Joining supply and demand conditions of IT enabled change: Toward an economic theory of inter-firm modularisation

Judith Gebauer, Joseph T. Mahoney

Research output: Contribution to journalArticle

Abstract

This paper examines emergent information systems and technologies and explains under what supply and demand conditions inter-firm modularisation of information-based products and services and subsequent vertical deintegration of organisations is more likely. Research in organisational economics identifies transactional attributes such as coordination costs, asset specificity, and the economic non-separability problem to help explain and predict vertical de-integration. We extend this perspective by considering the modularisation of information-based products and services that is noticeable to the customer to develop a framework that joins the four cornerstones of (a) transaction-related efforts; (b) commitment-related contractual risks; (c) measurement-related contractual risks; and (d) modularisation-related impacts on value.
Original languageEnglish (US)
Pages (from-to)140-163
JournalInternational Journal of Strategic Change Management
Volume5
Issue number2
DOIs
Publication statusPublished - Jan 1 2014

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Keywords

  • Information technology
  • modularisation
  • vertical de-integration
  • contractual risk
  • information-based products and services
  • Transaction cost economics
  • coordination
  • asset specificity
  • non-separability problem
  • consumer economics

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