Procurement: The Transaction Costs Perspective in a Globalising World
Abstract
Fragmentation of production into more and more complex supply chains is a prominent feature of globalisation. It implies that transaction costs as part of total costs of ownership carry a large weight in procurement decisions. An analysis of the various types of transaction costs is also essential in the “make or buy” and location decisions in global sourcing. A distinction can be made between “hard” and “soft” transaction costs. Soft transaction costs are difficult to quantify but become more important in strategic business decisions now that formal trade barriers gradually disappear and transport costs are reduced. Business strategies to keep transaction costs low in the long run can also, to a considerable extent, explain socially responsible business conduct from the perspective of rational economic behaviour.Download Info
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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-091/3.Length:
Date of creation: 23 Nov 2007
Date of revision:
Handle: RePEc:dgr:uvatin:20070091
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Web page: http://www.tinbergen.nl
Related research
Keywords: procurement; outsourcing; transaction costs; managing transactions; orchestrating the supply chain;Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Social Responsibility
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-23 (All new papers)
- NEP-BEC-2008-02-23 (Business Economics)
References
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