Value of Information Integration to Supply Chain Management: Roles of Internal and External Contingencies

Abstract

While integrating information flows between internal organizational functions and across partner firms is widely acknowledged as a contributor to organizational competitiveness, there is little empirical research on the effects of situational factors on the success of information integration. Based on contingency theory, we address the following question: Under what circumstances does information integration contribute to better performance outcomes in supply chain management (SCM)? Our results provide a contingency perspective of information integration, which highlights that the performance outcomes of information integration are contingent on both external environmental conditions and internal operational characteristics. We find that information integration improves firms' ability to perform, particularly when they operate under favorable environmental conditions—a highly munificent and a less uncertain environment—and when they offer durable and complex products. Our findings advance contingency research on the performance outcomes of information integration for SCM. Our study provides managers with empirical insights on the effects of information integration on the cost and customer-oriented operational performance of SCM under favorable and unfavorable environmental conditions.