Inter-Organizational System Integration: Introducing Compromise as a Key Construct for Manufacturing Firms and Their Suppliers

Manufacturing firms have increasingly relied on inter-organizational systems (IOS) to facilitate inter-firm transactions and integration with suppliers. However, they frequently face various impediments, such as adversarial behaviours and misalignments, when trying to integrate with IOS (i.e., IOS integration or IT/IS integration). Based on the perspectives of mutual adaptation of technology and organization and socio-technical systems, this study develops two compromise constructs critical for IOS integration: inter-firm process compromise and technology compromise. These two compromise constructs, treated as neutral alignment, are proposed to affect the achievement of higher IOS integration. Based on 146 matched-pair samples, the findings demonstrate the importance of technology and inter-firm process compromises in achieving greater IOS integration, which, in turn, enables higher inter-firm dependence and operational performance. This research provides theoretical and practical implications that contribute to our understanding of the role of compromise in facilitating IOS integration. The implications should serve as an important basis for future research in examining IOS integration.