ication, whereby enterprises cooperate across markets or across industries in order to leverage their key resources in new areas, exploiting increased economics of scale and scope in those resources. Relationships with other firms that were previously not possible due to high coordination costs or high transaction risk may become feasible. Scott Morton (1991) proposes that the scope for cooperation is determined by two factors: the degree of inter-relatedness between its production process and that of its suppliers and customers; and exploitability, by which is meant the extent to which the advantage is sustainable rather than contestable. Different industrial structures according are classified according to their inter-relatedness and exploitability, as in Exhibit 10. The potential for competitive and cooperative behaviour is dependent on the industry's position in the scheme. The higher the exploitability and the higher the inter-relatedness of an industry, the greater the scope for competitive SIS. On the other hand, the lower the interrelatedness and the lower the exploitability, the greater the likelihood of co-operative SIS. A more substantial degree of cooperation is possible. There are circumstances in which the whole of an industry may suspend competition in respect of some aspect of its operations, and pursue a joint strategy of collaboration. Typical examples are the adoption of standards (such as the dimensions and functional characteristics of interfaces between products, or common messaging systems) and of common infrastructure (such as transport containers and network services providers). Collaboration may be in the interests of the customers, in that it may result in lower costs, higher quality or greater reliability; and of suppliers, in that it may lead to a reduction in the variability of their customers' demands. It can, of course, be detrimental to the interests of suppliers and/or customers, to the extent that it e...
