Browsing by Author "Lage Hansen, Jakob"
Now showing items 1-2 of 2
-
The Role of Governance ChoiceLage Hansen, Jakob (København, 2002)[More information][Less information]
Abstract: The paper provides a general framework for examining how governance choice affects competitive advantage. I argue that firms rely on assets for competing, and that these assets can be accessed by different governance structures (i.e., they can be in- or outsourced). The transaction cost economics framework is used to expose strengths and weaknesses of governance structures with respect to creating and sustaining competitive advantage. The result is a tradeoff to consider when choosing how to access an asset. A number of implications are forwarded, and the usefulness of the framework is demonstrated by means of an application to the famous General Motors - Fisher Body case. This points to the potential of using transaction cost economics in the analysis of competitive strategy, as well as to the shortcomings of the existing transaction cost economics framework in explaining governance choice. The framework also represents a way to integrate transaction cost economics with the resource-based view and industrial organization. 1 URI: http://hdl.handle.net/10398/8133 Files in this item: 1
x656406215.pdf (165.1Kb) -
Lage Hansen, Jakob (København, 2002)[More information][Less information]
Abstract: It is argued that specificity is inadequate to explain hold-up, as the definition is imprecise as to which party incurs a loss if an asset is redeployed. If both parties to a transaction incur a loss when an asset is redeployed, neither party can credibly hold up the other party. Also the concept does not address expectations. It is the expected loss (not the actual loss) of parties that will drive attempts at hold-up. Therefore focusing on specificity when talking hold-up can be misleading. As a consequence the concept of importance is introduced. The importance of an asset to a firm is the expected loss to the firm if access to the asset is lost. Various determinants of importance are discussed by using a formal framework. Implications are forwarded, and it is argued that the relative importance of the parties has to change for hold-up to occur. One-sided specific investments inherently lead to mutual importance, which mitigates hold-up. Situations without specificity can lead to hold-up if expectations are asymmetric. Lastly, hold-up does not imply a hold-up problem. URI: http://hdl.handle.net/10398/6883 Files in this item: 1
linkwp02-13.pdf (181.7Kb)
Now showing items 1-2 of 2