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Electronic Markets, Hierarchies, Hubs, and Intermediaries


  • Levent V. Orman

    () (Cornell University)


The impact of information technologies on organizations is difficult to predict, although critical for developing comprehensive organizational strategies. Much of the difficulty is traceable to the treatment of all information technologies as a single factor, when in fact different technologies may have drastically different impacts on the organization. Specifically, the distinction between two general classes of technologies, communication and information processing technologies, is studied. An analytical model is developed to show that these two classes of technologies have exactly the opposite impacts on the organization. Moreover, the impact also depends on the organization, and its existing structure. Communication intensive and processing intensive organizational structures are distinguished and they are shown to be impacted differently by information technologies. An analytical framework is developed to show a continuum of organizational structures, depending on their relative communication and processing intensity, and the effect of various technologies is shown to be to move the organization along that continuum. Communication and information processing technologies are shown to move the organization in opposing directions. Finally, the analytical framework is shown to be robust and valid under a wide variety of conditions, covering most real life organizations.

Suggested Citation

  • Levent V. Orman, 2002. "Electronic Markets, Hierarchies, Hubs, and Intermediaries," Information Systems Frontiers, Springer, vol. 4(2), pages 213-228, July.
  • Handle: RePEc:spr:infosf:v:4:y:2002:i:2:d:10.1023_a:1016007020846
    DOI: 10.1023/A:1016007020846

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    References listed on IDEAS

    1. Paul Osterman, 1986. "The Impact of Computers on the Employment of Clerks and Managers," ILR Review, Cornell University, ILR School, vol. 39(2), pages 175-186, January.
    2. Thomas W. Malone, 1987. "Modeling Coordination in Organizations and Markets," Management Science, INFORMS, vol. 33(10), pages 1317-1332, October.
    3. Hammer, Michael & Champy, James, 1993. "Reengineering the corporation: A manifesto for business revolution," Business Horizons, Elsevier, vol. 36(5), pages 90-91.
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    Cited by:

    1. Weiyin Hong & Frank K. Y. Chan & James Y. L. Thong & Lewis C. Chasalow & Gurpreet Dhillon, 2014. "A Framework and Guidelines for Context-Specific Theorizing in Information Systems Research," Information Systems Research, INFORMS, vol. 25(1), pages 111-136, March.


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