Connecting Streams

Question 1

TCE to Institutional Theory

Answer 1

Does change result from isomorphism or efficiency considerations
- institutional theory typically eschews efficiency motivation and in this respect is clearly at odds with TCE

Question 2

TCE & Pop Ecology

Answer 2

TCE & Pop Ecology are at odds with each other, population ecologists view organizational structures as highly
inertial and resistant to change, TCE theorists as make or buy decision altering change quickly.
Bringing these together Park (1996) investigated Joint Ventures found that organization failure rates decline accordingto both TCE and Pop Ecol “age dependence” hypotheses

Question 3

TCE & RBV

Answer 3

In contrast, TCE suggests that there are multiple ways in which excess assets may be utilized, including contracting these assets to outside parties and/or spinning them off into stand-alone enterprises (Teece 1980).

Several scholars have looked at the intersection of TCE and firm capabilities. Leiblein and Miller (2003) find firm capabilities have a statistically and economically significant impact on outsourcing decisions, even after controlling for transaction costs. Mayer and Salomon (2006) find that outsourcing to partner firms is more likely if firms possess superior capabilities, while Hoetker (2005) similarly finds outsourcing is more likely if partners possess superior technical capabilities. In the former case firm capabilities help shape governance capabilities in selecting, monitoring and sharing knowledge with suppliers, while in the latter case supplier capabilities free firms from additional investment in time and resources.

Question 4

TCE & Strategic Positioning (Porter)

Answer 4

SP and TCE, if examined in isolation, lead to inferior
statistical performance as compared with a joint positioning-economizing lens which better predicts firms’ choices around market position, resource profile and organization. (Nickerson, 2001)

Question 5

Institutionalism to Rational Systems (via technological change)

Answer 5

• QWERTY keyboard invented in the late 1800s - originally designed to slow typists down because of constant typewriter jamming.
• DVK keyboard later invented, was shown by time and motion studies to be far superior to QWERTY (once the jamming issue had been resolved via technology)
• However QWERTY pursuits due to institutional forces. It has been institutionalized.

Question 6

Institutionalism/Pop Ecology & Dominant logic

Answer 6

• Institutional logic shapes/restricts choices similar to dominant logic
• DNA, evolution

Question 7

Short Term Memory Card

Answer 7

Cassar (2004) TCE - proportionately high costs exclude small firms from IPOs