IDEAS home Printed from
   My bibliography  Save this article

Transaction cost economics and business administration


  • Williamson, Oliver E.


This paper traces the origins of transaction cost economics to three seminal people who had an intense interest in business: Ronald Coase, Chester Barnard, and Herbert Simon. By contrast with the neoclassical theory of the firm, which is a top-down construction, the transaction cost economics theory of the firm is a bottom-up construction--which is to say that it is much more microanalytic (the transaction is made the basic unit of analysis) and is comparative in its mode of analysis. Several top-down maxims that have their origins in economic theory are examined in a bottom-up way, which serves to uncover conceptual and/or implementation problems with each. I furthermore examine growing applications of transaction cost reasoning to business administration and within the social sciences.

Suggested Citation

  • Williamson, Oliver E., 2005. "Transaction cost economics and business administration," Scandinavian Journal of Management, Elsevier, vol. 21(1), pages 19-40, March.
  • Handle: RePEc:eee:scaman:v:21:y:2005:i:1:p:19-40

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Ratinho, Tiago & Harms, Rainer & Walsh, Steven, 2015. "Structuring the Technology Entrepreneurship publication landscape: Making sense out of chaos," Technological Forecasting and Social Change, Elsevier, vol. 100(C), pages 168-175.
    2. Oliver E. Williamson, 2005. "The Economics of Governance," American Economic Review, American Economic Association, vol. 95(2), pages 1-18, May.
    3. Hassan, Ibne & Chidlow, Agnieszka & Romero-Martínez, Ana M., 2016. "Selection, valuation and performance assessment: Are these truly inter-linked within the M&A transactions?," International Business Review, Elsevier, vol. 25(1), pages 255-266.
    4. Ranjith Appuhami & Sujatha Perera & Hector Perera, 2011. "Management Controls in Public–Private Partnerships: An Analytical Framework," Australian Accounting Review, CPA Australia, vol. 21(1), pages 64-79, March.
    5. Merkert, Rico, 2010. "Changes in transaction costs over time - The case of franchised train operating firms in Britain," Research in Transportation Economics, Elsevier, vol. 29(1), pages 52-59.
    6. Linda English & Jane Baxter, 2010. "The Changing Nature of Contracting and Trust in Public-Private Partnerships: The Case of Victorian PPP Prisons," Abacus, Accounting Foundation, University of Sydney, vol. 46(3), pages 289-319.
    7. repec:eee:jeborg:v:137:y:2017:i:c:p:1-18 is not listed on IDEAS
    8. Watanabe, Kassia & Zylbersztajn, Decio, 2012. "Building Supply Systems from Scratch: The Case of the Castor Bean for Biodiesel Chain in Minas Gerais, Brazil," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 3(2).
    9. Merkert, Rico & Cowie, Jonathan, 2012. "A quantitative cross-modal analysis of transportation firms’ transaction costs – Are airlines any different?," Journal of Air Transport Management, Elsevier, vol. 22(C), pages 3-8.
    10. Grazyna Smigielska & Anna Dabrowska & Malgorzata Radziukiewicz, 2015. "Fair Trade in Sustainable Development. The Potential for Fair Trade Market Growth in Poland," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(Special 9), pages 1244-1244, November.
    11. Wang, Chao-Hung, 2014. "How relational capital mediates the effect of corporate reputation on competitive advantage: Evidence from Taiwan high-tech industry," Technological Forecasting and Social Change, Elsevier, vol. 82(C), pages 167-176.
    12. Merkert, Rico & Hensher, David A., 2014. "Open access for railways and transaction cost economics – Management perspectives of Australia's rail companies," Research in Transportation Economics, Elsevier, vol. 48(C), pages 227-236.
    13. Mettepenningen, E. & Beckmann, V. & Eggers, J., 2011. "Public transaction costs of agri-environmental schemes and their determinants--Analysing stakeholders' involvement and perceptions," Ecological Economics, Elsevier, vol. 70(4), pages 641-650, February.
    14. Oliver E. Williamson, 2010. "Transaction Cost Economics: An Overview," Chapters,in: The Elgar Companion to Transaction Cost Economics, chapter 2 Edward Elgar Publishing.
    15. repec:bla:acctfi:v:56:y:2016:i:4:p:1041-1070 is not listed on IDEAS
    16. repec:eee:tefoso:v:127:y:2018:i:c:p:271-280 is not listed on IDEAS
    17. Gabor, Andrea & Mahoney, Joseph T., 2010. "Chester Barnard and the Systems Approach to Nurturing Organizations," Working Papers 10-0102, University of Illinois at Urbana-Champaign, College of Business.
    18. Karl, Helmut, 2015. "Koordination raumwirksamer Politik: Einleitende Einführung in die Beiträge des ARL-Arbeitskreises," Forschungsberichte der ARL: Aufsätze,in: Koordination raumwirksamer Politik: Mehr Effizienz und Wirksamkeit von Politik durch abgestimmte Arbeitsteilung, pages 1-6 Akademie für Raumforschung und Landesplanung (ARL) - Leibniz-Forum für Raumwissenschaften.
    19. repec:eee:jbrese:v:76:y:2017:i:c:p:14-23 is not listed on IDEAS
    20. Marta Peris-Ortiz & Fernando Peris Bonet & Carlos Rueda-Armengot, 2011. "Vertical integration in production and services: development in transaction cost economics," Service Business, Springer;Pan-Pacific Business Association, vol. 5(1), pages 87-97, March.
    21. Merkert, Rico & Nash, Chris A., 2013. "Investigating European railway managers’ perception of transaction costs at the train operation/infrastructure interface," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 14-25.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:scaman:v:21:y:2005:i:1:p:19-40. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.