Going Concerns: The Governance of Interorganizational Coordination Hubs

Business-to-business interactions are increasingly conducted through interorganizational coordination hubs, in which standardized information technology-based platforms provide data and business process interoperability for interactions among the organizations in particular industrial communities. Because the governance of interorganizational arrangements is believed to affect their efficiency and effectiveness, this paper explores how and why interorganizational coordination hubs are governed. Analysis of relevant prior theory and case examples shows that coordination hub governance is designed to balance the sometimes conflicting needs for capital to invest in new technology, for participation of industry members, and for the protection of data resources. Findings suggest that the governance of interorganizational coordination hubs is not the starkly categorical choice between collective (member-owned) and investor-owned forms as suggested by prior theory. Instead, many hybrid arrangements are observed in the five examined cases. Future theoretical development and empirical research are needed to understand the increasingly important phenomenon of coordination hub governance.