Understanding the costs of interpersonal helping and governing mechanisms: an application of transaction cost economics theory

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shih Yung Chou ◽  
Charles Ramser
Keyword(s):  
Transaction Cost ◽  
Design Methodology ◽  
Transaction Cost Economics ◽  
Autonomous Motivation ◽  
Asset Specificity ◽  
Dark Side ◽  
Theoretical Underpinning ◽  
Content Type ◽  
Interpersonal Helping ◽  
Theoretical Standpoint

PurposeUtilizing transaction cost economics (TCE) theory as the theoretical underpinning, this article aims to describe the costs of interpersonal helping and governing mechanisms that individuals may use to alleviate helping costs.Design/methodology/approachA theoretical analysis was performed by drawing upon TCE and related research.FindingsThrough the lens of TCE, the authors propose the following: First, as the costs of helping increase, interpersonal helping shifts from being triggered by an autonomous motivation to being regulated by contextual contingencies. Second, the helper is likely to utilize reciprocity to mitigate helping costs by acquiring specific assets possessed by the recipient when asset specificity is high. Third, the helper is likely to utilize organizationally sanctioned procedures and rules to mitigate helping costs by eliminating unwanted resource consumptions when outcome uncertainty is high. Finally, the helper is likely to utilize group norms to mitigate helping costs by involving others in helping or discouraging requests for recurrent help when the frequency of helping is high.Originality/valueFrom a theoretical standpoint, this article complements previous research that focuses on the dark side of interpersonal helping. Practically, the authors offer several implications that help managers minimize the costs of helping in the organization.

A transaction cost economics model for estimating performance effectiveness of relational and contractual governance

2016 ◽  
Vol 36 (11) ◽  
pp. 1551-1575 ◽  
Author(s):  
John G. Wacker ◽  
Chenlung Yang ◽  
Chwen Sheu
Keyword(s):  
Problem Solving ◽  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Relative Effectiveness ◽  
Asset Specificity ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Content Type ◽  
Contractual Governance ◽  
Supplier Contracts

Purpose As outsourcing continues to grow, supplier management becomes critical to the success of manufacturing firms. Transaction cost economics (TCE) suggests that firms should choose supplier governance mechanisms to ensure fulfillment of contractual obligations and safeguard against opportunism for their outsourcing activities. Accordingly, the purpose of this paper is to examine how buying organizations govern supplier contracts to improve manufacturing competitiveness and financial performance. The relative effectiveness of two primary governance mechanisms, contractual governance (CG), and relational governance, are examined. Design/methodology/approach Expanding upon previous studies, this study delineates three relational governance mechanisms (negotiation efficiency (NE), problem solving relations, and information sharing (IS)) that are conceptually, statistically and pragmatically different. Based on the TCE literature, a conceptual model is developed to decipher the relationships between pre-contract conditions (supplier asset specificity and environmental uncertainty (EU)), governance mechanisms, performance ambiguity (PA), and performance. Using the data collected from 987 firms, the statistical results present several important findings that would advance current theory and practice in outsourcing. Findings The authors find empirical support for the effects of contractual and relational governance in improving manufacturing and financial performance. The governance of supplier contracts clearly facilitates manufacturers’ ability to leverage their resources to improve performance. The relative effectiveness of these two governance mechanisms is related to the levels of EU and supplier asset specificity. Relational governance displays greater influence on performance than CG does. However, CG appears to be complementary to relational governance. Research limitations/implications The interplays between supplier asset specificity and EU should be examined in the future. The relationships among NE, IS, and problem solving should also be examined to facilitate the development of relational governance. Practical implications Managers should be aware of the situational performance of governance mechanisms. Moreover, it is important to realize how differently each of the three relational governance mechanisms and CG contribute to performance. Originality/value This study extends the academic discussion of supplier governance by investigating the alignment of governance mechanisms (relational governance and CG) with pre-contract conditions to reduce PA and, thereby, enhance manufacturing performance. Under the theoretical framework of TCE, the direct and indirect effects of pre-contract conditions and governance variables are fully examined and discussed. Moreover, relational governance involves multiple mechanisms that are conceptually and pragmatically different, and future studies should not treat it as one single construct.

scholarly journals Governance as integrity

2019 ◽  
Vol 32 (1) ◽  
pp. 67-91 ◽  
Author(s):  
Maria do Rosário Da Veiga ◽  
Maria Major
Keyword(s):  
Common Good ◽  
Design Methodology ◽  
Transaction Cost Economics ◽  
Asset Specificity ◽  
Historical Narrative ◽  
Public And Private ◽  
Content Type ◽  
Un General Assembly ◽  
The Common

Purpose Through a case study on the governance structures of the UN, the purpose of this paper is to develop a critique of Public and Private Bureaucracies Transaction Cost Economics (PPBTCE) (Williamson, 1999) as a theoretical lens to analyze internal oversight structures. Design/methodology/approach The authors explore “probity” and “independence” transactions’ attributes through historical narrative case-based research to answer the question – Why did numerous attempts to strengthen the governance of UN internal oversight structures not relieve “probity” hazards? Findings The analysis shows that at the UN increasing and strengthening the governance of oversight structures, i.e., incentives, did not relieve probity/ethics hazards as predicted in PPBTCE. Secretaries-General and UN General Assembly, entities charged with oversight powers, systematically trumpeted the UN Charter, breaching probity/ethics and disregarding the supervisory independence prerogative of internal oversight structures, hence failing to contribute to the “common good” and to protect the UN mission. Originality/value This paper is the first application of PPBTCE to internal oversight transactions within an International organization context testing probity and independence attributes. The authors find that “independence” outweighs the “asset specificity” attribute whenever decisions on the governance of internal oversight arise. As far as sourcing decisions are concerned, the authority of the sovereign and the independence of the judiciary as well as quasi-judiciary transactions are not transferable attributes and, thus, cannot be contracted along with the actors’ ethics. PPBTCE should be modified to include, e.g. “virtues ethics” behavioral assumption as a transaction costs’ reduction device and explanatory framework for “probity” hazards, abandoning the opportunism behavioral assumption.

Using transaction cost economics to explain open innovation in start-ups

2016 ◽  
Vol 54 (9) ◽  
pp. 2133-2156 ◽  
Author(s):  
Ching-Tang Hsieh ◽  
Hao-Chen Huang ◽  
Wei-Long Lee
Keyword(s):  
Transaction Cost ◽  
Open Innovation ◽  
Structural Equation ◽  
Transaction Cost Economics ◽  
Measurement Model ◽  
Asset Specificity ◽  
Equation Modeling ◽  
Content Type ◽  
Confirmatory Factor ◽  
Start Ups

Purpose The basic concept of transaction cost theory is that firms like to conduct transactions in a channel with lower transaction costs. Therefore, the purpose of this paper is to use the transaction cost perspective to identify which conditions cause companies to choose between outbound open innovation (hierarchy governance) and inbound open innovation (market governance). Design/methodology/approach Accordingly, transaction cost economics was used to relate the choice and implementation of open innovation using a sample of 250 electronics and information start-ups in China. Structural equation modeling was used to conduct confirmatory factor analysis to evaluate measurement model, while logistic regression analysis was used to test the hypotheses. Findings As expected, the dedicated asset specificity, human asset specificity, behavioral uncertainty, transaction frequency, and small number exchange were positively associated with outbound open innovation. Originality/value The contribution of this paper lies in explaining the role played by transaction cost economics in the process of open innovation for start-ups through empirical analysis.

scholarly journals Measuring lean implementation for maintenance service companies

2016 ◽  
Vol 7 (1) ◽  
pp. 35-61 ◽  
Author(s):  
Stephan J. de Jong ◽  
Wouter W.A. Beelaerts van Blokland
Keyword(s):  
Transaction Cost ◽  
Discrete Event Simulation ◽  
Continuous Improvement ◽  
Lean Manufacturing ◽  
Discrete Event ◽  
Asset Specificity ◽  
Lean Implementation ◽  
Content Type ◽  
Event Simulation ◽  
Maintenance Service

Purpose – Implementation of lean manufacturing is currently performed in the production industry; however, for the airline maintenance service industry, it is still in its infancy. Indicators such as work in process, cycle time, on-time performance and inventory are useful indicators to measure lean implementation; however, a financial economic perspective taking fixed assets into consideration is still missing. Hence, the purpose of this paper is to propose a method to measure lean implementation from a fixed asset perspective for this type of industry. With the indicators, continuous improvement scenarios can be explored by value stream discrete event simulation. Design/methodology/approach – From literature, indicators regarding asset specificity to measure lean implementation are found. These indicators are analysed by a linear least square method to know if variables are interrelated to form a preliminary model. The indicators are tested by value stream-based discrete event simulation regarding continuous improvement scenarios. Findings – With the new found lean transaction cost efficiency indicators, namely, turnover, gross margin and inventory pre-fixed asset (T/FA, GM/FA and I/FA, respectively), it is possible to measure operation performance from an asset specificity perspective under the influence of lean implementation. Secondly, the results of implementing continuous improvement scenarios are measured with the new indicators by a discrete event simulation. Research limitations/implications – This research is limited to the airline maintenance, repair and overhaul (MRO) service industry regarding component repair. Further research is necessary to test the indicators regarding other airline MRO service companies and other sectors of complex service industries like health care. Practical implications – The lean transaction cost efficiency model provides the capability for a maintenance service company to simulate the effects of process improvements on operation performance for service-based companies prior to implementation. Social/implications – Simulation of a Greenfield process can involve employees with possible changes in processes. This approach supports the adoption of anticipated changes. Originality/value – The found indicators form a preliminary model, which contributes to the usage and linkage of theories on lean manufacturing and transaction cost theory – asset specificity.

The dark side of digital technology to overtourism: the case of Barcelona

2019 ◽  
Vol 11 (5) ◽  
pp. 582-593 ◽  
Author(s):  
Stéphane Bourliataux-Lajoinie ◽  
Frederic Dosquet ◽  
Josep Lluís del Olmo Arriaga
Keyword(s):  
Design Methodology ◽  
New Technologies ◽  
Secondary Data ◽  
Online Reviews ◽  
Dark Side ◽  
Content Type ◽  
Large Cities ◽  
Tourist Destinations ◽  
Rapid Spread

Purpose This study aims to offer a three-pronged reflection on overtourism in large cities such as Barcelona. The objective is to outline how technology can impact on overtourism and eventually, how to tackle the problem using technology. Design/methodology/approach The research design is based on secondary data (literature and online reviews) and a case study of Barcelona. Findings The most significant aspect is the rapid spread of comments and reviews about attractions and venues. Despite the interest in ICT generalisation, these new technologies have a dark side. Closely linked to fashion trends, some tourist destinations find themselves rapidly overbooked. Originality/value Unlike other studies, this paper reveals a dark side of technology and attempts to use technology to mitigate the impacts of overtourism.

The dark side of effectiveness – risk and crisis as the “destroyer of worlds”

2014 ◽  
Vol 1 (4) ◽  
pp. 338-348 ◽  
Author(s):  
Denis Fischbacher-Smith
Keyword(s):  
Design Methodology ◽  
Management Practices ◽  
Dark Side ◽  
Symbiotic Relationship ◽  
Content Type ◽  
Organisational Effectiveness

Purpose – This paper considers the dark side of organisational effectiveness and the processes by which and organisation can move into a state of crisis. The paper sets out a series of arguments around the relationships between people and processes and the manner in which they contribute to the incubation of crises within organisations. The purpose of this paper is to provide an introduction to many of the issues that are raised in this issue of the journal and calls for more research that explores the relationships between effectiveness and failure. Design/methodology/approach – The paper draws upon a range of literatures to set out the case for considering the negative aspects that surround organisational attempts at achieving effectiveness. In particular, it considers the role of both people and processes in a symbiotic relationship within the incubation of crisis. The paper highlights the importance of innovative practices in bypassing organisational controls. Findings – The paper outlines issues around management practices that serve to focus the attention of practitioners on the ways in which they can contribute inadvertently to the failure of the organisation. In particular, it highlights some of the potential vulnerabilities that can exist within the organisation and which, if unchecked, will result in failure. Originality/value – The paper highlights the need for further research within the field of organisational effectiveness around the ways in which crises can be incubated as part of the normal processes around effective working.

scholarly journals The Argumentational Texture of Transaction Cost Economics

1995 ◽  
Vol 16 (4) ◽  
pp. 605-623 ◽  
Author(s):  
Niels Noorderhaven
Keyword(s):  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Asset Specificity ◽  
Economic Organization ◽  
Economic Institutions

The deconstruction method was used to analyze a seminal text in transaction cost economics, viz., Oliver Williamson's Economic Institutions of Capitalism. This deconstructive reading revealed that the assumption of opportunism that gives rise to the problem of economic organization as formulated by William son also tends to undermine the proposed solution to this problem. The plausi bility of unified governance as a solution to the problem of opportunism in transaction relations with asset specificity is shown to hinge on the temporary deferment of the assumption of opportunism. Thus, transaction cost economics finds itself in an impasse of thought: actors have to be assumed to be both opportunistic and not-opportunistic if the logic of the theory is to be main tained.

The dark side of experience-seeking mall shoppers

2016 ◽  
Vol 44 (12) ◽  
pp. 1206-1222 ◽  
Author(s):  
Mark Scott Rosenbaum ◽  
Mauricio Losada Otalora ◽  
Germán Contreras Ramírez
Keyword(s):  
Empirical Evidence ◽  
Design Methodology ◽  
Word Of Mouth ◽  
Survey Methodology ◽  
Dark Side ◽  
Positive Word ◽  
Content Type ◽  
Financial Benefits ◽  
Positive Word Of Mouth ◽  
Practical Implications

Purpose The purpose of this paper is to illustrate that mall shoppers who participate in a mall’s experiential offerings, including entertainment and activities, do not necessarily exhibit more favorable attitudes or behaviors toward the mall than mall shoppers who do not participate in these offerings. Design/methodology/approach This study employs survey methodology from a sample collected in an expansive regional mall that offers customers experiential activities. Findings The findings show that mall shoppers who partake in mall-based activities are less satisfied, are less likely to spread positive word of mouth, and have lesser desire to return to the mall than shoppers who do not partake in these activities. The findings also reveal that mall expenditures are the same between shoppers who partake in mall activities and those who do not. Research limitations/implications Researchers have argued that malls can compete with digital retailers by offering shoppers experiential activities. Although segments of shoppers partake in these activities, this study finds that experiential investments do not result in significant favorable shopper outcomes. Practical implications Mall developers that implement experiential offerings as a means to combat competition from digital retailers may not attain managerially relevant results from doing so. Originality/value Although retailing academics and consultants espouse the idea that retailers can obtain financial benefits by creating memorable experiences for shoppers, this research offers empirical evidence that counters these speculations. In the case of enclosed malls, investments in experiential features and activities may not lead to improved shopper attitudes, behaviors, or sales.

scholarly journals On sparsity of eigenportfolios to reduce transaction cost

2019 ◽  
Vol 3 (1) ◽  
pp. 82-90
Author(s):  
Anqi Xiong ◽  
Ali N. Akansu
Keyword(s):  
Stock Returns ◽  
Transaction Cost ◽  
Design Methodology ◽  
Asset Returns ◽  
Statistical Characteristics ◽  
Trading Costs ◽  
Content Type ◽  
Reduce Transaction Cost ◽  
Large Size

Purpose Transaction cost becomes significant when one holds many securities in a large portfolio where capital allocations are frequently rebalanced due to variations in non-stationary statistical characteristics of the asset returns. The purpose of this paper is to employ a sparsing method to sparse the eigenportfolios, so that the transaction cost can be reduced and without any loss of its performance. Design/methodology/approach In this paper, the authors have designed pdf-optimized mid-tread Lloyd-Max quantizers based on the distribution of each eigenportfolio, and then employed them to sparse the eigenportfolios, so those small size orders may usually be ignored (sparsed), as the result, the trading costs have been reduced. Findings The authors find that the sparsing technique addressed in this paper is methodic, easy to implement for large size portfolios and it offers significant reduction in transaction cost without any loss of performance. Originality/value In this paper, the authors investigated the performance the sparsed eigenportfolios of stock returns in S&P500 Index. It is shown that the sparsing method is simple to implement and it provides high levels of sparsity without causing PNL loss. Therefore, transaction cost of managing a large size portfolio is reduced by employing such an efficient sparsity method.

scholarly journals Sourcing van Internal Auditing-activiteiten

2005 ◽  
Vol 79 (5) ◽  
pp. 221-228
Author(s):  
H. J. Van Elten
Keyword(s):  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Environmental Uncertainty ◽  
Management Control ◽  
Asset Specificity ◽  
Internal Auditing ◽  
Control Instrument ◽  
Onderzoek Naar

Internal Auditing – traditioneel een intern management control-instrument – wordt in toenemende mate uitbesteed aan externe dienstverleners. In dit artikel wordt verslag gedaan van een onderzoek naar de invloed van Transaction Cost Economics-variabelen op de mate van uitbesteding van Internal Auditing. Ten behoeve hiervan is een schriftelijke enquête verspreid, waaraan is deelgenomen door 66 grote Nederlandse bedrijven. Meervoudige regressieanalyse laat een significant verband zien tussen outsourcing van Internal Auditing-activiteiten, asset specificity en frequency. Deze TCE-variabelen verklaren 57% van de variantie in de mate van uitbesteding van Internal Auditing. Andere TCE-variabelen (behavioral en environmental uncertainty) vertonen geen significante invloed.

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