustain the implementation of SCM. The quality of collaboration relationships also is positively related to outcome variable. Collaboration variable is found to have a mediation effect between on influencing factors and implementation success. Higher levels of inter-organizational collaboration behaviors such as shared planning and flexibility in coordinating activities were found to be strongly linked to the vendors trust in the supply chain network. Government support moderates the effect of the IS maturity, competitive intensity, top management support on collaboration and implementation success of SCM. In general, the vendor companies face substantially greater risks in SCM implementation than the larger companies do because of severe constraints on financial and human resources and limited education on SCM systems. Besides resources, Vendors generally lack computer experience and do not have sufficient internal SCM expertise. For these reasons, government supports may establish requirements for firms doing business with the government or provide incentives to adopt, implementation SCM or practices. Government support provides significant improvements in implementation success of SCM when IS maturity, competitive intensity, top management support and collaboration are low. The environmental characteristic of competition intensity has no direct effect on vendor perspective of SCM system success. But, vendors facing above average competition intensity will have a greater need for changing technology. This suggests that companies trying to implement SCM systems should set up compatible supply chain networks and a high-quality collaboration relationship for implementation and performance.

• Journal of Intelligence and Information Systems
• /
• v.20 no.4
• /
• pp.155-169
• /
• 2014

With the rapid advances in technologies, organizations are more likely to depend on information systems in their decision-making processes. Business Intelligence (BI) systems, in particular, have become a mainstay in dealing with complex problems in an organization, partly because a variety of advanced computational methods from statistics, machine learning, and artificial intelligence can be applied to solve business problems such as demand forecasting. In addition to the ability to analyze past and present trends, these predictive analytics capabilities provide huge value to an organization's ability to respond to change in markets, business risks, and customer trends. While the performance effects of BI system use in organization settings have been studied, it has been little discussed on the use of predictive analytics technologies embedded in BI systems for forecasting tasks. Thus, this study aims to find important factors that can help to take advantage of the benefits of advanced technologies of a BI system. More generally, a BI system can be viewed as an advisor, defined as the one that formulates judgments or recommends alternatives and communicates these to the person in the role of the judge, and the information generated by the BI system as advice that a decision maker (judge) can follow. Thus, we refer to the findings from the advice-giving and advice-taking literature, focusing on the role of explanations of the system in users' advice taking. It has been shown that advice discounting could occur when an advisor's reasoning or evidence justifying the advisor's decision is not available. However, the majority of current BI systems merely provide a number, which may influence decision makers in accepting the advice and inferring the quality of advice. We in this study explore the following key factors that can influence users' advice taking within the setting of a BI system: explanations on how the box-office grosses are predicted, types of advisor, i.e., system (data mining technique) or human-based business advice mechanisms such as prediction markets (aggregated human advice) and human advisors (individual human expert advice), users' evaluations of the provided advice, and individual differences in decision-makers. Each subject performs the following four tasks, by going through a series of display screens on the computer. First, given the information of the given movie such as director and genre, the subjects are asked to predict the opening weekend box office of the movie. Second, in light of the information generated by an advisor, the subjects are asked to adjust their original predictions, if they desire to do so. Third, they are asked to evaluate the value of the given information (e.g., perceived usefulness, trust, satisfaction). Lastly, a short survey is conducted to identify individual differences that may affect advice-taking. The results from the experiment show that subjects are more likely to follow system-generated advice than human advice when the advice is provided with an explanation. When the subjects as system users think the information provided by the system is useful, they are also more likely to take the advice. In addition, individual differences affect advice-taking. The subjects with more expertise on advisors or that tend to agree with others adjust their predictions, following the advice. On the other hand, the subjects with more knowledge on movies are less affected by the advice and their final decisions are close to their original predictions. The advances in predictive analytics of a BI system demonstrate a great potential to support increasingly complex business decisions. This study shows how the designs of a BI system can play a role in influencing users' acceptance of the system-generated advice, and the findings provide valuable insights on how to leverage the advanced predictive analytics of the BI system in an organization's forecasting practices.

• Journal of Global Scholars of Marketing Science
• /
• v.18 no.4
• /
• pp.61-118
• /
• 2008

The purpose of this research is to construct research framework for international franchising based on existing literature and to identify research components in the framework. Franchise can be defined as management styles that allow franchisee use various management assets of franchisor in order to make or sell product or service. It can be divided into product distribution franchise that is designed to sell products and business format franchise that is designed for running it as business whatever its form is. International franchising can be defined as a way of internationalization of franchisor to foreign country by providing its business format or package to franchisee of host country. International franchising is growing fast for last four decades but academic research on this is quite limited. Especially in Korea, research about international franchising is carried out on by case study format with single case or empirical study format with survey based on domestic franchise theory. Therefore, this paper tries to review existing literature on international franchising research, providing research framework, and then stimulating new research on this field. International franchising research components include motives and environmental factors for decision of expanding to international franchising, entrance modes and development plan for international franchising, contracts and management strategy of international franchising, and various performance measures from different perspectives. First, motives of international franchising are fee collection from franchisee. Also it provides easier way to expanding to foreign country. The other motives including increase total sales volume, occupying better strategic position, getting quality resources, and improving efficiency. Environmental factors that facilitating international franchising encompasses economic condition, trend, and legal or political factors in host and/or home countries. In addition, control power and risk management capability of franchisor plays critical role in successful franchising contract. Final decision to enter foreign country via franchising is determined by numerous factors like history, size, growth, competitiveness, management system, bonding capability, industry characteristics of franchisor. After deciding to enter into foreign country, franchisor needs to set entrance modes of international franchising. Within contractual mode, there are master franchising and area developing franchising, licensing, direct franchising, and joint venture. Theories about entrance mode selection contain concepts of efficiency, knowledge-based approach, competence-based approach, agent theory, and governance cost. The next step after entrance decision is operation strategy. Operation strategy starts with selecting a target city and a target country for franchising. In order to finding, screening targets, franchisor needs to collect information about candidates. Critical information includes brand patent, commercial laws, regulations, market conditions, country risk, and industry analysis. After selecting a target city in target country, franchisor needs to select franchisee, in other word, partner. The first important criteria for selecting partners are financial credibility and capability, possession of real estate. And cultural similarity and knowledge about franchisor and/or home country are also recognized as critical criteria. The most important element in operating strategy is legal document between franchisor and franchisee with home and host countries. Terms and conditions in legal documents give objective information about characteristics of franchising agreement for academic research. Legal documents have definitions of terminology, territory and exclusivity, agreement of term, initial fee, continuing fees, clearing currency, and rights about sub-franchising. Also, legal documents could have terms about softer elements like training program and operation manual. And harder elements like law competent court and terms of expiration. Next element in operating strategy is about product and service. Especially for business format franchising, product/service deliverable, benefit communicators, system identifiers (architectural features), and format facilitators are listed for product/service strategic elements. Another important decision on product/service is standardization vs. customization. The rationale behind standardization is cost reduction, efficiency, consistency, image congruence, brand awareness, and competitiveness on price. Also standardization enables large scale R&D and innovative change in management style. Another element in operating strategy is control management. The simple way to control franchise contract is relying on legal terms, contractual control system. There are other control systems, administrative control system and ethical control system. Contractual control system is a coercive source of power, but franchisor usually doesn't want to use legal power since it doesn't help to build up positive relationship. Instead, self-regulation is widely used. Administrative control system uses control mechanism from ordinary work relationship. Its main component is supporting activities to franchisee and communication method. For example, franchisor provides advertising, training, manual, and delivery, then franchisee follows franchisor's direction. Another component is building franchisor's brand power. The last research element is performance factor of international franchising. Performance elements can be divided into franchisor's performance and franchisee's performance. The conceptual performance measures of franchisor are simple but not easy to obtain objectively. They are profit, sale, cost, experience, and brand power. The performance measures of franchisee are mostly about benefits of host country. They contain small business development, promotion of employment, introduction of new business model, and level up technology status. There are indirect benefits, like increase of tax, refinement of corporate citizenship, regional economic clustering, and improvement of international balance. In addition to those, host country gets socio-cultural change other than economic effects. It includes demographic change, social trend, customer value change, social communication, and social globalization. Sometimes it is called as westernization or McDonaldization of society. In addition, the paper reviews on theories that have been frequently applied to international franchising research, such as agent theory, resource-based view, transaction cost theory, organizational learning theory, and international expansion theories. Resource based theory is used in strategic decision based on resources, like decision about entrance and cooperation depending on resources of franchisee and franchisor. Transaction cost theory can be applied in determination of mutual trust or satisfaction of franchising players. Agent theory tries to explain strategic decision for reducing problem caused by utilizing agent, for example research on control system in franchising agreements. Organizational Learning theory is relatively new in franchising research. It assumes organization tries to maximize performance and learning of organization. In addition, Internalization theory advocates strategic decision of direct investment for removing inefficiency of market transaction and is applied in research on terms of contract. And oligopolistic competition theory is used to explain various entry modes for international expansion. Competency theory support strategic decision of utilizing key competitive advantage. Furthermore, research methodologies including qualitative and quantitative methodologies are suggested for more rigorous international franchising research. Quantitative research needs more real data other than survey data which is usually respondent's judgment. In order to verify theory more rigorously, research based on real data is essential. However, real quantitative data is quite hard to get. The qualitative research other than single case study is also highly recommended. Since international franchising has limited number of applications, scientific research based on grounded theory and ethnography study can be used. Scientific case study is differentiated with single case study on its data collection method and analysis method. The key concept is triangulation in measurement, logical coding and comparison. Finally, it provides overall research direction for international franchising after summarizing research trend in Korea. International franchising research in Korea has two different types, one is for studying Korean franchisor going overseas and the other is for Korean franchisee of foreign franchisor. Among research on Korean franchisor, two common patterns are observed. First of all, they usually deal with success story of one franchisor. The other common pattern is that they focus on same industry and country. Therefore, international franchise research needs to extend their focus to broader subjects with scientific research methodology as well as development of new theory.