The Effect of Inter-Organization Trust and Dependency on E-Procurement Adoption

Abstract

Firms often have to integrate their daily business activities with supply chain partners, to remain competitive in today’s ever changing business environments. Information technology (IT) such as e-procurement has enabled firms to take advantage of the many benefits of integrating these business activities electronically. A review of the literature indicates that there is an apparent lack of research into the effects of trust and dependency on e-procurement adoption decisions, which is the key focus of this study. Through the use of survey questionnaire distributed to 834 manufacturers across different industries in Malaysia, this research seeks to investigate the impact of inter-organization trust and dependency on e-procurement adoption decisions. Findings revealed that dependency, interaction between trust and dependency, and size of company have a strong impact on the adoption decisions while trust has only a modest effect.