System Sourcing and Information Processing Capability in Supply Chains: A Study of Small Suppliers

Posted: 25 Jan 2014

See all articles by Liwen Hou

Liwen Hou

Shanghai Jiao Tong University (SJTU)

Ling Xue

Georgia State University

Son Bui

University of Memphis

William Kettinger

University of Memphis - Department of Management Information Systems

Date Written: January 22, 2014

Abstract

Although the adoption of inter-organizational systems (IOS) has been studied extensively in the existing literature, relatively little research attention has been paid to how small firms in supply chains are influenced by their larger partners in making their system sourcing decisions. In this study, we examine how small suppliers may choose their system sourcing approaches to better serve and collaborate with their large customers in supply chains. Our empirical findings suggest that information processing requirements and collaboration needs drive small suppliers to adopt more commercial off-the-shelf software package (i.e., external sourcing) to build their IOSs. Moreover, we find that small suppliers take such external sourcing as a way to achieve system effectiveness and enhance their information processing capabilities. The findings of this study generate important theoretical and managerial implications for IOS adoption and organizational information processing.

Keywords: System Sourcing, Inter-organizational Systems, Information Processing, Supply Chain Collaboration, Supply Chain Management, Small and Medium Enterprises (SMEs)

Suggested Citation

Hou, Liwen and Xue, Ling and Bui, Son and Kettinger, William, System Sourcing and Information Processing Capability in Supply Chains: A Study of Small Suppliers (January 22, 2014). Available at SSRN: https://ssrn.com/abstract=2383387

Liwen Hou

Shanghai Jiao Tong University (SJTU) ( email )

KoGuan Law School
Shanghai 200030, Shanghai 200052
China

Ling Xue (Contact Author)

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Son Bui

University of Memphis ( email )

Memphis, TN 38152-3370
United States

William Kettinger

University of Memphis - Department of Management Information Systems ( email )

3720 Alumni Ave
Memphis, TN 38152
United States

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