Overview:

The concept of e-integration is closely related to IT capabilities and evolves from the concept of vertical integration, which could be caused directly by, for example, assets specificity, because of the sunk cost effect in an uncertain economic environment. For example, Whyte (1994) found that the mere existence of asset specificity in the context of uncertainty is sufficient to markedly increase a preference for integration. Roughly at the same time, Zeheer and Venkatraman, the early explorers of relevant business phenomena advanced the concept of electronic integration. In their "milestone" paper published in Management Science, 1994, they argued that electronic integration is a specific form of quasi-integration that exploits IT capabilities.

  Basically, electronic integration is an organization structure that uses inter-organizational information systems (IOIS) such as EDI, proprietary systems, and Internet applications to share information across organizations to achieve higher levels of coordination. E-integration in general refers leveraging the cutting-edge IT technologies or products to provide total solutions for enterprises' informatization and e-commerce initiatives. While even vertical integration sometimes has great cost concerns, with e-integration, organizations are able to enjoy the benefits of vertical integration (e.g., higher levels of coordination) while incurring less cost suffer.