Today’s organizations are challenged by exible manufacturing,
reduced lead times, just-in-time production,
and increased transportation volumes. This adds coordination
complexity, and increases transaction costs. Process
innovations like electronic data interchange (EDI)
that improve the control of intra- and interorganizationa l
transactions are in great demand. No wonder EDI is being
established as a critical component in the infrastructure
for electronic trading (Kumar & van Dissel, 1996).
Despite this, the widespread adoption of EDI has been
cumbersome: It has been too costly to implement, and the
skills to design and operate EDI have been scarce (Krcmar,
et al., 1995; TEDIS, 1990). Other barriers relate to the nature
of EDI: EDI creates network externalities, depends on
an advanced information technology (IT) infrastructure,
and relies on interorganizationa l standards. Overall, its
diffusion forms an iterative intra- and interorganizationa l
learning process, which shapes and is shaped by such diverse
factors as technology features, adopter’s properties,
and the broader institutiona l environment.
The networked nature of EDI invites us to examine more
carefully how institutiona l regimes affect its diffusion.