The Impact of Information and Communication Technology on Interorganizational Coordination: Guidelines from Theory

Article excerpt


Organizations must continuously change due to ongoing changes in the environment (Donaldson, 1996). In trying to improve the performance of the organization, the focus has shifted over the past years from the organizational level towards the interorganizational level (Malone and Rockart, 1991; McGrath and Hollingshead, 1994). This growing interest in interorganizational relationships can be illustrated by several interrelated business trends (Bowersox and Closs, 1996), some of which are presented below.

* A first business trend is the use of information and communication technology (ICT) to decrease costs and increase capabilities (Malone and Crowston, 1994). Developments in ICT such as the World Wide Web, Electronic Data Interchange, and electronic mail can be seen as enablers to cross organizational boundaries more easily when dealing with information intensive processes. From the early efforts to support existing interorganizational processes (e.g. the exchange of documents between organizations), the focus has shifted to the emergence of new ways of doing business. Examples of this include the introduction of electronic trading markets, electronic auctions, and electronic bookstores. ICT has developed from a minor force supporting the interorganizational processes into a dominant force for shaping these processes.

* Outsourcing of secondary activities is another business trend (I&L, 1997). Organizations concentrate on their core business and specialize in main activities to reduce costs. This is a consequence of operating in a turbulent environment (Thompson, 1967). Turbulence consists of two components: instability and randomness (Huber and Daft, 1987). Instability refers to the frequency of change. Randomness refers to the unpredictability of both the frequency and direction of change.

* Globalization as a business trend has been realized by international trade agreements such as the European Union, the General Agreement on Tariffs and Trade (GATT), and the North American Free Trade Agreement (NAFTA). This has resulted in a worldwide market in which organizations must compete.

The business trends mentioned above indicate changes especially at the interorganizational level: increasing and changing communication between organizations, shifting organizational boundaries, and geographically expanding relationships between organizations. Although different in nature, the changes all affect the coordination between organizations (Vreede, 1995). Since a positive relationship exists between the range of benefits obtained from coordination and the level of ICT support (Venkatraman, 1994), guidelines need to be designed for new combinations of coordination and ICT at an interorganizational level. The focus of this paper is on interorganizational coordination structures, which will be elaborated on later in this paper. Several proven theories and technologies have been used to design these guidelines. To consistently review literature and come up with the guidelines, a framework has been used. The framework is presented in section 2. The framework consists of three perspectives, each of which will be discussed in a separate section (section 3, 4, and 5). By combining the notions on the three perspectives, guidelines are presented with which the impact of ICT on interorganizational coordination structures can be predicted (section 6). The paper ends with conclusions and recommendations for future research.

Research Framework

The impact of ICT on interorganizational coordination can not be defined easily, since coordination structures can not be prescribed but have to evolve over time. However, it is expected that some guidelines can be distilled from theory to predict the impact of ICT on interorganizational coordination structures. A framework has been used to consistently come up with the guidelines. The framework consists of three perspectives (Hengst, 1999). …