The effects of IT infrastructure integration and flexibility on supply chain capabilities and organizational performance: An empirical study of the electronics industry in Taiwan

Abstract

In recent years, rapid development of information technology (IT) has forced companies to integrate tightly with their supply chain partners, enabling efficient information sharing between supply chain members and improving supply chain efficiency, in order to make their supply chain more flexible and efficient. IT therefore plays a critical role in supply chains. How to achieve higher organizational performance through IT in a complex and uncertain supply chain environment has become an important issue. Even though many practitioners and scholars have taken multiple points of view to investigate the effects of IT infrastructure capability on firms’ performance, little research has explored cause-and-effect relationships from the perspective of supply chain capabilities. Based on a resource-based view of the firm, this study develops a research framework for investigating the mediating role of supply chain capabilities in the relationships between IT infrastructure flexibility, integration, and firms’ performance. Data for the study were collected from 270 companies in the Taiwanese electronics industry and the relationships proposed in the framework were tested using the Partial Least Squares method. The results indicate that IT infrastructure integration and flexibility indirectly and positively impact organizational performance through the mediating effect of supply chain capability, and the mediating effect is a full mediation. The findings provide empirical support to resourced-based IT studies, which propose mediating IT impacts on organizational performance. This study should be useful to practitioners who implement IT strategy.