Tsang (2000) "Transaction cost and resource-based explanations of joint ventures: A comparison and synthesis
35 important questions on Tsang (2000) "Transaction cost and resource-based explanations of joint ventures: A comparison and synthesis
What is the purpose of this study?
How does the TC logic explains joint ventures?
How does the resource-based theory regards joint ventures?
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What happens when a firm possesses a certain capability which is better than those of rivals?
What are two behavioral assumptions of TC theory?
- Opportunism
- Bounded rationality
What is the different role played by bounded rationality in TC and RB theories?
RB theory: believes that what a firm can do and will do is mainly determents on its organizational embedded routines.
What is needed according to the TC theory to safeguard transactions against opportunistic behavior?
What is the main weakness of TC?
What is the main function of the entrepreneur according to TC?
Where is the governance structure chosen mainly determined by (for TC)?
What is asset specificity?
What is the basic nature of TC?
What is the basic nature of RB?
What is the objective of TC?
What is the objective of RB?
What is the entrepreneurial function of RB?
What are the constraints on strategic options of TC?
What is the limit of organization on TC?
What is the limit of organization on RB?
In which two forms can joint ventures be classified?
- Equity
- Non-equity
Why not acquire the firm with the complementary assets, or develop the assets internally?
What does a high degree of asset specificity precludes?
What are the reasons why firms would form a JV under the RB logic?
- Exploitation of resources
- Development of resources
What makes exploitation of resources a case for a joint venture?
Why is acquisition more viable but also not without problems?
- Usually, a substantial price premium needs to be paid for the acquired firm. So it entails higher financial resources and is less flexible than JV.
- In addition, successful integration of the acquiring and the acquired firm into a single firm requires the managerial services of the acquiring firm.
What is also a motive for a joint venture?
What makes development of resources a case for a joint venture?
To acquire resources that are needed and to dispose of those that do not fit into a firm's core competence
What makes more sense regarding capabilities?
Which two factors affect the success of learning?
- The degree of firm specificity of the resource in question
- The learner’s absorptive capacity.
What are the complications when firms want to get rid of a business unit (put a business up for sale)?
- Price determination. Asymmetric information about the true value of the business causes an ‘adverse selection’ or a ‘lemon’ problem.
- Once a ‘for sale’ label is attached to the business, damaging impacts on staff morale, customer loyalty, suppliers’ trust and other relations may occur.
- The business may have various linkages with its corporate parent due to, say, the sharing of facilities and personnel.
What is the equation for the net benefit of joint venture?
Vj = When an activity is organized internally, extra value may be created due to reasons pertaining to intrinsic firm capabilities. It also stands for the value that would be destroyed under market arrangements. In some cases VH is negative when compared with transaction through markets. For example: overstretching of resources.
TCM = When an activity is organized through markets, transaction cost (TCM) is incurred.
MCj = management costs
PCj = production costs
ACj = alliance costs
What is an effective protection against opportunistic behavior by joint venture partners?
Why is the issue of trust important?
Why is trust a core behavioral assumption?
What do the authors expect when two firms enter into multiple JV?
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