Effective interfirm collaboration: how firms minimize transaction costs and maximize transaction value

Article Abstract:

A study was conducted to determine how interfirm collaboration helps firms minimize transaction costs and maximize transaction value. To examine the relationships, this research analyzed the transaction relationships of two Japanese automakers and three US automakers with their suppliers. Findings revealed that transaction costs do not necessarily rise with an increase in relation-specific investments. Japanese carmakers achieved lower transaction costs than American carmakers even if their supplies are more specialized to them. These results can be explained by variations in their commitment to suppliers to take part in regular exchange, scale and range of exchanges between the supplier and automaker, interfirm information sharing, mix of safeguards to control the exchange, and investments in co-specialized assets.

United States, Japan, Strategic alliances (Business), Interorganizational relations

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The fates of 'de novo' and 'de alio' producers in the American automobile industry 1885-1981

Article Abstract:

A study is conducted to compare the success rate of 'de novo' producers and 'de alio' producers in the American automobile industry from 1885 to 1981. 'De novo' producers are new startup entrants to the industry while 'de alio' producers are diversifying entrants coming from other industries. The strategic management literature is divided into two camps, one arguing that new startup entrants are more successful while the other contends that it is the diversifying entrants to the industry that are more successful. An integrative model is developed and used to allow the organizational effects of entry mode to vary across the life cycle of a firm. Results demonstrate the potentially integrative value of an evolutionary approach to strategy.

New business enterprises, Startups, Diversification in industry, Industrial diversification

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