Firms are increasingly using collaborative systems to enhance supply-chain visibility. A key emphasis of these interorganizational systems (IOS) is to improve the coordination between buyers and suppliers through electronic integration. While such IOS integration is purportedly good, because it tightens linkages in the supply chain, it is not clear whether it is the best configuration under all conditions. A review of literature on adoption and use of electronic data interchange (EDI) systems (a type of IOS) shows that this issue has been examined from multiple theoretic perspectives. Researchers have examined how contingencies related to technology, organization, and environment shape EDI use. Limited attention has been directed toward understanding how conditions under which transactions are conducted impact the use of IOS. We argue that transactional characteristics are important antecedents to IOS integration and propose that demand uncertainty, complexity, market fragmentation, and market volatility capture key characteristics. These factors coupled with an open information-sharing environment are hypothesized to influence IOS integration. Data collected from the electronics industry is used to examine the research model. Results show that firms tend to deploy integrated IOS when complexity of the component is high, market fragmentation is low, and an open information-sharing environment exists. Thus, from a managerial perspective, IOS integration is the appropriate configuration under conditions of high product complexity and open information-sharing environment, but it precludes the firm from participating in the open market and gaining brokerage benefits.
The advent of electronic commerce has induced many organizations to develop a Web presence and exploit the opportunities offered by the Internet. In an environment that commodities products and allows for easy imitative behavior through instant access to information on competitor's offerings, it is not clear how to build a sustainable competitive advantage. This study endeavors to facilitate an understanding of this complex issue. Electronic commerce competence is posited as a key driver of organizational performance, and it is argued that this effect is mediated by the generation of "customer value" through Web site functionality. By empirically analyzing primary and secondary data from over 100 companies, the relationship between electronic commerce competence, customer value, and both short- and long-term firm performance is examined. The results show that firms with high electronic commerce competence exhibit superior performance and that customer value generated through Web site functionality partially mediates this relationship. In addition, the results show that companies can enhance short-term performance by providing value to the customer in prepurchase situations. But in order to build customer loyalty and thus long-term performance, companies need to enhance the product ownership experience of customers.