Enabling interorganizational system integration: The compromise perspective

Firms have been increasingly using inter-organizational systems (IOS) to enhance transaction efficiency. IOS integration thus has become critical in facilitating tighter integration between trading partners. Firms, however, still face various difficulties that impede the implementation of IOS integration, such as potential adversarial behaviors and conflicts. Thus, exploring how to effectively promote IOS integration is significant for both theory development and practice. This study applies the concept of compromise and develops interfirm process compromise and technology compromise based on the relational view. These two compromise constructs, as relational preconditions, are proposed to affect the achievement of better IOS integration. The results of this study support the hypothesized direct effect of technology compromise on IOS integration based on 44 matched-pair samples gathered from the top 1000 Taiwanese manufacturing firms. We also propose and show the indirect effect of interfirm process compromise on IOS integration, mediated by technology compromise. Our results provide the theoretical and practical implications that contribute a better understanding of the role of compromises in developing IOS integration. The model and findings of this study should be able to serve as a basis for future research in examining IOS integration.