Integrating Competitive Strategy and Transaction Cost Economics: An Operationalization of Fit in the Interstate Trucking Industry
Washington University Working Paper OLIN-97-06
Posted: 25 Apr 1998
Date Written: June 1997
While Porter's competitive strategy framework and Williamson's transaction cost economics have had an immense impact on modern strategic management research, they have tended to talk past each other. This paper provides an explicit integration of competitive strategy and transaction cost economics to explain the existence of different organizational forms within the same industry. We propose that a firm's strategic positioning choice has far-reaching implications for the assets it needs to assemble and the hazards to which its assets are exposed. A firm's organizational structure should "fit" its strategic position, which is characterized by the customer needs it serves and the technology and asset portfolio it employs, in that it adopts a transaction cost economizing form of organization given its strategic position. An analysis of the employment relation in the trucking industry provides empirical support for our predictions.
JEL Classification: D23, G30, G32, L92
Suggested Citation: Suggested Citation