What is External Diffusion

This chapter addresses the theoretically neglected question of how the internal and external diffusion of inter-organizational systems (IOS) impacts firms' performance improvement. The proposed model posits that organizational and relational resources affect both internal and external diffusion. In turn, they influence performance improvement. This study collected data from 187 managers in Korean and Chinese firms. It tested its research model by using partial least squares (PLS). According to the findings, two types of IOS diffusion (i.e., internal and external) mediated the relationship between organizational/relational resources and performance improvement in the supply chain context. The study also found that Korean firms were likely to externally diffuse IOS toward their business partners. Chinese firms would tend to internally diffuse IOS by deploying IOS from their partners.