Within and Beyond Firm Boundaries: Can Strategic Digitalization and Cross-Firm Information Integration Lessen Complex Uncertainty?

Inefficiencies and coordination failures in firm decision-making may be caused by the lack of common or shared information. As complex uncertainty is a driver of such failures, research is needed to delineate the roles of technology, digitalization, and cross-firm information integration to address the problem within and beyond firm boundaries. Relational contracts within firm boundaries are pervasive, so maintaining shared information among decision-makers is hard. Thus, increased digitalization to reduce uncertainty is relevant for decision-making. Since interorganizational systems can promote interfirm governance and information commonality, connecting digitalization and firm transaction costs has become more important. Because the effects of uncertainty reduction depend on IS capabilities and effective cross-firm information integration, our study offers new insights into performance differences for linked firms. To illustrate, we analyze cases with complex uncertainty theory.