Abstract: The emerging business networks bring opportunities and challenges to the applications of inter-organizational information systems (IOS). To reveal the mechanism of how IOS generate cooperative performance in the network embedded environment, the theoretical model is built from the IT process perspective to leverage IOS capabilities and inter-firm process ambidexterity through network embedded level. Survey data are collected from 213 manufacturing firms in China. According to the hierarchical regression analysis result, it is found that inter-firm processes alignment and flexibility positively interact to impact on the cooperative performance, while IOS integration capabilities and IOS reconfiguration capabilities have positive correlation with inter-firm process ambidexterity respectively. In contrast to previous research, it is found that network embeddedness has negative moderation effects, high level of network embeddedness will undermine the effect of IOS capabilities on inter-firm process, which shows the paradox of embeddedness. Our findings deepen and expand the framework of IT business value in information systems field, and provide inspiration and guidance for network practices of applying IOS to create value.

Key words: IOS capabilities, inter-firm process, ambidexterity, network embedded, cooperative performance