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exchange financial resources in a manner driven
by workflow events (Malhotra, Gosain, & El
Sawy, 2005). Value chain participants that do not
have well-designed business processes often do
not have consistent views of important financial
downstream flows such as prices, invoices, credit
terms and upstream financial flows that could
include payments and account payables (Mc-
Cormack & Johnson, 2003).
poulos & Moorman, 2004; Rothaermel & Deeds,
2004; Holmqvist, 2004; Ozsomer & Gencturk,
2003), but none of them involves RFID within a
supply chain context.
Moderator Variables:
reciprocal investments versus
relational interaction
Reciprocal investments are transaction-specific
investments made by trading partners in a business
exchange relationship (Artz, 1999). Williamson
(1996) suggested that a mutual reliance relation-
ship develops when both parties invest assets in
each other and put them at risk, thus, discouraging
the occurrence of opportunistic behaviors on the
part of both parties. Thus, reciprocal investments
appear to reduce the transaction costs associated
with writing, monitoring, and enforcing contrac-
tual agreements (Bromiley & Cummings, 1991)
and encourage long-term, stable cooperative
relationships (Zaheer & Venkatraman, 1995).
When a focal firm makes such investments in a
small number of business exchange partners, the
intention to commit is even more credible (Bakos
& Brynjolfsson, 1993).
Relational interaction routines are defined
as a combination of both formal and informal
mechanisms used to facilitate the exchange of
information and knowledge between a focal firm
and its trading partners (Patnayakuni, Rai, & Seth,
2006). Organizational routines or a formalized
set of procedures put in place so that the firms
in the relationship could explore opportunities
for improvement by promoting predictable task
performance and enabling coordination patterns,
process configurations, and communication pro-
cesses that support the sharing of information
and knowledge. One such opportunity lies in
planning and coordinating supply chain activities
using information flows (Okhuysen & Eisenhardt,
2002). Siemenieniuch, et al. (1999) in fact, found
that the integration of information flows between
supply chain partners, in fact, resulted when the
dependent Variables: exploitation
versus exploration
Drawing from the theory of learning and action
(March, 1991), this study uses the two main cat-
egories of IT employed by firms in their value
chains: exploitation and exploration. “Exploita-
tion” activities seek to improve operational effi-
ciencies (i.e., through increased standardization,
tighter process controls, and reduced manual
intervention), streamline activities, and achieve
greater control over process execution. “Explo-
ration” activities, on the other hand, involve risk
taking, experimentation, and innovation to find
novel ways of solving old problems (Pitoura &
Bhargava, 1999). Recent literature in management
has pursued the idea that “ambidexterity,” meaning
the ability to pursue both exploitation and explora-
tion activities by a firm and its expected positive
effect on firm performance. He, Wong, and Kam
(2004) tested this ambidexterity hypothesis by
examining how exploration and exploitation can
jointly influence firm performance in the context
of firms' approach to technological innovation.
Using a sample of 206 manufacturing firms, the
authors argue for a balanced approach towards
both and found that the interaction between ex-
plorative and exploitative innovation strategies is
positively related to sales growth rate, and that
the relative imbalance between explorative and
exploitative innovation strategies is negatively
related to sales growth rate.
The concepts of exploitation and exploration
have been used in a number of studies (Kyriako-
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