Interorganizational information systems and the structure and climate of seller-buyer relationships

A model was developed to show the association between specialized investments in an Interorganizational System (IOIS) and the structure and climate of the relationship between the participating organizations. Four hypotheses were proposed: In a seller-buyer relationship, specialized IOIS investments are associated with: 1) decreased control over decision making for the firm making the specialized investments; 2) increased formalization of transactions; 3) increased vertical interactions; and 4) under certain conditions, a more positive transactional climate. Structural Equation Modelling (SEM) techniques were used to test the model. Data was collected through a questionnaire survey of independent agencies in the property and casualty insurance industry. The findings suggested that the first and second hypotheses were not supported, whereas the third and fourth hypotheses received considerable support.