IER GAME

What is called when a company buys or controls manufacturers and suppliers for its products and materials ?

• A) vertical integration

• B) horizontal integration

In the past, how many factors have contributed to 'outsourcing' trend?

• 2

• 6

• 3

• 4

What is the relationship between specificity and transaction costs?

• A) Higher specificity leads to lower transaction costs.

• B) Higher specificity leads to higher transaction costs.

• C) Specificity has no impact on transaction costs.

• D) The relationship between specificity and transaction costs is unclear.

Why do higher measurement or search costs lead to increased transaction costs?

• A) Higher measurement costs make transactions more efficient.

• B) Higher measurement costs reduce the risk of opportunism.

• C) Higher measurement costs increase the importance of accurate measurements.

• D) Higher measurement costs necessitate costly arrangements in transactions.

What mechanism always solves the hold-up problem according to the passage?

• A) Formalized long-term contracts 

• B) Hybrid forms of governance 

• C) Vertical integration 

• D) Minimizing joint transaction costs by selecting the most suitable mechanism 

What is the key question when analyzing governance mechanisms?

• A) Assessing the costs and competences of different mechanisms 

• B) Determining when to use the market versus internal organization 

• C) Comparing the performance of various governance arrangements 

• D) Minimizing joint transaction costs by selecting the most suitable mechanism 

How many higher-level categorizations of asset specificity are defined by Williamson?

• 2

• 3

• 4

• 5

Which approach was suggested to avoid "survival bias"?

• A) natural approach

• B) ecological approach

• C) physical approach

• D) biological approach

Which of the following is the impact of technological change on organizational forms ?

• A) Technology has a minimal impact on organizational forms as long as companies adapt their routines accordingly.

• B) The introduction of new technologies often leads to a shift in the optimal governance mechanism based on the comparative cost of governance.

• C) Technological advancements primarily benefit vertically integrated companies, making them the optimal choice for all industries.

• D) Organizational patterns remain static regardless of technological changes due to the consistent nature of market-based solutions.

True of False: The “scale economies” argument really is a transaction cost and strategic argument.

• A) True

• B) False