Investigating the Relationship between Inter-Organizational Systems Investment and Corporate Competitive Advantage: The Role of Supply Chain Dynamic Capability

Abstract

Many companies have developed strategies that include investing heavily in inter- organizational systems (IOS) in order to facilitate information sharing and sustain competitive advantage. These systems, treated as competitive weapons, are expected to provide great business value; however, many of them do not fulfill the expected promises. This study proposes that IOS can be a source of competitive advantage only when combined with supply chain dynamic capabilities (SDC). Built upon the process theory and the view of dynamic capabilities, the author defines two types of SDC－supply chain integration capability and supply chain coordination capability. Conducting linear regression analysis on data collected from managers in 145 companies in the personal computer (PC) industry in Taiwan, the author shows that SDC play a significant role in mediating the effects of IOS investments on the company's competitive advantage. Furthermore, supply chain coordination capability has a greater mediating effect than supply chain integration capability on the relationship between IOS investment and competitive advantage. Thus, these findings confirm the influence of SDC on IOS investment and show which SDC is of primary importance to create competitive advantage for companies.