Investigating Organizational Transformation in Automotive Supply Chains: A Case Study on B2B and Extranet

• Published date: 01 May 2016
• Date: 01 May 2016
• DOI: http://doi.org/10.1002/jsc.2062
• Author: Ozlem Bak

RESEARCH ARTICLE

Strat. Change 25: 299–314 (2016)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2062

Copyright © 2016 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2062

Investigating Organizational Transformation in

Automotive Supply Chains: A Case Study on B2B

and Extranet1

Ozlem Bak

Business School, University of Hudderseld, UK

Success and failure of e‐business‐enabled transformation in the automotive supply

chains can depend on the individual e‐business application and show variations in

the same organization.

E‐business impact in supply chains can vary depending on the context of organiza-

tions and industries. e use of e‐business applications is associated with cost

savings, increased performance, and collaboration in supply chains (Nyaga et al.,

2010; Wiengarten et al., 2010). e e‐business technologies are prevalent in the

automotive industry (Ireland, 1999; Bagchi and Skjott‐Larsen, 2005; Wiengarten

et al., 2010). For example, the automotive manufacturer BMW spent $55 million

on its Europe‐wide online procurement system and achieved a decrease in order

delivery time of 20 days on average (Holweg and Pil, 2001). e cost savings

achieved through the use of the e‐business applications in the automotive industry

may not be surprising considering the complexity and amount of product data

exchange taking place, as many as 453,000 each year (Brunnemeier and Martin,

2002). Holweg and Miemczyk (2003) noted that if cars were built to order, cost

savings could amount to US$500–$1,500 per car. In an industry where prots

are increasingly coming under pressure to maturity of the margins and nancial

restraints (Doherty and Locke, 2001), the use of e‐business applications seems to

be of interest to companies. However, using e‐business applications in the automo-

tive industry is not without challenges. Over the years, despite technological

enhancements, the challenges organizations faced remained almost identical.

Similar questions arose about how organizations should analyze the transforma-

tional impact of e‐business applications (Fahey et al., 2001), as well as to what

extent e‐business applications aected the organizations (Gale and Abraham,

2005) and how to assess such transformation (Abraham and Junglas, 2011). It is

interesting that there are only a few systematic studies on e‐business applications,

assessing the impact upon supply chains and their transformation. Taylor and

1 J.E.L. classication codes: M10, O32, O33, L62.

Top‐level management needs to

assess the transformation and the

challenges involved within their

supply‐chain context.

Organizations are advised to

assess the additional workload for

their employees who may not all

possess the skills and

competencies required; hence,

there may be a need for internal

and external consultants.

Organizations need to evaluate

eight dimensions of

transformation before embarking

on the transformation journey.

300 Ozlem Bak

Copyright © 2016 John Wiley & Sons, Ltd. Strategic Change

DOI: 10.1002/jsc

Taylor (2009) also emphasized the lack of organizational

context, with a particular emphasis on ‘information tech-

nology’ and ‘organizational theory’ (Van Donk, 2007,

Banker et al., 2006; Heim and Peng, 2010). However,

Taylor and Taylor (2009, p. 1325) described this limita-

tion in the eld as an opportunity for operations manage-

ment researchers who ‘[can] draw upon relevant theories

from adjacent disciplines such as Organisational Studies

and Information Systems, not simply to oer alternative

insights but to enrich and even challenge the underlying

philosophical assumptions.’

One of the earliest research projects investigating the

impact of e‐business applications, conducted by Lancioni

et al. (2000), involved 181 respondents from a diverse

range of industries, whereby the researchers highlighted the

diverse use of e‐business applications. Another study inves-

tigated multinational companies and their subsidiaries

regarding the impact of information technologies

(Mohdzain and Ward, 2007); Finnegan and Longaigh

(2002) looked at operational and environmental factors

aecting the information systems–related decisions. Most

of the studies investigating e-business technologies in

supply chains were either focused on a particular technol-

ogy or included cross industry comparison rather than

focusing on a specic industry undergoing the transforma-

tion. McCormack and Lockamy (2001) and Lancioni et al.

(2000) agreed that an industry‐specic comparison would

be of particular interest to determine industry‐specic

implications of e‐business applications. Research in the area

of transformation mainly concentrated on the content‐spe-

cic questions ‘why and when organizations transformed,’

‘to which extent they transformed,’ and ‘whether transfor-

mation has been benecial at all for the organizations.’

Hence, the following observations are identied: (1) most

of the studies focus on the impact of stand‐alone applica-

tions on supply chains, (2) studies on organizational

transfo rmation within supply chains are limited in their

multidisciplinary eort, and (3) it is still unclear whether

what the supply chains are experiencing through the e‐busi-

ness technologies can be considered as organizational

transformation. e following section will explore the orga-

nizational transformation context and identify eight struc-

turing themes of transformation, followed by the

introduction of the case study and ndings.

Organizational transformation

In the literature, organizational transformation is analogous

to second‐order change (Levy, 1986), second‐generation

organizational development (Porras and Silvers, 1991),

and strategic change (Dunphy and Griths, 1998).

Similar to Cady and Hardalupas (1999), in this study

the term ‘transformation’ will be used, which describes a

shift in the supply chain from its ‘old state of things to

the new state of things’ (French and Bell, 1999, p. 2)

necessitating deep, broad, and fundamental change in

operational paradigms and practices in the organization

(Blumenthal and Haspeslagh, 2002; Vollmann, 1996;

Beers, 1997; Cady and Hardalupas, 1999). Transforma-

tion is not just about changing the company through

business process reengineering or reducing the cost; it is

also about introduction of new ideas and beliefs that drive

the organization (Prahalad & Oosterveld, 1999). Trans-

formation can empirically be observed as a dierence in

form, quality, or state over time within the organizations.

In trying to understand the transformation, Rockart and

Scott‐Morton (1984) drew attention to the interlinkage

between strategy, processes, individuals’ roles, and organi-

zational culture in understanding transformation. Later in

1991, Scott‐Morton included a parallel notion that orga-

nizations balance four elements: tasks, structure, people,

and technology. Similarly, ve years later, Vollmann et al.

(1996), while discussing the transformative imperative

with academics and industry, extended transformation

around eight structuring themes: strategic intent, compe-

tencies, processes, resources, output, strategic response,

challenges, and learning capacity (Vollmann, 1996; Far-

hoomand and Wigand, 2003). e structuring themes

were an organic follow‐up from the elements mentioned

earlier, but extended with new themes such as challenges,