Transaction Cost Economics Essay Example | Topics and Well Written Essays - 2500 words

Transaction Cost Economics - Essay Example However, "TCE's main theme is that transactions -which differ in their attributes - are aligned with governance structures-which differ in their costs and competencies - in a discriminating, economizing way"- Roland F. Spekle (2001). It may be observed that some organizations use very extensive and formal planning to direct their efforts, whereas other organizations may not attach that much importance for planning. Similarly rules, procedures and standards dominate the working of some firms while individual judgments provide the basis of working in other firms. Although, these phenomena do not find any statutory explanation for such organisational behaviours, Management Control theory has come a long way in providing satisfactory explanations in this direction. On a similar footing "TCE studies organization from a comparative point of view in which different institutional arrangements are considered alternative ways to organize economic activity" - Roland F. Spekle (2001). TCE tries to explain the rationale behind the behaviour of an organization in getting some transactions executed within the same organization while some other transactions are getting outsourced. The TCE's reasoning to this specific attitude of the firms lies in the fact a specific institutional arrangement is chosen to govern a specific transaction because that arrangement offers some distinctive set of control devices. Another filed of economics which deals with the organisational behaviours is the Evolutionary theories which have a long tradition in the literatures of socio-economics and strategic management and have influenced recent studies of the evolution of management accounting systems. "A review of the literature of economic indicates that three main concepts are at the core of evolutionary thinking: institutionalization, capabilities and learning and change". - Alan F. Coad and John Cullen (2006). Thus Evolutionary Theories also centre on the basic concepts of organizational change s due to these three factors. This paper envisages describing the basics of Transaction Cost Economics and Evolutionary Theories, the nature of their relationships and their relative contribution to Management Accounting. 2.0 TRANSACTION COST ECONOMICS (TCE): Transaction Cost Economics is most associated with the work of Oliver Williamson. It must be emphasized that while Williamson's work is very distinctive, it falls well within mainstream economic thinking. It is sometimes said that TCE attempts to explain why firms exist. That is why there are some transactions directed by managers in the context of a hierarchy, as opposed to taking place in an open market. It's more accurate, though to say that TCE tries to explain the particular structure of a firm, most importantly, the extent to which it will integrate vertically. Williamson's theory is based on the assumption that the primary aim of firms is profit maximising and that involves cost minimization. He also tried to make distinction between transaction costs and production costs. Production costs are assumed to be those which are incurred to build and run an 'ideal business setup' and transaction costs are those incurred for departure from the ideal set up. As it is the fact that the existence of the 'ideal set up' requires a perfectly efficient market and the prerequisites of such a market are the factors like availability of full information to all the parties and perfect competition among other requirements. Departures from these idealistic set up can

France business code Ethics Essay Example | Topics and Well Written Essays - 2000 words

France business code Ethics - Essay Example France is not only a developed country, but one that has moved from economic government ownership and control, to free market economy. Many large companies in France have been privatized, with France Telecom, Air France, Thales and Renault being examples of plans that have undergone privatization. France enjoys the third largest earning from tourism, being the world’s most visited tourist destination. Despite these points of strengths, France is greatly affected by cultural dynamics and ethical constraints. France, officially known as the French Republic is an independent republic in Western Europe. It extends as far as the Mediterranean Sea, the English Channel, the North Sea, the Rhine River and the Atlantic Ocean. Presently, France is the largest country in Europe and also owns the world’s second-most important exclusive economic zone. While the history of France is always traced back to the Franks, France has developed over time to be a leading democracy and one of the pillars of European Union (EU). Likewise, France had been an absolute monarchy until the Storming of the Bastille took place on July 14th, 1789 and culminated unto the French Revolution. It was also at this historical juncture that France founded the fundamental rights and freedoms of the French citizens without any exception by making a declaration on the rights of man and those of the French citizen. All the above developments have given businesses in France a greater impetus. For instance, through the declaration of human rights and freedom, French citizens are able to choose their occupation, including entrepreneurship. Conversely, the aforementioned leadership position is seen in the manner in which it has continued to dispense an important global role as one of the permanent member of NATO, the EU, the Great 8, the Great 20 and the United Nations Security Council. Initially, France had been removed from NATO forces or