The Interaction between Collaboration, Organisational Capacity and E-Business Diffusion and their Effect on Business Performance: Cases Study on Wenzhou Electrical Industry

This study empirically tests the joint impact of trust, e-commerce diffusion and organisational capacity and collaboration and investigates the effect of the interaction among them on business performance. Basing on the literature review and seven pilot case studies, this research conducted hypotheses and mediation tests for collaboration and e-collaboration in interactive with two facilitating roles from trust and organisational capacity on business performance. Data analysis is based on a usable dataset of 395 responses (valid response rate of 79%) collected from the perspectives of CEOs and senior managers in Wenzhou China manufacturing electrical industry cluster. This research is supported by Department of Education of Zhejiang Province Foundation (Y201328223) and Priority Academic Program Development of Zhejiang Higher Education Institutions -Business Administration. Results indicate that collaboration plays a full mediator between the trust and business performance, as well as between organisational capacities and business performance; and e-business diffusion not significantly affect the output of collaboration. This result may be rationalized by the inability of these organisations to nurture an e-business diffusion culture and organisational process effectiveness in making collaboration with their trading partners and the organisations do not give attention to the with partners. The empirical evidence from this research implied that, e-business facilitated business interactions require sound organisational capacities and trusted relationship in managing wide value-chain wide interorganisational collaboration.