From Cost Leadership To Vertical Integration:A Perspective From The Economizing Theory Of Strategy
Governance structure is a choice contingent on external environment and internal fit considerations, but the precise connections still need revisiting. This paper integrates Porter s strategic positioning framework and Williamsons transaction cost economics, suggesting a channel that links the external environment to internal efficiency. Using World Bank Survey data of China in 2003, we find that cost leadership firms can induce firm-level strategic efforts to adjust its cost structure. This firm-level cost-reducing effort corresponds to counterpart investment in specific assets which exposes the trading parties into potential contract hazard. To hedge against the risk of contract hazard, governance structure of vertical integration is created. Our results contribute to the strategic management literature from the positioning-economizing perspective, and shed light on the connection between strategy and organizational structure.
strategic positioning transaction cost Economics economizing theory of strategy
YANG Zhi
School of Management, Huazhong University of Science &? Technology, P. R,Wuhan, China, 430074
国际会议
2010 International Conference on Management(2010管理国际大会)
上海
英文
531-541
2010-07-24（万方平台首次上网日期，不代表论文的发表时间）