ABSTRACT: The basic premise of the extant literature related to electronic integration has been that the higher the integration, the higher will be the organizational performance. However, excessive electronic integration can be dysfunctional too. We make a conceptual argument that more is not always better and that the fit between contextual factors and electronic information sharing should be achieved to seek optimal channel performance. We empirically examine the fit between electronic information transfer (EIT) and contextual factors of a supply channel, our specific contribution being the assessment of fit in terms of multivariate congruence. The data required for this field study was collected from 124 managers/buyers responsible for supplier relationships in six multinational enterprises in two different industries (automobile and heavy shipbuilding) headquartered in Korea. The results ratify our hypothesis that multivariate congruence between EIT components and supply-channel contextual factors indeed exists. Follow-up drill-down analysis indicates that the monitoring component of EIT has a significant influence on demand uncertainty, and complexity-in-use is influenced by the coordination aspect of EIT. However, both the coordination and monitoring aspects of EIT are significantly relevant to interdependence of partners in a supply channel. A post hoc exploratory analysis suggests that the supply-channel performance is influenced by the fit between the contextual factors and the channel design factors. An inference of practical value that emerges from our findings is that more or less electronic integration is not the real issue. What is critical is the fit between supply-channel context and the level of electronic integration.
Key words and phrases: B2B procurement, electronic information transfer, empirical research, organizational information processing theory, supply chain management (SCM), survey methods