Industry-wide information systems standardization as collective action: The case of the US residential mortgage industry.

Vertical information systems (VIS) standards are technical specifications designed to promote coordination among the organizations within (or across) vertical industry sectors. Examples include the bar code, electronic data interchange (EDI) standards, and RosettaNet business process standards in the electronics industry. This contribution examines VIS standardization through the lens of collective action theory, applied in the literature to IT product standardization, but not yet to VIS standardization, which is led by heterogeneous groups of user organizations rather than by IT vendors. Though an intensive case analysis of VIS standardization in the US residential mortgage industry, VIS standardization success is shown to be as problematic as IT product standardization success, but for different reasons.
VIS standardization involves two linked collective action dilemmas¿standards development and standards diffusion¿with different characteristics, such that a solution to the first may fail to resolve the second. Whereas prior theoretical and empirical research shows that IT product standardization efforts tend to splinter into rival factions that compete through standards wars in the marketplace, successful VIS standards consortia must encompass heterogeneous groups of user organizations and IT vendors without fragmenting. Some tactics successfully used to solve the collective action dilemma of VIS standardization (e.g., governance mechanisms and policies about intellectual property protection) are also used by IT product standardization efforts, but some are different, and successful VIS standardization requires a package of solutions tailored to fit and jointly resolve the specific dilemmas of particular VIS standards initiatives.

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Keywords:

Collective action, Governance, Heterogeneity of resources and interests, Institutional support, Intellectual property rights, Public goods theory, Technical design issues, Vertical IS standards and standardization

Additional information:

Language(s):English
AuthorsMarkus, Lynne (Dept of Information and Process Management, Bentley College, Waltham, MA, USA), Steinfield, Charles W. (Dept. of Telecommunication, Information Studies and Media, Michigan State University, USA), Wigand, Rolf T. (Depts. of Information Science and Management, Cyber College, University of Arkansas, USA), Minton, Gabe (Mortgage Bankers Association, Washington DC, USA)
Publisher:Management Information Systems Research Center, Carlson School of Management, University of Minnesota, USA
Keywords:Collective action, Governance, Heterogeneity of resources and interests, Institutional support, Intellectual property rights, Public goods theory, Technical design issues, Vertical IS standards and standardization
Last update:2006