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Critically assess theories of Transaction Cost Economics and Resource Based View in terms of their usefulness in explaining firms internationalising strategies. Illustrate your answer with reference to at least two case companies - Essay Example

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This can only be realized if the firm is well organized. The organization in the firm encompasses laying out plans that are well implemented from the managerial level to the lowest part of the office. These…
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Critically assess theories of Transaction Cost Economics and Resource Based View in terms of their usefulness in explaining firms internationalising strategies. Illustrate your answer with reference to at least two case companies
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Extract of sample "Critically assess theories of Transaction Cost Economics and Resource Based View in terms of their usefulness in explaining firms internationalising strategies. Illustrate your answer with reference to at least two case companies"

Download file to see previous pages These strategies are very useful. This paper will delve on Transaction Cost and Resource Based theories to explain the significance of the internalized business strategies.
In the world of economics, transaction cost is described as the cost which is incurred in the event of an economic exchange (Alaghehband et al, 2011 p 126). The economic exchange can also be referred to as the cost that one undergoes for having participated in market. Transaction cost is categorized into three broad parts. Search and Costs of Information are ideally the costs that are incurred when determining that the needed goods is present in the market or has the least price. Bargaining costs entails the costs that are needed to create an agreement that is accepted with the next party for transaction and draws appropriate contract.
A person who purchases a used car is prone to face different costs of transactions (Alaghehband et al, 2011 p 130). The search cost will entail the finding of that particular car. It will also encompass the costs incurred when determining the conditions of the car. The bargaining costs will entail the costs gone through during the negotiation of the price between the buyer and the seller. Lastly, the policing cost and enforcement comes in whereby the car is to be delivered eventually to the buyer and it must be having the conditions that were promised.
A supplier is bound to make a bid in an environment that is very competitive with a client so as to ensure the building of a widget ((Alaghehband et al, 2011 p 129). Nevertheless, in making the widget, the supplier will have to build machinery that is very special and cannot be redeployed easily in making other products. As soon as the contract has been awarded to that particular supplier, the customer-supplier relationship evolves from the normal competitive environment to now a monopolistic or monopsony. This relationship is bilateral monopoly. This implies that the customer owns a ...Download file to see next pagesRead More
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