An assessment of EDI use and other channel communications on trading behavior and trading partner knowledge

Effective communication between trading partners is vital for operational efficiency and better trading relations. Such communication takes place at different managerial levels, using a variety of means, including Electronic Data Interchange (EDI). Interestingly, past studies report both positive and negative effects of EDI use in trading relations. Yet, missing from these studies is an analysis of the relationship between EDI use, the communication outside EDI, and their impact on trading relations. This study examines retailers and suppliers separately. It analyzes EDI use, trading partner communication frequency between top management and between operational management levels. The focus is on learning how such communications affect partner knowledge, cooperation, conflict, and joint decision making. Survey data from 99 retailers and 72 suppliers found that more partner knowledge by top management resulted in greater EDI use. For retailers, EDI use enhances partner knowledge of operational personnel but it reduces cooperation. For suppliers, in contrast, EDI use does not enhance partner knowledge but it does reduce conflict.