In recent years, the beef industry has been forced to examine improving supply chain coordination in order to respond to the declining consumer demand for beef. Exploring the different supply chain structures being used by beef industry participants to improve coordination and provide consumers with differentiated beef products is important. The problem is that it is not clear how the different attributes often included in branded beef programs affect transaction costs and result in the formation of particular supply chain structures. This thesis examines what makes a successful supply chain alliance in the beef industry. Essentially, this study examines the sustainability and effectiveness of different alliance types and their ability to coordinate various branded beef programs and the product attributes included under these programs. A predictive transaction cost model is developed, which examines how different product attributes result in the emergence of particular transaction characteristics. The model shows how the structure of the supply chain adapts in order to minimize the associated transaction costs. In order to better understand the relative importance of different transaction characteristics to supply chain participants, a two-part empirical study was conducted. In the first portion of the study the relative importance of key transaction characteristics to cow-calf operators was examined through the use of conjoint analysis. The results from the conjoint analysis indicate that certain transaction characteristics, namely asset specific investments, limit the willingness of cow-calf operators to participate in alliances due to the associated transaction costs. Cow-calf operators placed an emphasis on premiums, which shows that while they are willing to make trade-offs and accept increased costs, associated with asset specific investments and price uncertainty, they are only willing to do this when benefits are greater than costs. To further understand the importance of different transaction characteristics to supply chain participants, key managers and directors of different beef alliances throughout Canada and the United States were interviewed. Based on the interviews it appears that alliances have typically limited the level of asset specific investments required. Consequently, the degree of coordination is not affected to, any great extent, by the level of investments required. Instead, the degree of coordination appears to more a result of how an alliance is aligned with a particular brand name label. It appears that greater coordination occurs when an alliance owns a brand name label or is an exclusive supplier to a brand name label, as there is a higher risk of opportunistic behaviour and, as a result, higher transaction costs. The use of grid-based pricing systems and the number of buyers/sellers in the market did not appear to have a significant affect on the method of coordination chosen. Based on the results obtained from both the cow-calf operator conjoint-based analysis and interviews with alliance members this thesis identifies several critical success factors and challenges to improving coordination in the beef industry. Most significantly, when developing alliances it is necessary to understand the importance of different transaction characteristics to supply chain participants. This research demonstrates that supply chain participants in the beef industry are willing to make trade-offs between the benefits received from improved coordination and the transaction costs that arise, as long as the benefits exceeds the increase in costs.

In recent years, the beef industry has been forced to examine improving supply chain coordination in order to respond to the declining consumer demand for beef. Exploring the different supply chain structures being used by beef industry participants to improve coordination and provide consumers with differentiated beef products is important. The problem is that it is not clear how the different attributes often included in branded beef programs affect transaction costs and result in the formation of particular supply chain structures. This thesis examines what makes a successful supply chain alliance in the beef industry. Essentially, this study examines the sustainability and effectiveness of different alliance types and their ability to coordinate various branded beef programs and the product attributes included under these programs. A predictive transaction cost model is developed, which examines how different product attributes result in the emergence of particular transaction characteristics. The model shows how the structure of the supply chain adapts in order to minimize the associated transaction costs. In order to better understand the relative importance of different transaction characteristics to supply chain participants, a two-part empirical study was conducted. In the first portion of the study the relative importance of key transaction characteristics to cow-calf operators was examined through the use of conjoint analysis. The results from the conjoint analysis indicate that certain transaction characteristics, namely asset specific investments, limit the willingness of cow-calf operators to participate in alliances due to the associated transaction costs. Cow-calf operators placed an emphasis on premiums, which shows that while they are willing to make trade-offs and accept increased costs, associated with asset specific investments and price uncertainty, they are only willing to do this when benefits are greater than costs. To further understand the importance of different transaction characteristics to supply chain participants, key managers and directors of different beef alliances throughout Canada and the United States were interviewed. Based on the interviews it appears that alliances have typically limited the level of asset specific investments required. Consequently, the degree of coordination is not affected to, any great extent, by the level of investments required. Instead, the degree of coordination appears to more a result of how an alliance is aligned with a particular brand name label. It appears that greater coordination occurs when an alliance owns a brand name label or is an exclusive supplier to a brand name label, as there is a higher risk of opportunistic behaviour and, as a result, higher transaction costs. The use of grid-based pricing systems and the number of buyers/sellers in the market did not appear to have a significant affect on the method of coordination chosen. Based on the results obtained from both the cow-calf operator conjoint-based analysis and interviews with alliance members this thesis identifies several critical success factors and challenges to improving coordination in the beef industry. Most significantly, when developing alliances it is necessary to understand the importance of different transaction characteristics to supply chain participants. This research demonstrates that supply chain participants in the beef industry are willing to make trade-offs between the benefits received from improved coordination and the transaction costs that arise, as long as the benefits exceeds the increase in costs.

Fibre sourcing is a critical strategic question for all sawmills and pulpmills, but the degree of supply integration though long-term contracts and forest ownership varies widely. The purpose of this research was to investigate the extent to which forest-mill integration patterns can be explained by the transaction cost economics (TCE) theory. TCE theory holds that organizations will choose transaction governance forms that minimize transaction costs. The TCE factors expected to influence that choice can be grouped into three categories; transaction frequency, market uncertainty, and asset specificity. Interviews with various industry representatives suggested that factors from all three categories are relevant to the question of forest-mill integration. A survey was conducted of mills in New Zealand and Sweden, providing data on their supply mix and various TCE factors. Of an estimated population of approximately 450 mills, 136 mills were sampled and 88 responded to the survey. Fractional logit models were developed to explore the factors that may influence the integration decision. Considerable evidence was found for the importance of TCE factors in driving fibre supply integration. The evidence was strongest for factors related to asset specificity, including forest owner concentration and the specificity of a mill's fibre requirements. Transaction frequency appears less important; while integration was found to be significantly associated with the number of mills an organisation has within the supply basin, the influence of mill capacity was found to vary. There was weak evidence for the importance of uncertainty, and perhaps only through the impact of forest owner concentration on market conduct. Integration was found significantly higher for pulpmills than sawmills, and higher in Sweden than in New Zealand. The latter result is difficult to explain by TCE theory, and suggests that non-TCE factors play a significant role. Survey responses also indicated that non-TCE factors are important. Further research is required to enlarge the sample size and better understand the role of TCE factors in forest-mill integration.

Magister Economicae - MEcon / The main objective of this research was to measure and compare the influence of institutions (government laws, rules, regulations) on the transaction cost of establishing microenterprises in informal/township areas and suburbs. The research target area was Maitland (a suburb) and Joe Slovo (a township area). A research framework was developed using the theories of institutions and the TACE. In order to achieve the research objectives, both quantitative and qualitative research designs were used. A total research sample of 40 microenterprise owners were selected from these two areas. A random sampling technique was used to select half (twenty) microenterprise traders in Maitland and the other half (twenty) from Joe Slovo. The research also applied non-random sampling technique to select relevant government institutions that regulate microenterprises in these two areas. The research has collected both primary and secondary data. To collect the primary data, face-to-face interviews were held with the shop owners in the two research sites and government (City) officials. A questionnaire containing both open-ended and closed-ended questions was used in collecting the primary data. The secondary data was collected using desktop (internet) search and also physically searching government archives and publications. Descriptive statistics (frequency distributions and graphical representations) of the data were used to analyze and compare the data collected in a meaningful way. The research also used non-parametric independent samples t-test to compare the differences of the transaction costs of establishing microenterprises in Joe Slovo and in Maitland. The data collected was analyzed and compared using SPSS statistical research analysis software. The results show, to establish a microenterprise business, microenterprise owners in both formal and informal areas need to comply with the environmental health laws. In addition to complying with the environmental health laws, microenterprises in formal areas are obliged to comply with the City zoning scheme and seek permission to establish businesses in these areas. The application process for seeking the City zoning approval is cumbersome and subjective. The results show that entrepreneurs in informal/township areas are automatically allowed by the local government to establish microenterprises in these areas and need not comply with the Zoning Scheme. The main findings of the study reveal that microenterprises in formal suburbs face higher TACs in establishing businesses in these areas when compared to those in township areas.

In the Gulf of Mexico offshore exploration and production (E&P) industry, oil company decision-makers desire to drill wells for exploration or development purposes. While a number of organizational arrangements are employed by firms in the E&P industry, most drilling arrangements can be categorized as one of two types of organizational structure based upon the allocation of planning and supervision responsibilities. Companies can employ internal drilling organizations (best-efforts) to plan and manage their drilling operations or choose to contract externally (turnkey) for these activities. The decision made by the exploration and production company as to which organizational form to employ can have significant impacts on the efficiency and profitability of any given well or drilling campaign. This research examines this choice of governance structure. This paper will examine the drivers of this decision using the theory of transaction cost economics. Regression models are specified and estimated for the turnkey drilling decision, and for the underlying cost functions of best-efforts and turnkey drilling. Results provide support for the transaction cost hypothesis as significant in the choice of governance. / text

Thesis (Ph.D.)--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2014. / The business literature has long heralded franchising as an economically efficient business strategy for sustainable job, wealth and value creation, economic transformation and small business development. However, opportunism, being the tendency of the parties involved in the franchise relationship to act in their self-interest at each other’s expense resulting in misaligned incentives, may undermine the long-term efficacy of the franchising system. Such opportunism may be enacted at different times by either the franchisor or the franchisee. For the above reasons, this thesis focuses on the role of opportunism, a key aspect of Transactions Cost Economics theory, within the franchising system. Following an extensive review of the franchising, opportunism and related literatures, the thesis goes on to theorising and investigating a two-dimensional conceptualisation of opportunism, namely ‘opportunistic orientations’ and ‘opportunistic actions’. Secondly, the thesis theorises and investigates various key antecedents and consequences of opportunistic orientations (OO) and opportunistic actions (OA) from the perspectives of both franchisors and franchisees. Ultimately, this thesis proposes an integrated model combining structural, contextual and strategic factors as antecedents affecting OO which, in turn, leads to OA. The model further proposes that OA impact the growth, competitiveness and survival of franchise systems. In order to test this model, this thesis used a mixed methods strategy to undertake empirical fieldwork conducted separately among x franchisors and franchisees. The franchisor study was based on questionnaire data gathered from 111 purposefully sampled franchisors analysed principally through multivariate correlational techniques including structural equation modelling and canonical correlations. The franchisee study involved gathering semi-structured interview data from a purposeful sample of 30 Johannesburg-based franchisees, analysed through content analysis. To a large extent, while the results of the empirical fieldwork supports the proposed model as outlined above, the results of the franchisor study produced some unexpected outcomes. These relate mainly to the findings that structural and strategic factors directly affected the competitiveness of franchise systems and that contextual and strategic factors also directly affected the growth and survival of franchise systems and not through the intervening variables, that is, OO and OA. These findings suggest that structural, contextual and strategic factors may create entrepreneurial orientations (EO) and not OO within franchise systems. Nevertheless, this thesis makes several important and unique contributions to the study of franchising in South Africa, possibly with broader applications elsewhere, which include the following: - extending the opportunism construct by conceptualising the OO notion which helps to increase understanding of the manifestation of opportunism as a central problem within franchise relationships; xi - examining the antecedents and consequences of OO and OA in the same model to test the opportunism-performance hypothesis probably as the first study to do so among franchisors and franchisees in general and particularly in this country and continent; - applying TCE and RET theories to explain OO and OA and strategies to curb or minimise it within franchise relationships; and - incorporating some aspects of the country’s marriage laws into the franchise relationship to provide for secured tenure among franchisees by expunging the expiry clauses from franchise contractsWithin the context of Relational Exchange Theory, this thesis mainly and uniquely suggests the use of: - psychological contracts between franchisors and franchisees to help align the incentives of these parties largely through mutually agreed norms of acceptable behaviour, role expectations and objectives; - independent and statutory bodies such as the Commission for Conciliation, Mediation and Arbitration (CCMA), law societies and medical or nursing councils as dispute resolution mechanisms to help mediate or resolve franchising disputes fairly, quickly and cheaply; and xii - “evergreen” franchise contracts which make no provision for expiry clauses to attenuate opportunism among franchisees through secured tenure. On the whole, this thesis recommends the use of the above interventions as governance mechanisms to help improve franchisor-franchisee relationships and the reputation of franchising in South Africa by aligning the incentives of the parties and creating an environment in which franchise relationships can flourish. Finally, the thesis also implores future researchers to investigate the impact of existing legislation such as the Consumer Protection Act and the measures suggested above on franchising in this country and the rest of the continent; and the relationship between EO and the growth, competitiveness and survival of franchise systems.

The construction industry has been identified with fragmentation, adversarial relationships, opportunism, and high rates of disputes. Therefore, there has been a call for the improvement of inter-firm relations in the sector through more appropriate governance strategies. This study drew upon transaction cost economics theory and new economic sociology in relation to the problem of inter-firm opportunism in economic relations. The study argues that depending on how patterns of inter-firm opportunism are viewed, different governance strategies may be formulated. Through a critical review of the prior publications concerning the problem of opportunism in the sector, the study argues that the construction management literature used theoretical works at both normative and explanatory levels. However, little is known about the construct of inter-firm opportunism itself and how it materialises within the construction industry. Therefore, this study aimed to provide insights into how practitioners in the construction industry conceptualise inter-firm opportunism and its patterns. Such insights extend the knowledge of how they approach governance strategies, and generally why they do what they do. To build a conceptual framework of inter-firm opportunism in the construction industry, this study was guided by a constructivist grounded theory. Rich qualitative data were constructed through 20 semi-structured interviews with practitioners involved in the construction industry who were working in the UK in either construction law firms, construction companies, construction development companies, or construction consultancy firms. The qualitative data were analysed following the Charmaz (2003 and 2006) guideline. In relation to the construct of inter-firm opportunism, the findings of the study indicate that there are considerable variations between the constructs of inter-firm opportunism. However, regardless of these variations, a win-lose relationship feeling is central to practitioners’ construct of inter-firm opportunism. The study argues that in response to the risk of inter-firm opportunism through setting up contractual governance, parties usually conduct a casual cost-benefit trade-off. In relation to the patterns of inter-firm opportunism from the points of view of the practitioners in the sector, the study provides a conceptual framework grounded in the data. This framework places emphasis on the dynamics of different types of power constructed between the client and its first tier suppliers in the pre- and post- contract stages. This framework is the study’s contribution to the body of knowledge concerned with the inter-firm relations in the construction industry.

Major defence projects have a reputation of cost increases, time delays and in some cases not meeting user requirements. The aim of this study was to discover the factors which create the difficulties in UK defence acquisition projects. The dataset used in this research are seventeen, National Audit Office: Value for Money reports of major defence projects. Qualitative Software NVivo 8 was used to organise passages from the reports into categories of factors representing the defence acquisition process. A content analysis method was applied to the categories in order to highlight their quantitative and qualitative significance. A Transaction Cost Economics approach was taken to formulate the research propositions, which were tested using the qualitative content analysis.The fundamental transformation in defence procurement leads to post-contract asset specificity. There is a lack of substitute suppliers in defence procurement due to the high switching costs. There are three reasons given for this development in defence: (1) a legacy of the privatisation policy in the defence industry; (2) ownership transfers of specialised assets under the prime contracting approach and; (3) the transaction-specific investments by the MoD. The prime is able to take advantage of transaction-specific and relation-specific investments in the transaction for future contract tenders, due to the pre-contract asset specificity which results. This sequence of events is identified as the cause of the bilateral dependency condition in defence acquisition.Uncertainty and asset specificity, to a lesser extent, were identified as the major causes of transaction-costs in defence acquisition. These transaction-costs were given as the causes of failures in meeting the value for money criteria of defence projects. The MoD has responded, in recent time, to project failure through a governance trade-off from a traditional market-based transaction towards a bilateral governance approach. A focus of this bilateral governance approach is the application of Smart Acquisition principles and the IPT mechanism (joint MoD-Industry teams). In order to strengthen and support the IPT mechanism it is argued that a relational contracting approach should be taken. Traditional contracting approaches weaken the joint team working, whereas relational contracting applies partnership principles of better communication, cooperation and collaboration.

No description available.

Business-to-business relationships within sustained monopolies, such as those within Defence Procurement, have received limited attention by Management Researchers. This is unusual because under these market circumstances typically there appear to be few incentives to achieve mutually beneficial outcomes despite their strategic policy importance. The purpose of this thesis is therefore, to determine the influential relationship factors between the UK Ministry of Defence and its Industrial partners within a predominantly monopolistic Defence Procurement business. The approach adopted for this research project is exploratory and inter-subject area. It uses quantitative and supportive qualitative data to examine the problem through an economic model using Supply Chain Management, Relationship Marketing and Transaction Cost Economics. A self-selected census of 54 business relationships is carried out from both the buyer and supplier perspectives through staff questionnaires and team leader semi-structured interviews. The findings from this research show, contrary to the expectation of the theoretical model, a positive relationship success situation with a spectrum of both positive and negative behavioural factors present. However, a significant adversarial influence is a suite of issues that are endemic to the business in question such as old products, obsolescence, staff and organisational upheavals, poor end-customer visibility and lack of investment in modern procedures and systems. Within the monopoly environment these accentuate managers’ frustrations due to lack of freedom of action. The primary contribution of this research is therefore, an increased understanding of the business-to-business relationship dynamics within long-term, closely coupled, collaborative, business-to-business arrangements as exemplified by UK Defence and the results are likely to be of interest to both academics and managers.