Title

Transaction costs, learning and alliances.

Document Type

Journal Article

Publisher

World Scientific Publishing Co Pte Ltd

Faculty

Business and Public Management

School

Business

RAS ID

51

Comments

This article was originally published as: Love, P. E., Tse, R. Y., Holt, G. D., & Proverbs, D. G. (2002). Transaction costs, learning, and alliances. Journal of Construction Research, 3(02), 193-207. Original available here

Abstract

Alliances in construction, whether in the form of partnering arrangements or strategic commercial relationships, provide a mechanism that can improve inter-organizational relations and project performance. Alliances help construction organizations to achieve their business objectives through collaborative, harmonious commercial relationships. The key to gaining competitive advantage and improving customer satisfaction lies in the ability of construction organizations to form such cooperative "learning" alliances. Essentially, these should be long-term strategic partnerships, which engender an environment to enable mutual and reflective learning (between organizations). It is proffered that cooperative learning alliances enable construction organizations to better consider business decisions that are influenced by this learning climate (bounded rationality), and make best use of the information (opportunism) they encounter. These two concepts impact considerably on transaction costs within organizations. Thus, if construction organizations utilize a mechanism to best capitalize on these facets, then more efficient internal governance structures result. This can be achieved through cooperative learning where ideas, objectives and mission are shared between alliance partners. To demonstrate the effectiveness of cooperative learning alliances, a case study is used to explore their impact on transaction costs.

DOI

10.1142/S1609945102000199

 
COinS
 

Link to publisher version (DOI)

10.1142/S1609945102000199