An Investigation of Internet Coordination Mechanisms in Network Organizations

Globalization and the Internet are creating a new form of network organization characterized by networks of cooperating and competing firms. The concept of network organization advocates flexible and open organizational structures that would improve coordination among organizational units and between firms. However, there is not yet empirical research on Internet coordination mechanisms and their implications for firm performance and service responsiveness. This study examines Internet coordination mechanisms and network organization characteristics that would improve service responsiveness and firm performance. Data for the study are obtained from a sample of 336 U.K.-based firms in the computer and electronic manufacturing industry.The main results suggest that Internet coordination mechanisms and network organization characteristics positively influence firm performance and service responsiveness. In addition, the results suggest that Internet coordination mechanisms gain further means to support coordination particularly through open systems and virtual channels.