Transaction Supporting Systems and Organisational Change

Abstract

The transaction cost theory distinguishes between three types of organisation: the market,the bureaucracy, and the group. Transaction supporting systems are computer systems which support the constituent transactions of an organisation. There is an ongoing discussion about possible shifts on the scale from market to group induced by transaction supporting systems. Transaction supporting systems supporting market organisation can remove some of the reasons for shifts from market to more complex organisations. The set of transaction supporting systems at the disposal for bureaucracies and groups is, however, much larger than the set available to market organisation. Computer systems supporting cooperative work can only be fully exploited by a group. Therefore any prediction of a shift will depend on the kinds of computer systems taken into consideration. The conclusion is that although the transaction cost theory is useful in characterising the role of computer systems in organisations, we cannot use the theory to make general assertions about the impact of computer systems on the relative benefits of the different types of organisation.