Translation to Inter-organizational Systems Integration: The Effect of Power and the Mediating Role of the Obligatory Passage Point

Abstract

IOS integration has become a competitive necessity in recent industrial environment. Thus, in the supply chain, dominant firms often try to exert their power to influence their dependent firms to implement IOS integration. However, whether power helps or hurts an integrated IOS implementation is still an unresolved issue. Mixed results on this issue from prior studies demand a further examination on such a context. Based on the circuits of power framework and the concept of obligatory passage point (OPP), this study identifies three factors that mediate the effect of power on the implementation of IOS integration, including competitive necessity, interestingness, and firm readiness. We accordingly develop a theoretical model with six hypotheses. Based on a sample of 134 manufacturing firms and PLS analysis, all hypotheses receive empirical support from the data. The findings suggest that the flows of exercised power and potential power into IOS integration can go through those mediators. Exercised power can promote competitive necessity that lead dependent firms to perceive greater interestingness and achieve higher firm readiness, resulting in a high level of IOS integration. Potential power supplements exercised power in facilitating interestingness and firm readiness. These two types of power also demonstrate different effects on those mediators. While exercised power has a greater impact on competitive necessity and no impact on interestingness, potential power produces an opposite result. This study therefore clarifies the effect of different types of power on IOS implementation. Theoretical and practical implications of the results are provided.

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