Interorganizational information systems in vertical markets

Interorganizational information systems, i.e., systems spanning more than a single organization, are proliferating as companies become aware of the potential of these systems to affect interorganizational interactions in terms of economic efficiency and strategic manipulation. This new technology can have far-reaching impacts on the structure of entire industries. The article identifies two types of interorganizational information systems, information links and electronic markets. It studies the implications of information links for the coordination of individual organizations with their customers and their suppliers, and the implications of electronic market systems for the efficiency and competition in vertical markets. The strategic significance of the above implications is addressed, and potential long-term impacts on the structure of markets, industries and organizations are discussed