A comparison of structure and strategy in electronic commerce

The study of interorganizational systems (IOSs) has been an important area of interest in information systems research. Proponents of “transaction cost” economic theory predict that IOSs will tend towards a market‐driven orientation over time. Other researchers, however, suggest that there is a reverse trend occurring towards more hierarchical systems (fewer and closer relationships between buyers and sellers). This study examines the theoretical and strategic perspectives that tend to promote one form of network relationship over the other. An exploratory qualitative study of both a market (Amazon.com’s Internet book sales system) and a hierarchical (the Wallace Information Network system) network structure supports the development of a framework to guide future research and strategy.