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    Inter-organizational Linkages and Transaction Cost Theory

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    According to transaction cost theory, what motivates organizations to form inter-organizational linkages—both formal and informal linkage mechanisms?

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    Step 1
    The need for reducing transactions costs motivates organizations to form inter-organizational linkages both formal and informal. According to transaction theory, when non specific goods and services are exchanged uncertainty is low, so firms will use informal linkages such as the standing of the firm or oral ...

    Solution Summary

    Motivation for forming inter organizational linkages is discussed step-by-step in this solution. The response also has the sources used.