Related Literature

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The IOS research has produced a number of articles that attempted to illuminate numerous aspects of inter-organizational networking, including the inter-organizational relationship, IOS strategic planning (McFarlan et al., 1983), and the IOS network structure (Malone et al., 1987; Marchewka & Towell, 1998).

Barrett and Konsynski classified IOSs on five levels of IOS participation. At Level 1, a firm accesses a system that is run and operated by other companies. Level 2 participants design, develop, maintain, and share a single application, such as a customer order-processing system. Level 3 participants take responsibility for a network which lower-level participants may share. Level 4 participants develop and share a network with diverse applications that may be used by many different types of participants. At Level 5, any number of lower- level participants may be integrated in real time over complex operating environments.

Johnston and Vitale (1988) developed a classification framework using three dimensions: business purpose, relationships with participants, and information function. The framework takes the form of a decision tree, where the three dimensions are sequentially interconnected. Business purpose indicates why an IOS is needed; it could be either to leverage present business or to enter a new information-driven business. Relationships refer to those linked by the system; they could be customers, dealers, suppliers, or competitors. Information function is concerned with functions that the system is intended to perform; it may process boundary transactions, retrieve and analyze shared information, or be internally used. When taken together, these dimensions produce 24 possible combinations (= 2 4 3). Thus, this framework suffers from complexity that makes it hard to analyze the characteristics of each category. It also is not so much a framework to classify an IOS as one to study the relationships among its factors.

Kumar and van Dissel present a typology for an IOS based on inter-organizational interdependence. They view an IOS as a technology designed and implemented to simplify the relationships between organizations. Based on three interdependent relationships, including pooled, sequential, and reciprocal interdependencies, their framework comprises information resources, value and supply chains, and networks. The pooled information resource IOSs involve sharing common IT resources. Examples include common databases, communication networks, and applications. These provide economies of scale with consequent cost and risk sharing. The second type, the value- or supply-chain IOS, supports customer–supplier relationships and occurs as a consequence of these relationships along the value or supply chain. These IOSs institutionalize sequential interdependency between organizations. Order-entry and processing systems and CAD-to-CAD IOSs belong to this type. Finally, networked IOSs operationalize and implement reciprocal interdependencies between organizations. They are exemplified by joint marketing programs, where firms exchange information for mutual advantage.

Meanwhile, with the growing use of the Internet by business organizations for conducting commercial transactions, IOS research is being merged with the electronic commerce (EC) area. Related literature (Sawhney & Kaplan, 1999) suggests that the B2B e-marketplace linking suppliers and buyers may be classified into two types, horizontal and vertical. Vertical e-marketplaces are organized around industries, whereas horizontal ones focus on specific business functions or processes. The Internet-based IS created by this B2B intermediary is likely to emerge as a new form of IOS in the digital economy.

As a whole, prior research on the classification of IOS lacks the perspective of the linkage of corporate value activities.1 Classification is based upon modes of IOS participation, the why–who–what of IOSs, interorganizational interdependence, etc. But, few researchers have looked at the “value activity linkage” as a way to understand IOS characteristics.

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