Strategic Management Research Proposal Example | Topics and Well Written Essays - 1500 words

Strategic Management - Research Proposal Example The signing of new contracts and venturing into new partnerships is a way in which this can be achieved. However, there is the question of the transaction cost. That is to say, the cost incurred during the process of an exchange. Williamson’s transaction cost approach assumes that the transaction is the fundamental unit of analysis and through understanding its economization one is able to evaluate how their governing structures serve in their economization. In short, to understand a transaction, one must scrutinize the terms under which the transaction is taking place and ensure it is in the interest of the business. Asset specificity refers to the features of an asset that make it useful for single or multiple specific purposes and is the most important dimension (The economics of organization: The transaction cost approach – AcaWiki 4). Based on this, the more the specificity of an asset, the lower its chances for resale or redeployment. An example is workers trained to perform only a single task. Uncertainty basically is the state of an asset being unreliable to the goal. Uncertainty differs from risk in that risk can be measured through prior or situational probability while uncertainty is not measurable at all. Being a multidimensional aspect, it holds an important role in the decision making process of the stakeholders, thus must be taken into consideration before contracts are signed. Lastly the frequency is the repeated times in which a transaction will occur between specific or multiple parties. Also, one has to consider the frequency of disturbance in the market. This is to say, the adaptation of the market to the change that is brought about with the transaction. This has to be accounted for, such that it must be known if the transaction is a one time deal or will it will be repeated. Having considered all the above in the for the transaction