Satisfaction Guaranteed! Fast Customer Service!! Fast Customer Service!!. Seller Inventory PSN Items related to Economics of Strategy. Economics of Strategy. Publisher: Wiley , This specific ISBN edition is currently not available. View all copies of this ISBN edition:. Synopsis About this title In today's global recession, strong management of firms and organizations are of the utmost importance.
From the Publisher : Designed to engage and challenge students, this comprehensive book applies modern economic principles to study a firm's strategic position. From the Back Cover : Follow the fundamentals of strategy. This Fifth Edition features new and expanded discussion of topics, such as: Demand, costs, pricing, and game theory Economies of scale, a concept fundamental to competition, entry, positioning and sustainability The interface between the theory of the firm, organization design, and business strategy Incentives—vital for understanding integration and organization structure The boundaries of the firm Positioning and sustaining advantage Competition New examples, drawn from real-world cases from the eighteenth century to present day, use the lens of business history to illustrate how these principles play out in the actual corporate arena.
Buy New Learn more about this copy. International Edition. Other Popular Editions of the Same Title. Search for all books with this author and title. Customers who bought this item also bought. Bounded Rationality Individuals have limited capacity to process information deal with complexity pursue rational aims Individuals cannot foresee all possible contingencies.
Asymmetric Information Parties to the contract may not have equal access to contract-relevant information. The knowledgeable party can misrepresent information with impunity. Contracting on items that rely on this information is difficult. Limitations of Contract Law Doctrines of contract law are in broad language that could be interpreted in different ways Litigation can be a costly way to deal with breach of contract Litigation can be time consuming Litigation weakens the business relationship.
Coordination Problems Coordination is especially important when design attributes are present Design attributes are attributes that need to relate to each other in a precise fashion. Some examples are: Fit of auto sunroof glass to aperture Timely delivery of a critical component Small errors can be extremely costly.
Leakage of Private Information Firms do not want to compromise the source of their competitive advantage. Private information on product design or production know-how may be compromised when outside firms are used in the vertical chain. Leakage of Private Information Well defined patents can help but may not provide full protection Contracts with non-compete clauses can be used to protect against leakage of information In practice, non-compete clauses can be hard to enforce.
Transactions Costs If the market mechanism improves efficiency, why do so many of the activities take place outside the price system? Coase Costs of using the market that are saved by centralized direction — transactions costs Outsourcing entails costs of negotiating, writing and enforcing contracts.
Transactions Costs incurred due to opportunistic behavior of parties to the contract and efforts to prevent such behavior are transaction costs as well. Transactions costs explain why economic activities occur outside the price system inside the firm. Transactions Costs Sources of transactions costs Investments that need to be made in relationship specific assets Possible opportunistic behavior after the investment is made holdup problem Quasi-rents magnitude of the holdup problems.
Preserving Flexibility Modify the commitment as conditions evolve Delay commitment until better information is available on profitability Make unprofitable commitments today to preserve valuable options in the future. Flexibility and Real Options A real option exists if future information can be used to tailor decisions Better information about demand can be utilized by delaying implementation of projects Value of real options may be limited by the risk of preemption Key managerial skill in spotting valuable real options.
Strategic Substitutes and Complements. Strategic Effects of the Commitments.
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