A set of measures was selected to achieve a multidimensional representation of inter firm relationships-communication, information technology/EDI, partnering, and performance measurement. The items chosen were based upon measures validated in past research. Each multi item variable was constructed as a mean score of individual scale measures.
For most variables, the mean value agreed closely with the median, which suggests that skewness was low. Means for most predictor variable scales and independent performance measures were below the neutral value (4), which indicates that most respondents scored high on the relational traits and performance measures. Significantly, the mean for information technology/EDI was above 4.0, which indicates that, on average, most respondent firms do not frequently communicate demand, product availability, and shipment data to their customers via EDL Of the performance variables, only decreased transportation and warehousing cost had means greater than 4.0, that is, respondents disagreed with statements related to their firms achievement of transportation and warehousing cost decreases. Significant and positive beta coefficients, as well as highly significant fit statistics and explained variance (ranging from 17.6% to 28.7%), were found for the hypothesized relationships between relational dimensions and decreased inventory levels, decreased order cycle time, and decreased order cycle variance. Information technology/EDI had significant explanatory power in each of these three models, while performance monitoring was a significant predictor variable and had the largest standardized beta weight for both decreased order cycle time and variance. Communication was significant only for decreased inventory levels and partnering only for decreased order cycle time.
Analysis also supported four of the seven hypotheses linking inter firm relationships and relative performance measures. Significant and positive beta coefficients, as well as highly significant fit statistics and explained variance (ranging from 13.8% to 27.2%), were found for the hypothesized relationships between relational dimensions and flexibility in meeting customer needs, assessment of customer needs, customer satisfaction, and product availability. Performance monitoring had significant explanatory power for three of the firms relative performance measures-product availability, customer satisfaction, and assessment of customer need. Communication was significant for flexibility and assessment of customer need, while partnering was significant only for customer satisfaction and information technology/EDI only for flexibility.