An Empirical Analysis on Organizational Integration and Its Effect on the Internationalization of Exporting Firms in North Cyprus

Abstract

The role of organizational integration within and between organizations and the impacts of integration on organizational growth and performance have been studied extensively in literature. As a building block of supply chain management, organizational integration has positive significant effect on the performance of the organization. Sharing information, gathering business intelligence and establishing collaboration among functional departments and between business partners are also expected to improve the internationalization process as well as the international performance of the organization. We propose and test a model of the relationship between organizational integration and international performance of the organization by using empirical data. Our model differs from past studies in that integration is viewed as four types; functional integration among departments, customer integration, supplier integration and distributor integration. It is aimed to discover the role of each type individually in this model, rather than classifying them as inter- and intra-organizational integration. Our findings show that organizational integration impacts both international commitment and export performance by promoting four measures of integration. These findings reveal the importance of organizational integration for exporting companies in promoting information and business intelligence sharing, and collaborating among functional departments and between business partners.