Service-oriented architecture and organizational integration: An empirical study of it-enabled sustained competitive advantage

Abstract

Organizational integration is a phenomenon occurring inexorably in recent years due to rapid advances in IT and intense competition. Past research has found organizational integration, between and within firms, to be positively-related to performance, with IT resources playing a pivotal role in facilitating this trend. In this paper, we argue that IT resources, comprising of IT assets and capabilities, are critical antecedents to organizational integration. We examine the role of service-oriented architecture (SOA) as an IT asset in enabling organizational integration. As an IT-dependent strategic initiative, IT-enabled organizational integration provides significant barriers to competition and gives rise to sustained competitive advantage. Drawing upon the resource-based and configuration theories, we developed a model by conceptualizing both SOA and IT capabilities as higher-order constructs comprising of IT standards and IT architectural design, and IT technical skills and managerial skills respectively. Next, we explore the effects of causal ambiguity to further elucidate the relationship between organizational integration and sustained competitive advantage. Our results provide managers and researchers with invaluable insights to understand the business value of service-oriented computing to achieve organizational integration and to sustain competitive advantage.