Theory of Transaction Cost Economics

Introduction

What is theory?

Transaction cost is any payment that is given out in an economic exchange. Transaction cost can be used to study the planning and research of property. Transaction cost theory helps to explain the institutional change. These costs provide tools that aid in learning about institutions and comparing how theories are arranged.

Boundaries of theory

This theory is based on the planning and research of property, importance of planning and also the structural appearance of institutions in the transaction cost economics.

Variables, constructs and relationships.

Since the interest has increased in transaction cost economics based on the theory. This mostly in planning and property researches are not common to happen. The reason for the study is to expound on the size, distribution and existing of transaction cost. It does not show the exact numbers of the costs or the amount.

This makes it almost unattainable since the cost are hidden, not direct and are not given quantity by those involved in developing the process. The planning practice plays an important role in land use decision that is by identifying useless costs. The identification of the loss of money will enable in planning efficiently. The evaluations can be done in policy and institutions. Also there is the structural nature of the institutional and transaction costs which are divided into levels of operation. The focus is on the levels at which transaction cost will be produced.

In conclusion, this theory is excellent since it gives the development process that is by planning well on the decision making process (Buitelaar & Wiley, 2007).

Case assignments

Case1

In this case the author is using qualitative approach since the argument here is inductive in that it has a constructed reality. The involvement of the decision makers in practicing the managing of quality that brought about many doubts on which practice to be given more weight. This lead to construction of a framework for the quality management and the Infrastructure for a better use. This uses two analysis concepts such as path and multiple regressions that are used to test models as well as coefficients. The weak links are removed and also the model shows quality market results that are related statistically. The measures of quality performance have competition. Infrastructure includes managing the support and labour force. The difference in quality management leads to succeeding of different qualities.

In this case the researcher could also use pragmatic approach which has mixed methods. We should follow the life cycle so as not deviate from the objective. The objective might not be fully covered and the flow of the research of the theory would not connect if we do not follow the life cycle (Flynn, Schroeder & Sakakibara, 1995).

Case2

In this case the Author uses quantitative approach; this is shown by the use of data in numerical form. The statistics can be used to make conclusion. The author tries to explain the factors that determining system usage and their corresponding demerits.

The factors  have some functions with their disadvantages. For instance Behavioral intention shows predictions by resolving the differences between beliefs and other characters. This is known as a way of determining behaviors such as use of system which also has some disadvantages. The author points out some of limitations according to behavioral intentions, behavioral expectations and facilitating conditions in the use of system by giving better ways to use it.

The author could have also used pragmatic research approach to explain the theory of determinants of behaviors. This approach is free to explain a theory in a mixed up way in that it can use any of the approaches therefore the author has the freedom using it in their research. Since the their no limitation in the use of pragmatic approach the author has the power to expound on the theory in many ways. Here techniques of different nature could be used.

In conclusion, following the life cycle aids in the flow of the research of the author thus giving the good connection of the ideas (Venkatesh, Brown, Maruping & Bala 2008).

Case3.

The author uses qualitative approach to explain the influence of leaders’ behaviors to those that happen to be on their side. This is shown on the article by the author. The leaders should be good example to others, united, guide and also involve people in the governing.

Participatory approach could also be used to explain leaders’ behaviors in their governing process. The use of this approach would enable to respond to certain situations that are favorable to people.

In conclusion, the life cycle is followed for the flow of the research in that if there is no life cycle the theory would not convey the message in the right way (Huettermann, Doering & Boerner 2014).

 

 

 

 

 

 

 

 

 

 

 

 

Reference

Buitelaar, E., & Wiley InterScience (Online service). (2007). the cost of land use decisions: Applying transaction cost economics to planning & development. Oxford: Blackwell Pub.

Flynn, B. B., Schroeder, R. O., & Sakakibara, S. (1995). The Impact of Quality Management Practices on Performance and Competitive Advantage. Decision Sciences, 26(5), 659-691.

Huettermann, H., Doering, S., & Boerner, S. (2014). Leadership and team identification: Exploring the followers' perspective. Leadership Quarterly, 25(3), 413-432. doi:10.1016/j.leaqua.2013.10.010

Venkatesh, V., Brown, S. A., Maruping, L. M., & Bala, H. (2008). PREDICTING DIFFERENT CONCEPTUALIZATIONS OF SYSTEM USE: THE COMPETING ROLES OF BEHAVIORAL INTENTION, FACILITATING CONDITIONS, AND BEHAVIORAL EXPECTATION. MIS Quarterly, 32(3), 483-502.