Interorganizational Systems (IOS) can have influences that extend beyond the organizations that implement them. IOSs can reduce the costs of communications and at the same time extend the possibilities of coordination industry . The use of IOS is argued to influence the power and control structures within interorganizational relationships . The propositions on how IOSs influence the power and control are divided along two directions. Some literature, mostly earlier published, argued that the use of IOS’s is exclusive to selected organizations that fulfilled the demands and rigorous criteria to join. They mostly referred to EDI systems that needed high set up costs. The technology restricted the IOS to organizations that possessed the required resources. Recent literature contends that the use of modern IOS leads to more just relationsips between organizations. The large organizations used previously their central position to dictate the terms of relationships and they exploited this by utilizing power to their favor.The progress of IT has and the emergence of standards, such as XML, has enabled small and mid-sized organizations to have a broader choice of trading partners.
Transaction cost economics (TCE) concentrates on the make or buy decision. The theory argues that it is more efficient for an organization to buy a standard product externally from a special supplier who is an expert in producing that product than to produce the product internally. Nonetheless, buying products on the market can be less attractive when certain conditions apply such as for example when the organization needs a specific customized product. The organization is forced to internalize production under these conditions. TCE justifies why and predicts when an organization chooses to internalize the production process or conduct market exchange to acquire the product. IOS Research applying the TCE has tried to investigate the impact of IOS on the transaction structure.
References
Angeles, R. (2000), "Revisiting the role of Internet-EDI in the current electronic scene," Logistics Information Management, 13 (1), 45-57.
Bakos, J.Y. and Erik Brynjolfsson (1993), "Infroamtion Technology, Incentives and the Optimal
Number of Suppliers," Journal of Management Information Systems, 10 (2), 37.
Bakos, Y. and B. Nault (1997), "Ownership and Investment in Electronic Networks," Information Systems Research, 8 (4), 321-41.
Banker, R., J. Kalvenes, and R. Patterson (2000), "Information Technology, Contract Completeness and Buyer-Supplier RElationships," in The 21st Annual International Conference on Information Systems. Brisbane, Australia.
Transaction cost economics (TCE) concentrates on the make or buy decision. The theory argues that it is more efficient for an organization to buy a standard product externally from a special supplier who is an expert in producing that product than to produce the product internally. Nonetheless, buying products on the market can be less attractive when certain conditions apply such as for example when the organization needs a specific customized product. The organization is forced to internalize production under these conditions. TCE justifies why and predicts when an organization chooses to internalize the production process or conduct market exchange to acquire the product. IOS Research applying the TCE has tried to investigate the impact of IOS on the transaction structure.
References
Angeles, R. (2000), "Revisiting the role of Internet-EDI in the current electronic scene," Logistics Information Management, 13 (1), 45-57.
Bakos, J.Y. and Erik Brynjolfsson (1993), "Infroamtion Technology, Incentives and the Optimal
Number of Suppliers," Journal of Management Information Systems, 10 (2), 37.
Bakos, Y. and B. Nault (1997), "Ownership and Investment in Electronic Networks," Information Systems Research, 8 (4), 321-41.
Banker, R., J. Kalvenes, and R. Patterson (2000), "Information Technology, Contract Completeness and Buyer-Supplier RElationships," in The 21st Annual International Conference on Information Systems. Brisbane, Australia.
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