INTERORGANIZATION NETWORKS, COMPUTER INTEGRATION, AND SHIFTS IN INTERDEPENDENCE - THE CASE OF THE SEMICONDUCTOR INDUSTRY
Inter-organization computer networks (IONs) provide significant opportunities for improving coordination between firms engaged in mutually dependent activities. A field study of the use and impact of IONs in the semiconductor industry is presented in this paper. Eighty-two interviews were conducted in twelve firms (seven semiconductor producers and five merchant mask shops) providing data on current as well as anticipated ION use. We found that greater efficiencies are possible when IONs are used as substitutes for conventional media. But more effective ION use is achievable when internal computer integration within participating firms is implemented. The implication of this otherwise straightforward observation is that firms using computer networks only as a substitute for conventional methods of exchange will not achieve the degree of inter-organization coordination IONs can support. However, while IONs improve coordination and reduce some production and transaction costs, they simultaneously increase certain costs associated with establishing and maintaining contracts with customers. These costs are new dependencies. Dependencies emerge from using IONs to access computer resources, and information generated by those resources, located in other firms. In this way IONs increase interorganization coordination and vulnerability simultaneously. The long term implication of ION adoption is that their use shifts the nature of interdependence between participating firms.
computer integration interorganization computer networks interorganization relationships