Econ Essay Example | Topics and Well Written Essays - 1750 words

Econ - Essay Example This should not be astonishing, as transaction cost economics was formulated in the first place to assist in explaining the presence and structure of firms, and of by far and large economic institutions and these are fundamental aspects in the area of strategic management. Undoubtedly, of all the developed recent branches of economics, transaction cost economics has the most apparent resemblance with strategic management. Within the field of strategic management, transaction cost economics is the foundation in which economic thoughts, business frameworks, and organizational theory meet. Due to its emphasis on institutional element, rather than statistical demonstration, it has wider spectators among non-economists than other subfields of organizational economics. The resemblance comes from similar sectors of inquiry. They as well acquire from a similar intellectual mode, which motivates inquiry into the justifications for particular institutional aspects. Not astonishingly, the clinical investigations carried out by strategy researchers and economic historians as well have aided influence the progress of transaction cost economics (Dosi 1998). This paper will review the intellectual accounts of strategic management and determines the influence of transaction cost economic on the discipline. Thereby, it demonstrates the wide array of managerial economics topics and dimensions to which transaction cost principle valuably applies. Transaction cost economics aims to give details on the reasons an agreement has a definite structure and has specific attributes, and this micro-analytical preciseness has great appeal for academics of strategic management, who have a clear-cut empathy for disaggregation (Buckley 1996). Furthermore, the transaction cost economics paradigm is clearly comparative and facilitates one to mention something regarding the efficiency components of various