In the world of business, there is the reality of supply and demand. A business that is not willing to adapt to the changing times, economy, and customers is likely to fall into negative versus a business to tries to find ways to instantly obtain information on what is needed to meet the demands of the market without wasting time with logistics.
An IOS is a system in place planned out by an organization, in which they will locate key points of contact for communication in terms of establishing patterns in the market. By this I am referring to, for example, the suppliers for a chain restaurant such as Burger King often know when are the key days, hours, and times for clients to consume the goods provided, hence, you might see a truck delivering bread, or condiments, or beef patties to the Burger King at a set time every day. In the container truck, there is an inventory of all that the restaurant will need for the day.
This entire dynamic is possible thanks to an IOS, or a plan made ahead in which all the suppliers for Burger King would have studied the trends and analyzed the needs-basis for the corporation. As a result, the corporation will be supplied automatically with the things they need -not because Burger King called- but because the systems of support acted among themselves and worked together to complete the daily goal as established.
A system is broadly defined as an interrelated structure or collection of parts that function together to achieve a common goal. Thus a device like an oil lamp is a simple system in which a container with oil and a wick function together to produce light of the lamp. Systems can be of various sizes, such as a machinery, human body, an organization, an economy, or the complete universe.
Inter-organizational system (IOS) refers to the system containing multiple organizations operating in related field. For example, we can think of an IOS consisting of a manufacturing company along with its suppliers and distribution channel partners.
There is no hard and fast rules regarding different organizations that are constituent members of an IOS.The concept of system is an intellectual device to understand, analyse, design and manage different activities, functions, organizations and equipments. The way the scope and constituent parts of any system including IOS is determined is based very much on the purpose for which the systems concept is used. In this way an organization may form a constituent part of many different IOS. For example the manufacturing company referred in above paragraph may also be part of another IOS consisting of all the companies manufacturing the same product, or of all the companies having manufacturing plant in a particular geographic location.
It is not as if individuals work or do not work within an IOS. Ever person working in an organization is a part of that organizational system. And that organization it self is a part of one or more inter-organizational system. Thus almost every employed person is a member of many IOS. However, some people may work in organization that use the systems concept for managing its activities and therefor has identified and analyse the IOS systems of which it is a part. In such organization the functions and activities of employees are likely to be more influenced by considerations of the interrelationships between the organizations within the IOS.