Organizational Structures


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Organizational Structures
1011205Organizational StructuresOrganizations exist because they serve a useful purpose. The transaction-cost theory of a firm (Coase, 1937) postulates that there are costs associated with market transactions, and organizations prosper only when they provide a cost advantage. Examples of these costs include the cost of discovering market prices, negotiation and contracting costs, sales taxes and other taxes on exchanges between firms, cost of regulation of transactions between firms, and so on.Transaction-cost theory offers a framework for understanding limits on the size of a firm. As firms grow, it becomes more costly to organize additional transactions within the firm, called "decreasing returns to management." When the cost of organiz…
Citation
Thomas Pyzdek; Paul Keller: Handbook for Quality Management: A Complete Guide to Operational Excellence, Second Edition. Organizational Structures, Chapter (McGraw-Hill Professional, 2013), AccessEngineering Export