Week6_Chatterjee and Ravichanran (2013)_Ada

Governance of Inter-organizational Information Systems:

A Resource Dependence Perspective

 Motivation:

Though IOS generated benefits have received much attention, less research has been directed toward understanding the reasons for the successes and failures of these systems. As decisions related to IOS ownership and control have always been crucial for the viability and survival of these systems, it is important to examine the factors that influence IOS ownership and control decisions.

Research Questions:

In this paper they investigated why and how firms seek ownership and control of IOS, which they labeled as IOS governance choices. Specifically, the research questions are:

• How do resource criticality and replaceability affect the financial and transactional IOS mediating by operational integration?
• How technological uncertainty moderate the impact of resource criticality and replaceability on the financial and transactional IOS?

  Main Results:

• Resource criticality increased the need for IOS governance by positively affecting operational integration, while resource replaceability diminished the need for IOS governance by negatively impacting operational integration.
• Technological uncertainty negatively impacted the need for IOS governance by attenuating the positive effect of resource criticality on operational integration. However, results indicate that technological uncertainty failed to enhance the negative effect of resource replaceability on operational integration and hence failed to weaken the need for IOS governance as hypothesized.

Resource Dependence Theory:

Resource dependence theory (RDT) is the study of how the external resources of organizations affect the behavior of the organization. Resource dependence theory has implications regarding the optimal divisional structure of organizations, recruitment of board members and employees, production strategies, contract structure, external organizational links, and many other aspects of organizational strategy.

The basic argument of resource dependence theory can be summarized as follows:

• Organizations depend on resources.
• These resources ultimately originate from an organization’s environment.
• The environment, to a considerable extent, contains other organizations.
• The resources one organization needs are thus often in the hand of other organizations.
• Resources are a basis of power.
• Legally independent organizations can therefore depend on each other.
• Power and resource dependence are directly linked: Organization A’s power over organization B is equal to organization B’s dependence on organization A’s resources.

• Power is thus relational, situational and potentially mutual.