1. Major car manufacturers tend to have long-term strategic relationships with core sub-assembly suppliers (e.g. drive train – engine, interior furniture, electrical systems, etc.). Using Williamson’s Transaction Cost Economics theory, identify two reasons why each party (the manufacturer and the supplier) would wish to have a privileged relationship rather than rely on the marketplace (pure price-based tendering) for their buying and selling.

Answer rating: 100% (QA)

Williamsons Transaction Cost Economics TCE theory focuses on the idea that transaction costs influence the choice between market and hierarchy or a longterm relationship In the context of major car ma... View the full answer