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Electronic Integration and Business Network Redesign: a Roles-Linkage Perspective

Electronic integration--the use of information technology to reengineer key business processes and business relations--enables new forms of organization that transcend traditional industry and firm boundaries. Indeed, electronic integration strategies alter the fundamental structure of both firms as well as their environments, requiring a shift in the study of organizations from the level of a focal firm to that of the business network. The business network represents the pattern of interdependent relationships between the activities of a given firm and those of other firms in its competitive environment that influence each other's strategies.We analyze here the effects of electronic integration on organization structure and competitive processes at the level of the business network. We propose the roles-linkage perspective as a useful abstraction to characterize the business network and guide research on the effects of information technology on industry structures. Building and analyzing the effects of electronic filing on the tax preparation market, we build a preliminary model of how electronic integration strategies alter roles and linkages in a business network.The contributions of this article are a provisional theory of electronic integration at the level of the network, and an abstraction mechanism to characterize and study business networks.