Despite the importance to researchers, managers, and policy makers of how information technology (IT) contributes to organizational performance, there is uncertainty and debate about what we know and don’t know. A review of the literature reveals that studies examining the association between information technology and organizational performance are divergent in how they conceptualize key constructs and their interrelationships. We develop a model of IT business value based on the resource-based view of the firm that integrates the various strands of research into a single framework. We apply the integrative model to synthesize what is known about IT business value and guide future research by developing propositions and suggesting a research agenda. A principal finding is that IT is valuable, but the extent and dimensions are dependent upon internal and external factors, including complementary organizational resources of the firm and its trading partners, as well as the competitive and macro environment. Our analysis provides a blueprint to guide future research and facilitate knowledge accumulation and creation concerning the organizational performance impacts of information technology.

In this paper, we review and analyze the emerging network paradigm in organizational research. We begin with a conventional review of recent research organized around recognized research streams. Next, we analyze this research, developing a set of dimensions along which network studies vary, including direction of causality, levels of analysis, explanatory goals, and explanatory mechanisms. We use the latter two dimensions to construct a 2-by-2 table cross-classifying studies of network consequences into four canonical types: structural social capital, social access to resources, contagion, and environmental shaping. We note the rise in popularity of studies with a greater sense of agency than was traditional in network research.

Relational exchange arrangements supported by trust are commonly viewed as substitutes for complex contracts in interorganizational exchanges. Many argue that formal contracts actually undermine trust and thereby encourage the opportunistic behavior they are designed to discourage. In this paper, we develop and test an alternative perspective: that formal contracts and relational governance function as complements. Using data from a sample of information service exchanges, we find empirical support for this proposition of complementarity. Managers appear to couple their increasingly customized contracts with high levels of relational governance (and vice versa). Moreover, this interdependence underlies their ability to generate improvements in exchange performance. Our results concerning the determinants of these governance choices show their distinct origins, which further augments their complementarity in practice. Copyright © 2002 John Wiley & Sons, Ltd. Transaction cost economics (TCE) has emerged as a common framework for understanding how managers craft governance arrangements. The general proposition of this literature is that managers

Recent research suggests that people obtain useful knowledge from others with whom they work closely and frequently (i.e., strong ties). Yet there has been limited empirical work examining why this is so. Moreover, other research suggests that weak ties provide useful knowledge. To help integrate these multiple findings, we propose and test a model of two-party (dyadic) knowledge exchange, with strong support in each of the three companies surveyed. First, the link between strong ties and receipt of useful knowledge (as reported by the knowledge seeker) was mediated by competence- and benevolence-based trust. Second, once we controlled for these two trust dimensions, the structural benefit of weak ties became visible. This latter finding is consistent with prior research suggesting that weak ties provide access to non-redundant information. Third, we found that competence-based trust was especially important for the receipt of tacit knowledge. We discuss implications for theory and practice. 2

What explains differences in firms' abilities to acquire competitive capabilities? In this paper we propose that embeddedness, in terms of firms' network of bridging ties and linkages to regional institutions, are important sources of variation in firms' acquisition of competitive capabilities. We argue that firm networks rich in bridging ties and firms' participation in regional institutions are critical vehicles for accessing new information, ideas, and opportunities leading to the acquisition of competitive capabilities in geographical clusters. Hypotheses are tested on a stratified random sample of 227 job shop manufacturers located in several regions of the US Midwest using data gathered from a mailed questionnaire. Results from structural equation modeling broadly support the embeddedness hypotheses and suggest a number of novel insights about the link between firms' networks and competitive capabilities.

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This paper introduces the concept of netchain analysis. A netchain is a set of networks comprised of horizontal ties between firms within a particular industry or group, which are sequentially arranged based on vertical ties between firms in different layers. Netchain analysis interprets supply chain and network perspectives on inter-organizational collaboration with particular emphasis on the value creating and coordination mechanism sources. We posit that sources of value and coordination mechanisms correspond to particular and distinct types of interdependencies: pooled, sequential, and reciprocal. It is further argued that the recognition and accounting of these simultaneous interdependencies is crucial for a more advanced understanding of complex inter-organizational relations. The paper concludes with an analysis of a set of netchain configuration examples, including buyer-supplier relationships, information technology induced inter-organization collaborations, and the introduction of the “macrohierarchy” organization structure. Key words Network, supply chain, value chain, interdependence, cooperative strategy. 1 We thank the h elpful comments by two anonymous referees. All remaining errors and omissions are our own. 1.

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The tacit assumption that increased product modularity is associated with advantageous increases in organizational modularity underlies much of the literature on modularity. Previous empirical investigations of this assumption, few in number, have faced numerous confounding factors and generated conflicting results. I build a causal model for the relationship between product and organizational modularity, which I test using a distinctive empirical setting that controls for confounding factors present in previous studies. I find support for only part of the assumed relationship, showing that modularity is a more multi−faceted concept than previously recognized. In particular, increased product modularity enhances reconfigurability of organizations more quickly than it allows firms to move activities out of hierarchy. The paper contributes to the emerging stream of research that focuses on the previously under−appreciated costs of designing and maintaining a modular organization.

In this paper we investigate the relationship between supplier trust in the buyer and transaction costs and information sharing in a sample of 344 supplier-automaker exchange relationships in the U.S., Japan, and Korea. Our findings indicate that perceived trustworthiness reduces transaction costs and is correlated with greater information sharing in supplier-buyer relationships. Moreover, the findings suggest that the value created for transactors, in terms of lower transaction costs, may be substantial. In particular, we found that the least trusted automaker spent significantly more of its face-to-face interaction time with suppliers on contracting and haggling when compared to the most trusted automaker. This translated into procurement (transaction) costs that were five times higher for the least trusted automaker. Finally, we argue that trust is unique as a governance mechanism because it not only minimizes transaction costs, but also has a mutually causal relationship with information sharing which also creates value in the exchange relationship. Other governance mechanisms (e.g., contracts, financial hostages) are necessary costs incurred to prevent opportunistic behavior but do not create value beyond transaction cost minimization. Our findings provide empirical evidence that