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Article
Publication date: 6 April 2012

Ed Vosselman

The purpose of this paper is to contrast and to connect a transaction cost economics (TCE) perspective and an actor‐network theory (ANT) perspective on control of interfirm…

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Abstract

Purpose

The purpose of this paper is to contrast and to connect a transaction cost economics (TCE) perspective and an actor‐network theory (ANT) perspective on control of interfirm transactional relationships.

Design/methodology/approach

The paper outlines two theoretical perspectives on interfirm control: an ostensive TCE perspective and a performative ANT perspective. By contrasting these perspectives the different assumptions of each perspective are highlighted. By connecting them, potentially interacting research approaches become visible.

Findings

Ostensive research and performative research may be two sides of the same coin. Ostensive TCE‐based research produces intentional explanations for the choice of certain control structures, while performative research exposes the mobilization of control structures in specific episodes from practice. Interaction between the two potentially accelerates and enhances knowledge production on control in interfirm relationships. TCE‐based ostensive research produces conceptualizations that can be followed as actors, thus enabling a demonstration of their enactment. Conversely, ANT‐based research may challenge the stability of (con)text as it is perceived in TCE‐based research.

Originality/value

The paper offers a base for multi‐paradigm research into control of interfirm transactional relationships. Specifically, the paper offers a base for connecting TCE‐informed research and ANT‐informed research into interfirm control.

Details

Qualitative Research in Accounting & Management, vol. 9 no. 1
Type: Research Article
ISSN: 1176-6093

Keywords

Book part
Publication date: 25 October 2014

Alexander H. Wisgickl and Jonas Puck

Building on transaction cost economics (TCE) and recent critique on international business (IB) research, we intend to sharpen our knowledge on the application of TCE in entry…

Abstract

Purpose

Building on transaction cost economics (TCE) and recent critique on international business (IB) research, we intend to sharpen our knowledge on the application of TCE in entry mode studies.

Methodology/approach

We develop a two-sided model of transaction costs by considering the multinational corporation (MNC) and the local partner.

Findings

Overall, we illustrate that the decisions firms undertake are not always in line with traditional MNC-centric TCE reasoning. Specifically, we identify three situations when “traditional” TCE predicts transaction costs lower than they actually are. Based on our findings we derive implications for future TCE studies.

Originality/value

Our study is among the first to highlight the relevance of potential partners’ transaction costs during market entry. Our model of dually impinged transaction costs is supposed to guide future research and can be of direct use to firms assessing costs of entry.

Details

Multinational Enterprises, Markets and Institutional Diversity
Type: Book
ISBN: 978-1-78441-421-4

Keywords

Article
Publication date: 15 March 2013

Reinald A. Minnaar and Ed G.J. Vosselman

This paper aims to explore management control structure change related to the development of a shared service centre (SSC).

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Abstract

Purpose

This paper aims to explore management control structure change related to the development of a shared service centre (SSC).

Design/methodology/approach

The paper explores a transaction costs economics perspective (TCEperspective) on management control structure change related to the development of an SSC. Particularly, it explores and challenges the scope of such a perspective both in terms of contents (i.e. the nature of management control related to the dimensions of transactions) and process (i.e. the way change is effectuated). It does so by theorizing as well as empirically investigating management control structure change through a case study at PCM (a Dutch newspaper publisher).

Findings

The theoretical analysis broadens existing frameworks of management control structures by particularly pointing to the possibility of including governance structures for internal transactions and exit threats (connected to a market mechanism) in the management control structure of an organization. However, the paper's empirical investigations challenge the broader framework: the possibility of an exit threat was not explicitly considered by top management (“the designer” of management control). More profoundly, empirical investigations challenge the calculative approach of the change and show that the change in management control is to a large extent a drifting process.

Research limitations/implications

An instrumental calculative approach towards SSC‐related management control change should be complemented with a relational perspective on such change, in order to further explore its drifting character.

Practical implications

A transaction costs economics approach to change in management control might provide practitioners with insights into the efficiency of specific management control structures.

Originality/value

The paper contributes to the extant knowledge by both exploring and challenging a TCEperspective on SSC‐related changes in management control.

Details

Journal of Accounting & Organizational Change, vol. 9 no. 1
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 17 July 2013

Mark Cecchini, Robert Leitch and Caroline Strobel

Transfer pricing stands at the heart of a MNE management control system. We review the theories of TCE and RBV and develop antecedents and consequences of transfer prices based on…

Abstract

Transfer pricing stands at the heart of a MNE management control system. We review the theories of TCE and RBV and develop antecedents and consequences of transfer prices based on these theories. We propose viewing transfer pricing decisions through a TCE and RBV value chain framework. We review a sample of transfer pricing literature based on this theoretical perspective and show how it fits within our framework. Our framework suggests that setting transfer pricing policy is indeed a complex problem that includes many factors and has many consequences, some of which may be at odds with each other. We give some suggestions for future research based on this framework.

Details

Journal of Accounting Literature, vol. 31 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Book part
Publication date: 13 August 2014

Reinald Minnaar

The study aims to add to the knowledge of governance and control aspects of intrafirm relationships by exploring a transaction costs economics perspective (TCE perspective) on…

Abstract

Purpose

The study aims to add to the knowledge of governance and control aspects of intrafirm relationships by exploring a transaction costs economics perspective (TCE perspective) on governance and management control structure choices related to the development of a shared service center (SSC).

Design/methodology/approach

The notion of governance and control in SSC organizations is explored and a TCE model is developed to analyze management control structure choices for SSC governance. The nature of internal transactions is related to the dimensions of transactions. Then an example case study is used to illustrate the application of the theoretical model.

Findings

The theoretical analysis broadens existing frameworks of management control structures by particularly pointing to the possibility of including governance structures for internal transactions and exit threats (connected to a market mechanism) in the management control structure of an organization. Confrontation with the case example illustrates that the possibility of an exit threat was not explicitly considered by top management (“the designer” of management control). Although the TCE model may be a useful tool for analysis purposes, it has little explanatory power in this particular case. Organizational change processes toward SSCs are complex and can only partly be examined with conventional economics-based approaches such as TCE.

Research limitations/implications

Governance and control of SSCs is conceptually theorized, using an instrumental economics approach. The case study is not generalizable but illustrates the use of the model in a particular situation. To understand governance and control change within SSC organizations, more longitudinal case studies are needed.

Practical implications

A TCE approach to governance and control choices regarding SSCs might provide practitioners with insights into the efficiency of specific management control structures.

Originality/value

This chapter contributes to the extant knowledge by both exploring and challenging a TCE perspective on SSC-related changes in management control.

Details

Shared Services as a New Organizational Form
Type: Book
ISBN: 978-1-78350-536-4

Keywords

Article
Publication date: 11 November 2019

Fang-Yi Lo, Yue Wang and Wu Zhan

The purpose of this paper is to establish the effect of top management team (TMT) cultural diversity on firm performance with a framework that considers such an effect from both…

1370

Abstract

Purpose

The purpose of this paper is to establish the effect of top management team (TMT) cultural diversity on firm performance with a framework that considers such an effect from both cost and benefit perspectives. The paper also examines whether and how diversity management mechanisms such as socialisation and tenure may moderate the effect of TMT diversity on firm performance.

Design/methodology/approach

Drawing upon two competing perspectives of resource-based view (RBV) and transaction cost economics (TCE), this paper theorises and tests the potential positive and negative effects of TMT cultural diversity on firm performance with 442 publicly listed IT companies in the USA.

Findings

The results supported the RBV prediction that TMT cultural diversity enhances firm performance and socialisation strengthens the positive effects of a culturally diverse TMT on firm performance. However, tenure was not found to be important in promoting diversity gains or mitigating diversity costs. By showing clear support for the RBV prediction of the positive impact of TMT cultural diversity and refuting the TCE prediction of the potentially negative effects, this research strengthens the business case for embracing cultural diversity in TMTs.

Originality/value

This paper contributes to the current literature by developing a more balanced framework to deepen our knowledge of how TMT cultural diversity may impact firm performance, and how the use of socialisation and tenure may moderate the TMT cultural diversity–firm performance relationship from both cost and benefit perspectives.

Article
Publication date: 14 July 2023

Kiran Patil, Vipul Garg, Janeth Gabaldon, Himali Patil, Suman Niranjan and Timothy Hawkins

This paper aims to examine how interfirm transactional and relational assets drive firm performance (FP) in digitally integrated supply chains.

Abstract

Purpose

This paper aims to examine how interfirm transactional and relational assets drive firm performance (FP) in digitally integrated supply chains.

Design/methodology/approach

The authors combine the Transaction Cost Economics (TCE) and Relational Exchange Theory (RET) frameworks to hypothesize that FP will be a function of Asset Specificity (AS), Digital Technology Usage (DTU) and Collaborative Information Sharing (CIS). In addition, the authors hypothesize that Supply Chain Integration (SCI) will partially mediate the effect of DTU and fully mediate the impact of AS and CIS on FP. A cross-sectional survey of supply chain managers is used to test the hypotheses.

Findings

Findings indicate that specific investments in digitally integrated supply chains would increase FP. In addition, SCI fully mediates the relationships between AS and FP and CIS and FP, while SCI partially mediates the influence of DTU on FP.

Practical implications

Managers could strategically engage in the technologies that effectively fit within the firm’s supply chain strategies and seek to develop a pragmatic expertise that enables the effective use of technology in a comprehensive setting.

Originality/value

The study enriches the extant literature by incorporating TCE and RET as contradictory viewpoints on AS and investigating how transactional and relational assets affect FP in digitally integrated supply chains.

Details

Journal of Enterprise Information Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 13 March 2017

Helmut M. Dietl, Anil Özdemir and Nicolas Schweizer

The purpose of this paper is to understand and explain why some professional sports organizations outsource their sponsorship-related activities to sports marketing agencies…

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Abstract

Purpose

The purpose of this paper is to understand and explain why some professional sports organizations outsource their sponsorship-related activities to sports marketing agencies, whereas others purposely retain these activities in-house.

Design/methodology/approach

The paper applies transaction cost economics (TCE) and the resource-based view (RBV) to outsourcing of sports sponsorship activities. It examines the extent determinants descending from these theories influence the sourcing choice of professional sports organizations.

Findings

This paper argues that determinants derived from TCE and the RBV are useful to understand the factors likely to influence an outsourcing decision and to analyze which sponsorship-related activities are more or less likely to be outsourced. However, these determinants are insufficient to shed light on why sports organizations arrive at different conclusions about their internal and external environments. With recourse to contingency theory, the authors propose two additional contingencies that affect the sourcing decision: a sport organization’s size and its degree of professionalism. This integrative conceptual framework improves the understanding of sports sponsorship outsourcing, makes several propositions, and paves the way for future empirical research in sports sponsorship.

Originality/value

This is the first paper to apply classical theoretical concepts to outsourcing sports sponsorship activities. As a conceptual paper, it hopes to stimulate further research on outsourcing in sports sponsorship and on the relationship between sports organizations and sports marketing agencies.

Details

Sport, Business and Management: An International Journal, vol. 7 no. 1
Type: Research Article
ISSN: 2042-678X

Keywords

Article
Publication date: 20 July 2020

Longwei Wang, Meige Song, Min Zhang and Li Wang

This study aims to empirically investigate the role of contracts in tacit knowledge acquisition in research and development (R&D) alliances. By combining the perspectives of…

Abstract

Purpose

This study aims to empirically investigate the role of contracts in tacit knowledge acquisition in research and development (R&D) alliances. By combining the perspectives of sensemaking and transaction cost economics (TCE), this study proposes a model about the mechanisms through which shared goals and contract completeness jointly affect tacit knowledge acquisition.

Design/methodology/approach

This study adopted a quantitative design and used the questionnaire survey method to collect data. The authors finally collected data on 196 R&D alliance samples in China. Multiple regression analysis was used to test the hypotheses.

Findings

There is strong empirical support that contract completeness has a positive effect on shared goals and that shared goals have a positive effect on tacit knowledge acquisition. Meanwhile, contract completeness weakens the positive effect of shared goals on tacit knowledge acquisition. Therefore, this study reveals that contract completeness has an inverted U-shaped effect on tacit knowledge acquisition.

Practical implications

The findings suggest that managers should consider both the psychological and rational effects of contract governance simultaneously, thus recognizing the importance of a moderate level of contract completeness for tacit knowledge acquisition in R&D alliances.

Originality/value

This study enhances the current understanding of contract governance by integrating the sensemaking and TCE perspectives. The findings provide a possible explanation of how contracts affect tacit knowledge acquisition in R&D alliances. The authors expand the research on contract governance and alliance knowledge acquisition by revealing the inverted U-shaped relationship between contract governance and tacit knowledge acquisition.

Details

Journal of Knowledge Management, vol. 25 no. 5
Type: Research Article
ISSN: 1367-3270

Keywords

Article
Publication date: 16 August 2010

Lynette J. Ryals and Andrew S. Humphries

This paper examines two co‐manufacturing relationships, which were efficient with the aim of understanding why they were not value maximising.

Abstract

Purpose

This paper examines two co‐manufacturing relationships, which were efficient with the aim of understanding why they were not value maximising.

Design/methodology/approach

The paper utilises a methodology designed by Wilding and Humphries and based on Williamson's organisation failure framework. Using a case study approach, it is applied in a new context to provide insights into the dynamics within two co‐manufacturing relationships in the food‐manufacturing industry.

Findings

The relationships are judged as operationally efficient by both sides but frustrations and conflicts have emerged over time, leading to a real danger of relationship breakdown. These problems are caused by failure to involve co‐manufacturing partners in strategy discussions, shortcomings in relationship management, and lack of recognition of partners' developing capabilities.

Research limitations/implications

The paper challenges the transaction cost economics (TCE) focus on efficiency in the context of co‐manufacturing relationships and advocates a relational perspective to value maximisation.

Practical implications

The findings indicate that an undue focus on operational efficiency in the management of close, long‐duration co‐manufacturing relationships may result in a reduction in innovation and a failure to maximise value.

Originality/value

The paper provides empirical support for arguments in favour of dynamic efficiency, rather than the static efficiency implied by TCE. These findings are of great importance to companies engaged in strategically important co‐manufacturing relationships, as they demonstrate how “negative spiral behaviours” can develop.

Details

The International Journal of Logistics Management, vol. 21 no. 2
Type: Research Article
ISSN: 0957-4093

Keywords

1 – 10 of 983