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- W2242136318 abstract "A firm's choices in governing itself often reflect not only the characteristics of the particular transaction being governed, but also previous choices. In some cases, prior contractual commitments limit the firm's future decisions. The authors coin the term governance to describe such situations. The sources of inseparability are divided into two types of constraint: the governance switching constraint surfaces when previous choices make it difficult for a firm to change its mode of governing a transaction, while the governance differentiation constraint refers to previous decisions that make it difficult for a firm to tailor its arrangements to the specific requirements of the transaction at hand. The theoretical implications of inseparability for transaction cost theory are identified, and it is argued that choices that would be efficient for an isolated transaction may become inefficient if the impacts of related transactions are taken into account; in other words, consideration of inseparability can alter predictions about choices offered by transaction cost theory. The use of market-based or alliance-based forms of that is suggested by inseparability considerations is consistent with a options approach to choice, which emphasizes that some choices can generate real option value. The study of the benefits and costs of contractual commitments is integral to our understanding of firms' strategic choices.(SAA)" @default.
- W2242136318 created "2016-06-24" @default.
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- W2242136318 date "2000-01-01" @default.
- W2242136318 modified "2023-09-28" @default.
- W2242136318 title "The Role of Prior Commitment in Governance Choice" @default.
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