Characteristics of Transaction Cost Economics

In the current competitive business situation, the budget of each investment is likely to be tight. From the beginning of the investment, the cost management might conduct for the best efficiency. Nowadays, firms work with not only domestic industries but also international suppliers. The channel of business opportunities has been developed widely. Global business interaction seems to bring about the relationship between the firm and supplier how to make a profit effectively. In addition, it might be possible to say that this circumstance leads to enhance the domestic industrial relationship too.

It cannot deny that the relationship with other organizations might be significant factor to manage the businesses in current competitive market. In the vertical chain of business process, the firm has to consider what is the efficient way to acquire the profit, which is created by make or buy decision in the vertical boundaries. This paper will be examined following three parts. Firstly, the back grand of the theory will be reviewed briefly. Secondly, the characteristics of the transact…



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