Interorganizational Control with IT

The role of interorganizational information technologies (IT) in the external control of organizations is examined. At the beginning of the case study, an insurance firm is mired in government regulation and hostile relations with independent repair shops. Interorganizational IT was used to gain control over the activities and direction of the repair shops, easing tensions and streamlining the market. The design of the system allowed the insurance company to appear socially conscientious, shifting away from a reputation as a cost center. The reason why these changes were able to come about is explained by the shifting dependencies along the value chain brought about by strategic deployment of the new IT.