Transaction Cost Approach Summary

The reading “The Economics of Organization: Transaction-Cost Approach” written by Williamson analyses the significance of economics by the implementation of the transaction-costs method that allows for the readdressed of operational performance by evaluating the human assets and the governance of the company. The acquisition of an item allows for the development of relationships between the buyer and seller. The incorporation of finances and relationships would be evaluates in accordance with the circumstances to economize the transaction-costs. Williamson argued, “…the basic unit of analysis and by assessing governance structures, of which firms and markets are the leading alternatives, in terms of their capacities to economic on transaction

In this case the author focuses on the asset as the most important dimension during the investment of transactions. It allows for the transportation of expenses and human asset during the interchange of efforts. The management of human assets allows for the supply of services that facilitate the organization of the transaction. The assurance of continuity of employment is a required practice that allows for the protection of workers if productivity is achieved in the organization. The author argued that the individual assessment of work productivity should be classified in a way that ca be observed and assessed by in management of the organization. The significance of the reading focused on the analysis of the implementation of economics into the transaction cost approach by developing a new interpretation of the implementation of human assets and management practices to determine the power of efficiency in an

The power of decision-making rests in the upper management’s ability to implement the ideas described in the transaction-costs approach. The governance of a firm is essential to the continuity of the organization and its existence. By learning how to assess the work productivity by considering the internal structures to maintain the efficiently and enhance the employment relations. Williamson argued, “...employees understand and are dedicated to the purposes of the firm, and employees will be provided with considerable job security, which gives them assurance against exploitation…” (p. 215)

Compare and contrast in three sentences from the reading to the tenets that are fundamental to the Classical School of Thought. (You can find these in the introduction of the