Gaining comparative advantage in supply chain relationships: the mediating role of market-oriented IT competence

Abstract

Trading partners continue to make significant investments in information technology (IT) infrastructure to facilitate the flow of market information across supply chains, yet the underlying mechanisms linking IT implementation to firm performance have not been clearly specified. Drawing on the resource-advantage theory of competition, we develop and test a model that proposes market-oriented IT competence as a mediator of the effects of a firm’s IT infrastructure on market information flow which, in turn, yields comparative advantages in supply chain relationships. Market-oriented IT competence is conceptualized as a firm’s ability to deploy an IT infrastructure in support of the organization-wide collection, dissemination and use of market information to respond to market needs. We test the effects of market-oriented IT competence using data collected from managers in the logistics services industry. Findings show that market-oriented IT competence is a critical link between IT infrastructure and comparative advantage in supply chain relationships.