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

Abstract

Purpose

Utilizing 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/approach

A theoretical analysis was performed by drawing upon TCE and related research.

Findings

Through 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/value

From 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.

Citation

Chou, S.Y. and Ramser, C. (2023), "Understanding the costs of interpersonal helping and governing mechanisms: an application of transaction cost economics theory", Journal of Economic and Administrative Sciences, Vol. 39 No. 3, pp. 609-624. https://doi.org/10.1108/JEAS-03-2020-0034