Information Sharing in Supply Chain: the Role of Governance Mechanisms

One important reason behind deficient supply chain performance is poor coordination among the companies or organizations that make up the chain. Researchers emphasize that sharing of information is an effective coordination mechanism that can integrate the chain activities and improve overall chain profitability. However, sharing of information is risky as other partners in the chain may behave opportunistically, having gained access to private information. To reduce such risk and succeed in sharing information, firms in the chain need to agree on a set of governance mechanisms that will direct the chain relationship. Though previous research studies emphasize the need of governance mechanisms for information sharing among supply chain members, there is little or no research that has studied the role of governance mechanisms in supply chain information sharing. This research studies the role of three governance mechanisms of trust, bargaining power, and contract in information sharing among members of the supply chain.