Under the Transaction Cost Economics framework,when it would cost the firm more to pursue an activity in-house than obtaining that activity in the external market,the firm should:
A) Consider horizontally integrating instead.
B) Perform the activity in-house anyway in order to gain core competencies.
C) Consider options such as short-term contracts or strategic alliances.
D) Divest that particular business.

Question

Quizplus · Accepted Answer

When it would cost the firm more to pursue an activity in-house, it should consider options such as short-term contracts or strategic alliances.

Under the Transaction Cost Economics Framework,when It Would Cost the Firm