BUS 374 Lecture Notes - Lecture 2: Transaction Cost, Simple Explanation, Labour Power

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 374
• Professor: Rajiv Kozhikode

Document Summary

This chapter talks about the relationship between cooperation and capitalism. The role of cooperation, labour power and capitalism to succeed in an organization. Organizations exist so that people can cooperate and produce things. In another form, organizations exist because people won"t cooperate by themselves but rather they need organizing forces to bring cooperation to people. Without cooperation some of these things are impossible and some others ineffective. In a modern sense, organization exist so that they can bring together various forces so that they can achieve a goal. this is capital, labour, equipment, raw materials etc. Transactions can be coordinated by markets - but many have to be made within the firm (for example who will be the supplier) Sometimes the cost is much more to find a job everyday. As firms become larger, marginal cost of transacting increases. Larger firms may pay more for resources. Williamson identifies key characteristics of governance structures that are available.