Ross Mayfield

It used to be easy to measure transaction costs especially when looking at economies of scale and speed. That’s what helped justify centralization in vertically integrated firms. In the more dynamic and decentralized world, the value shifts to economies of scope. The real problem that we have is we have no transaction-cost analysis like “build versus buy” for determining whether I should share an asset and cooperate with other firms to develop greater capabilities. To create such opportunities and convince managers and decision makers that they are worthwhile, you have to deal with the fact they have been schooled in a different kind of thought. Fundamentally they have been schooled in a competitive environment where you gain by hoarding information and where there’s no rationale for more open architectures and participation.

Like this content? Why not share it?
Share on FacebookTweet about this on TwitterShare on LinkedInBuffer this pagePin on PinterestShare on Redditshare on TumblrShare on StumbleUpon

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.