Outsourcing has advanced to an important measure that is applied broadly in operations management. Nowadays, suppliers of manufacturing companies do not only provide direct material like raw material and operational supplements but offer components and advanced modules incurring many value-adding stages. Whereas in the past companies built up local supplier networks, they recently tend to searc...

This paper compares two approaches to the measurement of the resources devoted to the organisational task in the economy, i.e. Porat and Rubin’s ‘Information Economy’ and Wallis and North’s ‘Transaction Sector’. While there have been a number of studies using the information economy approach, it seems to have made way for a narrower focus on the information technology economy in recent years. T...

At times in their interfirm relationships, distribution channel organizations may take advantage of their exchange partners by behaving guilefully. This opportunistic behavior adversely impacts channel member satisfaction (Gassenheimer et al., 1996) as well as the relational exchange norms among channel partners (Gundlach et al., 1995; Sindhav & Lusch, 2008). It also increases transaction costs...

Academicians and practitioners are becoming increasingly interested in the economics of Information Technology (IT). In part, this interest stems from the increased role that IT now plays in the strategic thinking of most large organizations, and from the significant dollar costs expended by these organizations on IT. Naturally enough, researchers are turning to economics as a reference discipl...

This paper focuses on the choice of the governance form of strategic alliances. We survey arguments inspired by the transaction cost economics tradition and other contractual perspectives on the theory of the firm, according to which such choice mainly depends on the transaction cost economizing properties of different organizational forms. We proposes additional considerations based on evoluti...

The concept of “contract” has similar but not identical interpretations for lawyers and economists. Both Economic and Legal theories distinguish transactions from contracts based on the possibility to rely on court enforcement. Formal and informal promises are enforceable by courts, however there is not a clear distinction between a contract and an agreement since agents do not know a priori th...

This chapter addresses the relationship between a supplier and the manufacturers that it serves, from the perspective of transaction cost economics theory (TCE). TCE deals with relationships between organizations, such as customers, manufacturers and suppliers. It states that investment in transaction-specific assets opens the door for opportunistic behavior by an organization’s partners. Inter...

Switching between electronic and traditional markets, consumers nowadays impact profoundly on market makers. To successful conduct business, firms have to carefully making channel decisions to meet the needs of customers. The purpose of this article is to offer normative models for analyzing consumer channel selection behaviors between traditional and electronic markets. Referred to transaction...

The “transaction cost” theory of the firm introduced by Coase (1937) has become a standard framework for the study of institutional arrangements. The Coasian framework helps explain not only the existence of the firm, but also its size and scope. Why, in Coase’s (1937, pp. 393–94) words, “does the entrepreneur not organize one less transaction or one more?” Some firms are highly integrated: IBM...