The Net is a medium of communication that’s fundamentally changing the architecture of corporations. Throughout the twentieth century we had vertically integrated models. That’s because, as the economist Ronald Coase explained sixty years ago, the costs of transaction, search, coordination, contracting-broadly, the costs of partnering-tended to be greater than the cost of doing things within the boundaries of the corporation. But the Net has enabled the creation of an infrastructure in which such costs are dramatically lower.
Source: Harvard Business School (HBS) Working Knowledge
Subjects: IT / Technology / E-Business, Management