...processes that enable rich (broad-ranging, high quality, privileged) information sharing, and (2) building information technology infrastructures that allow them to process information obtained from their partners to create new knowledge. This study uncovers and examines the variety of supply chain partnership configurations that exist based on differences in capability platforms, reflecting varying processes and information systems. We use the absorptive capacity lens to build a conceptual framework that links these configurations with partner-enabled market knowledge creation. Absorptive capacity refers to the set of organizational routines and processes by which organizations acquire, assimilate, transform, and exploit knowledge to produce dynamic organizational capabilities.

Through an exploratory field study conducted in the context of the RosettaNet consortium effort in the IT industry supply chain, we use cluster analysis to uncover and characterize five supply chain partnership configurations (collectors, connectors, crunchers, coercers, and collaborators). We compare their partner-enabled knowledge creation and operational efficiency, as well as the shortcomings in their capability platforms and the nature of information exchange. Through the characterization of each of the configurations, we are able to derive research propositions focused on enterprise absorptive capacity elements. These propositions provide insight into how partner-enabled market knowledge creation and operational efficiency can be affected, and highlight the interconnected roles of coordination information and rich information. The paper concludes by drawing implications for research and practice from the uncovering of these configurations and the resultant research propositions. It also highlights fertile opportunities for advances in research on knowledge management through the study of supply chain contexts and other interorganizational partnering arrangements.

Keywords: Knowledge management, supply chain, absorptive capacity, interorganizational information systems, configuration approaches, rich information, process modularity

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"We would like to understand the dynamics of the marketplace on a real-time basis with the help of our supply chain partners. To know who's playing what role in providing value to the customer and what is the way business will be done tomorrow" --An Executive at a major computer manufacturer

Introduction

The above quote from an Information Technology industry executive provides a glimpse of the motivation for knowledge sharing efforts underway in supply chains. There is increased focus on the integration of knowledge resources and on knowledge creation in collaboration with partners for longer-term advantage (Majchrzak et al. 2000; Malhotra et al. 2001). Supply chain relationships are going beyond operational efficiency and are being structured to pursue higher-order goals such as understanding new market dynamics, discovering new partnering arrangements to provide greater customer value, and learning from partners to achieve long-term competitiveness (Eisenhardt and Schoonhoven 1996). Knowledge management is poised to become a critical imperative in supply chain interactions.

Interorganizational relationships have been recognized to provide two distinct potential benefits: short-term operational efficiency and longer-term new knowledge creation (Clark 1989; Dyer 1997; Sobrero and Roberts 2001). Past research has examined interorganizational relationships as a source of long-term learning in the context of research and development joint ventures (Inkpen and Dinur 1998; Lane and Lubatkin 1998), in consortia (Tripsas et al. 1995), and in alliances (Hamel 1991; Roberts and Berry 1985). Research studies have tended to focus either on the supporting technology or the relational aspect in generating insights for improving the effectiveness of IT-supported interorganizational partnerships. The former stream has explored automated IT-based information exchange systems that are deployed between business partners (Bensaou 1997; Choudhury 1997) and studied inhibitors and promoters of adoption of technologies such as electronic data interchange (EDI) (Hart and Saunders 1998). The latter stream has explored relational and governance-related aspects of interorganizational partnerships (Bensaou and Venkatraman 1995; Subramani 2004). Both streams have largely focused on transactional improvements rather than more strategic market knowledge outcomes. Furthermore, our literature search has not shown studies where strategic knowledge creation is linked to patterns of interorganizational activities. We seek to pursue this research opportunity by focusing on the understudied context of new knowledge creation among enterprises in a supply chain (i.e., manufacturers, distributors, and retailers) engaged in day-to-day operations around routine processes such as order management.

While earlier studies have studied interorganizational relationships being configured to make a trade-off, maximizing either operational efficiency or strategic knowledge creation (e.g., Sobrero and Roberts 2001), we seek to uncover partnership configurations that can achieve both objectives simultaneously. A supply chain partnership configuration refers to the specific patterns of IT usage, information processing, and process structuring characteristics of a focal enterprise related to its boundary activities interfacing with another enterprise in the supply chain. This study seeks to provide a foundation for theory building that links knowledge creation in supply chains to information systems and business process infrastructures that support effective interorganizational partnerships. We adopt a broader perspective that considers complementarities between internal information processing and externally directed information sharing systems, as well as complementarities between IT infrastructure and business process design.

This study is intended to be exploratory in nature. Our objectives are to understand evolving supply chain partnerships and to help generate theory to inform efforts to better support these partnerships. In the next section, we examine previous work on interorganizational systems and supply chain partnerships. We develop theoretical foundations and research constructs around the concepts of absorptive capacity to inform our exploration. This is followed by an explanation of our research methodology and field context. We then use cluster analysis to uncover and describe the key supply chain partnership configurations. We develop propositions around the nature of information exchange and process management infrastructures in each of these clusters and the consequent impact on operational efficiency and new knowledge creation potential for enterprises in each type of cluster. Finally, we discuss the implications for research and practice in the area of partner-enabled knowledge creation in supply chains.

Theory Development

Earlier Research on Interorganizational Systems

The dramatic reduction in electronic communication costs and ease of computer-to-computer linkages has resulted in opportunities to create new channel structures, fueling interest in interorganizational systems (Clemons et al. 1992; Malone and Rockart 1993; Scott Morton 1991). Interorganizational systems (IOSs) are planned and managed ventures to develop and use IT-based and/or human-based information exchange systems to support collaboration and strategic alliances between otherwise independent actors (Kumar and van Dissel 1996). These systems are motivated by the desire to reduce supply chain uncertainty and transaction costs (Konsynski 1993; Kumar and Crook 1999), increase resource utilization (Clemons et al. 1992), and diffuse products and services into new markets (Kumar and van Dissel 1996). IOSs allow for the exchange of information between partners for the purpose of coordination, communication, and cooperation (Premkumar 2000). Thus, IOSs have the potential to increase operational efficiency through the reduction of production and coordination costs. In addition, IOSs can also increase information availability and processing capabilities (Premkumar 2000).

Studies of IOS have contributed to the identification of archetypical configurations for better understanding interorganizational systems and relationships. Table 1 presents a synopsis of three studies of IOS that have proposed such typologies. Each of these studies raised important issues, which, when combined with insights gained during our initial fieldwork, motivated this study.

The Kumar and van Dissel (1996) study raises the issue: Can enterprises in a relationship deploy hybrid IOSs that are a mix of elements of the value/supply chain IOS and networked IOS? If this is possible, then what are the different configurations that emerge from various combinations of these elements? Choudhury's (1997) study provides anecdotal evidence which suggests that electronic monopolies can result when partners exchange rich information. His study leads to the question: How is the knowledge-creating potential of firms involved in the electronic monopoly configuration affected by rich information exchange, and is such an exchange possible in other configurations? Bensaou and Venkatraman's (1995) study suggests that enterprises in industries faced with a highly uncertain and complex environment have high information processing needs. They found that two partnership configurations--electronic interdependence and mutual adjustment (Table 1)--helped enterprises cope with such environments. Hence, the majority of the supply chain enterprises in the IT industry (the context of this study) should also be expected to engage in either electronic interdependence or mutual adjustment partnership configurations. However, in our initial fieldwork, we observed a variety of partnership configurations with different characteristics. This raises the question: Are enterprises organizing their supply chain partnerships for higher order learning goals that are not reflected in the "information processing to reduce uncertainty" perspective?

When discussing various partnership configurations, Bensaou and Venkatraman (1995) suggest that rich information exchange between partners is influenced by the choice of mechanisms used to structure their relationship. Further, rich information exchange potentially impacts the operational performance of the partnership. Specifically, they focus on the breadth and frequency dimensions of rich information exchange. These two dimensions may be sufficient to understand operational performance impact, but in order to understand the corresponding impact on knowledge creation more dimensions of richness need to be explicitly addressed.

Earlier Research on Structuring Supply Chain Processes

The IOS studies have also addressed issues pertaining to the structuring of supply chain processes. Kumar and van Dissel (1996) hint at the structuring of interorganizational relationships, such that work is divided between partnering organizations by assigning them specific roles, and coordination between them is embedded in standard and well-specified protocols. Bensaou and Venkatraman (1995) also refer to the structuring of interorganizational processes in a way that creates mutual interdependence. Thus, partners engaged in structural relationships break supply chain activities into manageable and well-understood steps and procedures. This raises the question: What is the impact of modular process design on richness of information exchange and consequently on knowledge creation?

Studies of process structuring standards and operational efficiency in supply chains also provide some groundwork for this study. Information sharing in supply chains is considered a major obstacle to achieving operational efficiency (Lee et al. 1997). Research on dynamic supply chains shows that enterprises in supply chains adapt to their environment and adopt innovations by exploiting the complementarities between process design and information technologies (Whang 1998). Adoption of new information exchange and process linkage standards based on the extended markup language (XML) is also expected to improve information flows between partners and reduce coordination misalignments across the supply chain (Gosain et al. 2003). Such standards have the potential to overcome the reach versus richness trade-off (Evans and Wurster 1999) by allowing enterprises to link with a larger number of business partners and exchange rich information that goes beyond day-to-day transaction-related information. Further, joint activities and process redesign surrounding adoption of these new standards increases the potential for interorganizational collaboration (Gosain et al. 2004; Premkumar 2000).

These studies point to the need for exploring patterns in (1) how enterprises in supply chains redesign their existing relationships based on the adoption of new standards, (2) relationship configurations that emerge as enterprises adopt these new standards, redesign their interorganizational processes, and develop and use sophisticated internal IT-based systems, and (3) the ability of relationship configurations to achieve both efficiency of operations and create new market knowledge. We draw upon the absorptive capacity view to outline a framework that enables us to address these issues.

The Absorptive Capacity Framework

Zahra and George (2002a) conceptualize absorptive capacity as a dynamic capability pertaining to knowledge creation and utilization that enhances a firm's ability to gain and sustain competitive advantage. According to them, absorptive capacity consists of acquisition, assimilation, transformation, and exploitation capabilities. However, in their conceptualization, the focus is on the individual firms' internal capabilities without consideration of the external sources (such as supply chain partners) from which information may be acquired. Hence, we complement the absorptive capacity perspective with the relational view of the firm (Dyer and Singh 1998) to derive a set of attributes that influence the absorptive capacity of an enterprise in supply chain partnership contexts. These attributes, taken together, form the basis of a capability platform that enhances the potential of an enterprise to share information with its supply chain partners and create new knowledge (Figure 1).

The relational view focuses on interorganizational "routines and processes as an important unit of analysis for understanding competitive advantage" (Dyer and Singh 1998, p. 661). This view especially emphasizes information-sharing routines, relation-specific assets (with appropriate safeguards), and effective governance (with informal and self-enforced mechanisms) for deriving advantage through partnerships. The configurational perspective that forms the basis of our methodological approach also suggests that information systems and organizational routines are important elements in determining the quality of organizational configurations (Miller 1993). In addition, the absorptive capacity view suggests that knowledge creating absorptive capacity is an IT-driven capability (Zahra and George 2002b). Accordingly, we focus on routines, processes, and information systems directed at interorganizational interfaces to uncover supply chain partnership configurations and understand differences between them in terms of their absorptive capacity capabilities. We argue that integrative interorganizational process mechanisms between an enterprise and its supply chain partners can influence absorptive capacity by enabling better acquisition and assimilation of information. Further, the partner interface-directed information systems that an enterprise develops to complement its interorganizational process mechanisms can have a positive impact on the enterprise's absorptive capacity by enabling better assimilation and transformation of information.

In summary, the choice of specific attributes for assessing capability platforms in this study is based on theoretical as well as pragmatic considerations. These attributes focus on partner-related routines and processes as suggested by the relational view of the firm. The attributes also comprehensively cover the dimensions proposed in the recent conceptualization of absorptive capacity capabilities. From a pragmatic information systems perspective, the IT-related attributes have clear implications for information systems design. The attributes associated with the capability platform are examined in greater detail in the next section. We also use the absorptive capacity lens to establish their potential impact on operational efficiency and knowledge creation potential by enabling the acquisition, assimilation, and transformation of rich information between supply chain partners.

Building Absorptive Capacity in Supply Chain Partnerships

Enterprises recognize that their competitive advantage is derived from knowledge resources embedded in social relationships with other enterprises (Koka and Prescott 2002; Uzzi and Lancaster 2003). To effectively leverage these resources, enterprises have to develop the ability to absorb information (Cohen and Levinthal 1990) and combine it with internal information to develop new knowledge (Henderson and Cockburn 1994).

[FIGURE 1 OMITTED]

Several studies have examined absorptive capacity as a predictor of organizational learning outcomes (e.g., Mowery et al. 1996; Szulanski 1996). Research, initially focused on an organization's internal determinants of absorptive capacity (Pennings and Harianto 1992), has expanded to interorganizational settings (Lane and Lubatkin 1998). However, these studies have focused on issues such as R & D expenditures and innovation related to managerial and organizing practices. The process and IT infrastructure that influence absorptive capacity have not been examined.

This study explores how enterprises in supply chain partnerships configure their processes and IT infrastructures to build absorptive capacity to acquire, assimilate, transform, and exploit information resources (Figure 1).

We have identified two distinct groups of constructs that represent the elements of an absorptive capacity enhancing capability platform for enterprises engaged in supply chain relationships: integrative interorganizational process mechanisms and partner interface-directed information systems. Another group of constructs mediates this influence: the nature of information exchanged between enterprises and their supply chain partners. We also present a group of constructs that represent the exploitation element of absorptive capacity: operational efficiency of business activities with partners and partner-enabled market knowledge creation. The groupings of constructs and their definitions are presented in Table 2.

Construct Group #1: Integrative Interorganizational Process Mechanisms: Enabling Acquisition and Assimilation

Integrative mechanisms play an important role in impacting the efficiency and effectiveness of knowledge exchange (Zahra and George 2002a). These mechanisms serve to reduce the structural, cognitive, and structural barriers that impede knowledge sharing (Nahapiet and Ghoshal 1998). Interorganizational relationships manifested as social attachments tend to increase the absorptive capacity of enterprises by reducing cognitive costs and effort (Uzzi and Lancaster 2003). Enterprises engaged in such interorganizational relationships understand each other's information requirements and attempt to provide information based on their partner's needs. This reduces the receiving enterprise's effort and costs required to adapt the acquired information in order to suit its requirements. Past studies suggest that integrative mechanisms between partners deserve attention when studying interorganizational learning (Cyert and March 1963; Levinthal and March 1991; Nelson and Winter 1982). Complex processes can be decomposed into subtasks and coordinated by the actors such that they can connect sufficient know-how to meet situational demands (Weick and Roberts 1993). Such structuring of tasks can increase the information processing capabilities of the whole system (Tushman and Nadler 1978). We focus on three integrative mechanisms that are relevant to interorganizational settings.

Joint Decision Making: Social interaction and collaborative mechanisms are instrumental in the free flow of information between parties (Sheremata 2000). Joint decision making is one such mechanism through which partner enterprises collaboratively make decisions related to the factors that influence their interlinked processes. This mechanism provides an...

NOTE: All illustrations and photos have been removed from this article.



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