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According to TCE, different forms of economic organization – markets, hierarchies, hybrid forms of various kinds, etc. – are characterized by different “syndromes of attributes,” or coherent sets of features (Williamson, 1991). Because each form of organization implements a distinctive set of governance features, each is efficient for a different type of transaction, implying trade-offs among the forms. The two key categories of features are the allocation of decision-making authority among and within firms and the intensity of the incentives facing firms and members of them. By concentrating decision-making authority, hierarchies have the benefit of facilitating “cooperative adaptation”; that is, coordinated change among two or more parties. Adaptation to new economic circumstances is, after all, the main function of an economic system (Hayek, 1945). Hierarchies are said to facilitate cooperative adaptation better than markets because unlike for markets, courts will not intervene in internal disputes and fiat is available as a last resort. This leaves more scope for the management hierarchy to use its authority to promote cooperative adaptation to unanticipated circumstances (Williamson, 1975, 1991). On the other hand, hierarchies feature weaker incentive intensity, that is, weaker links between individual or unit performance and individual or unit reward. This is because market-like levels of incentive intensity would inhibit cooperative adaptation by stimulating “autonomous adaptation” instead. Autonomous adaptation refers to adaptation by individual firms or organizational members that occurs without regard to its effects on other parties. Williamson (1985) also argues that market-like incentives lack credibility within hierarchies due to the ultimate availability of fiat. Thus, for TCE, the most fundamental trade-off between various forms of internal organization is between cooperative adaptation and incentive intensity.

The central organizing principle for this volume – the industry life cycle model – is so widely accepted and its basic premises so taken for granted that it has become conventional wisdom in business. Executives in a range of industries use the model to guide their thinking about when and how to invest in various industries. Diversification decisions, for example, are often made on the basis of life cycle logic, especially as large, established companies seek high-growth opportunities for investment.

This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.

The purpose of this study is to examine backsourcing, which refers to the full or partial re-internalization of a firm’s previously outsourced activity. Researchers have primarily focused on the drivers of backsourcing, but this paper builds on that prior research to develop a typology of backsourcing.

Drawing on transaction cost economics and the resource-based view (RBV), the paper posits that firms backsource because of two factors – changes in their short-run total costs and changes in their internal capabilities for re-internalization. By using the interactions between these two factors, the authors propose four types of backsourcing.

The paper presents a typology for backsourcing: profitability-backsourcing, operational-backsourcing, strategic-backsourcing and failure-backsourcing. Only one (failure-backsourcing) of these four types of backsourcing suggests failure, while the other three indicate strategic flexibility. The authors also present mini-cases to support the typology.

The paper presents a conceptual model of backsourcing. This is a limitations of the study and further research is needed to empirically test the proposed model.

From a managerial perspective, this framework can be used as a decision-making tool for firms that are considering backsourcing. Given the complexity involved and the perceived stigma, decision-makers may find it difficult to backsource. Thus, a framework to avoid biases leading to decision-making errors, as well as to understand if backsourcing is a viable option, is needed.

This paper is one of the first to present a typology of backsourcing which can be used to understand when it is a failure of the outsourcing strategy and when it is a signal of strategic flexibility. This paper contributes to the growing stream of research on backsourcing by moving the literature beyond determinants and bringing attention to the outcomes of backsourcing. Additionally, the proposed framework can be used as a tool by decision-makers to examine whether backsourcing is favorable for their firm based on costs and capabilities for re-internalization.

Although existing partial theories contribute to scholarly understanding of strategic alliances, the lack of a comprehensive framework to explain strategic alliances is unfortunate. The purpose of this paper is to develop an integrated framework for maker‐buyer strategic alliance performance.

Drawing on the concept of embeddedness developed by Granovetter, this paper argues that maker‐buyer alliances are economic actions intended to pursue synergies; meanwhile, these economic actions are embedded in social contexts.

This paper argues that the economic goal of firms entering alliances is to combine their complementary resources to create synergies. To achieve this goal, managers must efficiently manage the economic problems associated with such alliances, including searching for partners with complementary resources, allocating value‐added activities correctly, establishing efficient interorganizational routines, and introducing proper governance structures. Furthermore, alliances are embedded in their social contexts. Firms are constrained by their specific social environments and behave accordingly, impacting their performance. It is difficult for firms to modify the contexts in which they are embedded without strong strategic intent. The social contexts in which firms are embedded may also be sources of sustainable competitive advantage or disadvantage.

Several managerial implications and future research directions are presented.

This study, by integrating economic and sociological theories into a framework and focusing on maker‐buyer alliances, depicts not only the full picture but also the necessary details of maker‐buyer alliances for scholars and practical managers.

This paper argues for the benefits to international business (IB) of taking a much longer view at the engagement by multinational enterprises (MNEs) with host locations.

The authors showcase a project tracking the engagement by MNEs with Australia over the past two centuries. Extensive archival work has been undertaken to identify and document modes of entry, home countries, industries, operational modes and company types among the MNEs operating in Australia. The authors also describe the shifting nature of Australia as a host location.

The authors demonstrate the historical and ongoing diversity of ways in which MNEs interact with a host. They show that different organisational forms have prevailed over time, and that considerable operational mode changes can best be observed when a long lens is adopted. The authors show how these mode changes interact with host country dynamics, and also the broader context of the MNE and its altering strategies.

The authors urge IB scholars to embrace longer timeframes to capture the complexity of MNEs’ growth and adaptation more meaningfully.

By taking such a long-run perspective, the authors shed new light on the importance of moving beyond simple snapshots to analyse key IB constructs and phenomenon.

To assess the impact of TCE on the field of strategy, we first quantified the distribution of TCE-related research articles across all disciplines and fields. Specifically, we identified every article that appeared in a journal included in the Institute for Scientific Information's (ISI's) Web of Knowledge between 1975 and 2008 and that included among its keywords some variation of “transaction costs.” We then removed those articles for which this term clearly did not refer to transaction costs of the Coasean kind (primarily articles in finance and computing, for which “transaction cost” has a different meaning). Finally, we categorized each journal according to its discipline or field. Granted, this requires some judgment, but we attempted to be objective in our categorizations.¹ As Table 1 shows, articles that are self-described as part of the TCE research stream have appeared more frequently in strategy journals than in the journals of any other discipline or field. We interpret this as evidence of TCE's impact on strategy, and of the importance of the strategy field to TCE.

The purpose of this paper is to determine whether one can infer the identities of specific business and management coursework topics that owner/managers of wineries want to have addressed by a wine industry‐specific educational institution by assessing upstream and downstream vertical integration strategies of their respective wineries.

Exploratory empirical research involves the gathering of relevant information by way of telephone interviews and using closed end questions. The theory of the resource‐based view (RBV) of the firm is the theoretical framework that was employed in developing relevant hypotheses.

The results demonstrate that one can predict the types of business and management courses that owner/managers of wineries want to have offered by assessing realized upstream and/or downstream vertical integration strategies of their respective wineries.

The research creates a bridge between research involving the RBV and the identification of needs of persons in various parts of the wine value chain. Such persons might either become involved in conceiving and/or rendering wine industry‐specific business and management instruction, or benefit by taking business coursework that has been established as relevant for them by this research.

This chapter explores the origins of the theme of competitive advantage in 19th and early 20th century economics. This theme, which forms the core of modern Strategic Management, was a battleground for debates about the value of abstract theory versus observations about real-life events. Intellectual genealogies, citations, and other sources show the central roles played by the University of Vienna and Harvard University. These two institutions strongly influenced the theory of monopolistic competition as well as all three modern views of competitive advantage – the industrial as expressed by Porter, the resource-based as expressed by Penrose, and the evolutionary as expressed by Schumpeter.