Value Creation Through Inter-Organizational Information Systems Capabilities

Management theory and firms’ operations have been changed significantly with the development of economic globalization and information technology. Firms are tending to networking by vertical integration and horizontal alliance. Strategy logic of value creation is transferring from competitive advantage to cooperative and synergetic advantage. Inter-organizational information systems (IOS), which combine the emerging information technology and communicating technology, provide the digital platform to support the inter-firm network. IOS could help firms deploy resources and capabilities crossing the firm boundaries, support the cooperative process and knowledge sharing, and play important roles in business networking. How to recognize the value of IOS, or how to It is crucial for information systems theory and practice to recognize the value of IOS, and to figure out how IOS play the enabling and facilitating roles to gain sustainable strategic advantage in business network. Studies on this topic are still limited in current. There is a gap between IOS value creation theory and IOS application practice.What are IOS capabilities? How to build IOS capabilities? How do IOS play the enabling and facilitating roles? What is the path from IOS to strategic advantage? These key issues will be addressed in this dissertation. We build the theory model of IOS capabilities value creation, propose the research hypotheses, test and verify our theory empirically using the survey data from firms in China. Our studies try to explain the building mechanism, enabling mechanism and value creation path of IOS systematically.(1) Construct the concept of IOS capabilities. We define IOS capabilities as firms leverage, coordinate and reconfiguration IOS resources to support inter-firm process, and deliver businesses and services between firms effectively. In this paper, IOS capabilities are constructed as IOS integration and IOS reconfiguration. Integration capabilities emphasize the streamline of data or applications between firms and their business partners. Reconfiguration capabilities highlight respond to market change timely and economically. Value creation mechanism is studied based on the constructs of IOS capabilities.(2) Study the building process of IOS capabilities. This paper analyzes the determinant and driving factors of IOS capabilities building, and builds the theory model based on IOS resources and cooperative business model. The cooperative business model is classified as exploitative pattern and explorative pattern according to the organizational learning theory. The evolution of IOS capabilities is explained by inter-organizational learning. Empirical analyses using a sample of 213 Chinese firms find that:IOS resources are the determinant factors of IOS capabilities; the alignment between cooperative business model and IOS resources drive the IOS capabilities formation; deferent business model has deferent direct and moderate effects on IOS capabilities. IOS capabilities are inherited with high-order capabilities’ attributes of path dependence, implicit knowledge and causal ambiguity, which reveals the strategic nature of IOS capabilities.(3) Study the application process of IOS capabilities. In this paper, we propose that the application process of IOS capabilities concentrate on their effects on interfirm process, and is moderated by firm network embeddedness. Interfirm process is the task set connecting firms and their business partners to accomplish a specific function. Interfirm processes achieves balance between process alignment and process flexibility as process ambidexterity. Hierarchical regression analyses of the survey data from 213 Chinese firms find that:the interaction of process alignment and process flexibility has positive effect on cooperative performance; IOS capabilities have positive effect on inter-firm process significantly; network embeddedness moderates IOS capabilities application process, the effect of IOS capabilities on process flexibility is weakened when the network embeddedness is high. We discuss the embeddedness paradox in business networking.(4) Study the value creation path of IOS capabilities. We build the IOS capabilities value creation model based on the process view of IT value creation. The value creation path is from IOS resources to IOS capabilities, then to the inter-firm processes and cooperative performance. Using the sample of 213 Chinese firms, the path coefficient in our IOS capabilities value creation model is analyzed by partial least squares method, the mediation-moderation effects of cooperative business model and network embeddedness are also analyzed in the path analysis. The path of IOS capabilities value creation is tested and verified in this research, which reveal the mechanism of how firms apply IOS to gain strategic advantage in business networking.