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1975Economics

Williamson: which governance fits which transaction

The point, in one line

Coase said organisations exist because of transaction costs. Williamson said how to choose: buy on the market, sign a long relationship, or do it yourself.

How it works

Goodwill is enough until somebody invests in something worth nothing anywhere else; once they do, the arrangement needs structure — the market, a contract, or a role of your own.

MarketFor a standard thing: buy where it is cheapest and protect nothing.
HybridFor a longer relationship: an agreement with clear terms and an exit.
HierarchyFor highly specific, frequent work: do it yourself, in a role of your own.
Pick the cheapest of the three that still protects an investment worth nothing elsewhere.
The same thing, in your club
  1. The situation

    The whole club website rests on one volunteer, and the only copy of the files is theirs.

  2. What the model says

    This is a governance question rather than a loyalty one: if they vanish tomorrow, two years of work vanishes with them.

  3. What you do

    Write three lines: how long the arrangement runs, who owns the files when it ends, and how many days of notice a departure needs.

What it claims

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Who created it

OW1975
An illustrated emblem, not a portrait.
Oliver E. Williamson (1932–2020)
1975

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Why this is your problem

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Why gslk uses it

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Where it runs in the product

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Source

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Rights and licence
In copyright

The primary source is in copyright. This page retells it in our own words and cites it rather than reproducing it.

What this connects to

These works are related to the one you just read — and not by accident:

Grounds these competency domains

Of the ten gslk competency domains, this work grounds:

The student version
Williamson: which governance fits which transaction

The same work written for a member: what to do with it in the club.

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