Information technology and industrial cooperation

Cooperation is becoming increasingly important in the modern business environment. The resulting emergence of new forms of organizational relationships is challenging managers to understand the fundamental dynamics of cooperation in order to evaluate and restructure their industrial relationships. IT can play an important role in the process of industrial restructuring, by altering the balance between the benefits of cooperation ad the costs or risks of cooperation. The authors present a framework for investigating cooperative relationships based on extending transactions cost economics. This allows some interesting statements about the role IT plays in cooperative arrangements. In particular, IT has the capability to increase integration without necessarily increasing transaction risks, by reducing required sunk capital and reducing monitoring costs