Relating agility and electronic integration: The role of knowledge and process coordination mechanisms

Abstract

Current competitive environments necessitate that firms pursue electronic integration in parallel to agility. However, most research to date has examined integration and agility relatively independently and has overlooked the relationship between them. Using coordination theory, this paper suggests that integration enables the two capabilities of agility (i.e., sensing and responding). Results from a study of 303 business unit operations of manufacturing organizations show that integration within business units and with outside partners is positively associated with process coupling of the value chain, both internally and externally. Further, both types of integration are positively associated with knowledge flow within and outside the business unit. In turn, both lead to higher capability to sense change in the business environment and respond to it with agility. This research helps us understand the integration-agility relation better by investigating the role of the knowledge and process capabilities.