The impact of unequal interdependent benefits from interorganizational systems

Managing the growth of interorganizational systems (IOS), such as electronic data interchange (EDI), and the adoption decisions of trading partners have became major concerns for network managers. The fact that IOS are shared by separate trading partners means that the benefits from IOS are both unequal and interdependent. Therefore, how trading partners implement and use the system internally may directly affect the original firm's benefit. We study two buyer-initiated EDI systems where the way in which trading partners internally implement the technology directly affects the level of benefit for the initiating buyer. In both cases, the buyer's benefit is increased when suppliers choose to adopt an optional buyer initiated modification to their system. However, because it is not clear how suppliers benefit from the modification, they may not have adequate incentives to make the modification.<>