Information assets in interorganizational governance: Exploring the property rights perspective

Abstract

Empirical research in interorganizational governance has been motivated primarily by transaction cost economics (TCE) and its focus on proprietary electronic linkages, asset specific investments, and consequent holdup problems. Where many early interorganizational systems were characterized by nonredeployable assets, recent instances are distinguished by open standards and a higher degree of redeployable technology. Hence, interorganizational research has reached out to alternative theories that embrace social and procedural interdependence in addition to technological links. The principal theoretical alternative to TCE that addresses social interdependence is social networking theory. Where both TCE and networking have relative merits as explanatory frameworks, they are antithetical in their purest forms and most often mutually exclusive in application. However, both perspectives confront analytical boundaries that may be overcome through answers and dimensions provided by the other. Hence, a synthesis between these competing theoretical viewpoints is sought. The property rights perspective of information, one that retains TCE's predictive ability and networking's contextual focus, is introduced and critically evaluated as an alternative framework that may enable such a synthesis. A positive case study is analyzed which explores the theory's utility in illuminating interorganizational systems with disaggregate physical and information assets, technical, procedural, and social interdependence. The case concludes with a critical evaluation of the perspective's merits as a positive explanatory framework of interorganizational governance, finding that the predictive utility is greatest where information is inalienable and opportunism is high.