| Vertical standards formalize and codify business processes and data formats developed for use in a single industry. Their importance lies in their ability to provide consistent descriptions for complex products and services, requiring less human intervention and bringing greater efficiency to automated electronic data exchanges. Additionally, the precision and flexibility of their semantic payloads embed meaning to transactional data, reducing transactional costs for organizations and magnifying their market reach. Understanding the factors that shape their assimilation will help organizations make the right technology choices, develop critical expertise needed to exploit them, and identify the products and services most likely to help them reach a position of competitive advantage.; The evaluation and deployment of vertical standards requires extensive know-how, sophisticated infrastructures, and high levels of industry coordination. Additionally, compatibility with existing applications and business processes, as well as uncertainty regarding the emergence of a dominant industry specification, make these complex networked technologies subject to interorganizational dependence and network effects. Due to these requirements and properties, in order to understand their assimilation at the organizational level the key factors shaping the adoption and deployment decision based on the internal environment at any individual firm must be combined with external effects generated by the aggregate behavior of community members.; This paper introduces an integrative, two-level model of organizational assimilation of vertical standards using four firm-level and two community-level antecedents. From a synthesis of classical innovation diffusion and organizational learning theories we identify knowledge barriers, complementary technology investment, prior technology drag, and benefits as key firm-level antecedents and drawing from the economic benefits of standards literature we identify standard legitimation and orphaning risks as key community-level antecedents. Our model also incorporates a carefully chosen set of factors that impact the six direct antecedents of vertical standards assimilation.; The model was tested with one of the leading cross-industry e-business standards-development organizations and the leading consortium for standards development in the insurance, reinsurance, and related financial services industries. Results show knowledge barriers, benefits, and standard legitimation are significant antecedents of vertical standards assimilation. Contrary to expectations, prior investment in legacy technologies was shown to be an enabler of assimilation, and there was empirical evidence for the importance of influential partner actions in our results.; Of practical application, the importance of knowledge barriers and activities aimed at reducing them was corroborated, as was the enabling role of technical infrastructure investment in the adoption and use of vertical standards options. This research contributes to our understanding of vertical standards assimilation by confirming the validity of integrating factors at both the firm and community levels, and provides the first large-scale empirical contribution towards the topic. |
