{"id":418,"date":"2016-07-13T12:49:19","date_gmt":"2016-07-13T17:49:19","guid":{"rendered":"http:\/\/blogs.uww.edu\/prasad\/?page_id=418"},"modified":"2016-07-13T12:49:19","modified_gmt":"2016-07-13T17:49:19","slug":"a-transaction-cost-approach-to-supply-chain-management","status":"publish","type":"page","link":"https:\/\/blogs.uww.edu\/prasad\/teaching\/independent-study\/a-transaction-cost-approach-to-supply-chain-management\/","title":{"rendered":"A transaction cost approach to supply chain management"},"content":{"rendered":"

Jill E. Hobbs<\/p>\n

Supply Chain Management<\/h2>\n

1996, Vol 1, Issue 2, pp. 15-27<\/p>\n

 <\/p>\n

1)\u00a0\u00a0\u00a0\u00a0\u00a0 Economics and supply chain management<\/p>\n

    \n
  1. a) Historically supply chain management have not been economically evaluated due to a conflict with economic theory- the perfect market assumption<\/li>\n
  2. b) Theory concentrates on market equilibrium, not how business relationships arise<\/li>\n<\/ol>\n

    2)\u00a0\u00a0\u00a0\u00a0\u00a0 The Firm<\/p>\n

      \n
    1. a) In order to understand what a firm does, we must understand its existence and the forces that govern the organizational transactions<\/li>\n<\/ol>\n

      3)\u00a0\u00a0\u00a0\u00a0\u00a0 Transaction costs<\/p>\n

        \n
      1. a) Costs of carrying out any exchange<\/li>\n
      2. b) Transactions do not occur without friction<\/li>\n
      3. c) Three main classifications<\/li>\n
      4. i) Information costs<\/li>\n
      5. ii) Negotiation costs<\/li>\n<\/ol>\n

        iii)\u00a0\u00a0\u00a0\u00a0 Monitoring costs<\/p>\n

        4)\u00a0\u00a0\u00a0\u00a0\u00a0 Transaction cost analysis- four key concepts<\/p>\n

          \n
        1. a) Bounded rationality- rational decision making is affected by peoples incapability to assess all possible alternatives<\/li>\n
        2. b) Opportunism- individuals\/businesses can intend to exploit other parties<\/li>\n
        3. c) Asset specificity- invested resources without any alternative use<\/li>\n
        4. d) Information asymmetry- incomplete exchanges of information<\/li>\n
        5. i) Ex ante- opportunism occurring due to information hidden prior to a transaction<\/li>\n
        6. ii) Ex post- opportunism occurring after a transaction because of hidden actions of individuals\/firms<\/li>\n<\/ol>\n

          5)\u00a0\u00a0\u00a0\u00a0\u00a0 Methodologies in measuring transaction costs<\/p>\n

            \n
          1. a) Characteristics of transaction costs<\/li>\n
          2. i) Difficult to separate from other managerial costs<\/li>\n
          3. ii) Not readily measurable<\/li>\n<\/ol>\n

            iii)\u00a0\u00a0\u00a0\u00a0 Complexity makes it difficult to quantify<\/p>\n

              \n
            1. iv) Data is not readily available from traditional sources, it must be collected<\/li>\n
            2. b) 3 broad types of measuring transaction costs<\/li>\n
            3. i) evaluating the effect of transaction costs on vertical coordination across industries using secondary data sources<\/li>\n
            4. ii) investigating the industry-specific impact of transaction costs on vertical coordination using secondary data<\/li>\n<\/ol>\n

              iii)\u00a0\u00a0\u00a0\u00a0 investigating the industry-specific impact of transaction costs on vertical coordination using primary data<\/p>\n

              6)\u00a0\u00a0\u00a0\u00a0\u00a0 Conclusions and key points<\/p>\n

                \n
              1. a) As uncertainty rises, vertical integration increases<\/li>\n
              2. b) As costs of coordinating activities with the firm increase, vertical integration decreases<\/li>\n
              3. c) Transaction costs are a primary deterrent of vertical integration<\/li>\n
              4. d) Quantitative measures are not necessary, methodologies which identify costs and measure their importance may suffice<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

                Jill E. Hobbs Supply Chain Management 1996, Vol 1, Issue 2, pp. 15-27   1)\u00a0\u00a0\u00a0\u00a0\u00a0 Economics and supply chain management a) Historically supply chain management have not been economically evaluated due to a conflict with economic theory- the perfect market assumption b) Theory concentrates on market equilibrium, not how business relationships arise 2)\u00a0\u00a0\u00a0\u00a0\u00a0 The Firm […]<\/p>\n","protected":false},"author":3916,"featured_media":0,"parent":118,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"class_list":["post-418","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/users\/3916"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/comments?post=418"}],"version-history":[{"count":1,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/418\/revisions"}],"predecessor-version":[{"id":419,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/418\/revisions\/419"}],"up":[{"embeddable":true,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/118"}],"wp:attachment":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/media?parent=418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}