Marketing Letters

, Volume 21, Issue 3, pp 211–222 | Cite as

Transaction costs, opportunism, and governance: Contextual considerations and future research opportunities

  • Aric RindfleischEmail author
  • Kersi Antia
  • Janet Bercovitz
  • James R. Brown
  • Joseph Cannon
  • Stephen J. Carson
  • Mrinal Ghosh
  • Susan Helper
  • Diana C. Robertson
  • Kenneth H. Wathne


Transaction cost theory (TCT) is one of the most dominant theoretical perspectives in contemporary business-to-business (B2B) research. Our article provides a brief review of this theory and identifies six important contextual considerations for future research. These considerations center on the topics of opportunism and governance and are intended to help refine and extend TCT’s theoretical, methodological, and substantive scope. In addition to exploring these particular ideas, we also encourage B2B scholars to contemplate ways of enriching TCT to meet the challenges posed by today’s rapidly shifting economic landscape.


Transaction cost theory Opportunism Governance 


  1. Anderson, E. (1985). The salesperson as outside agent or employee: a transaction cost analysis. Marketing Science, 4, 234–254.CrossRefGoogle Scholar
  2. Anderson, E. (1988). Transaction costs as determinants of opportunism in integrated and independent sales forces. Journal of Economic Behavior and Organization, 9, 247–264.CrossRefGoogle Scholar
  3. Anderson, E., & Schmittlein, D. (1984). Integration of the sales force: an empirical examination. Rand Journal of Economics, 15, 385–395.CrossRefGoogle Scholar
  4. Anderson, E., & Coughlan, A. T. (1987). International market entry and expansion via independent or integrated channels of distribution. Journal of Marketing, 51, 71–82.Google Scholar
  5. Argyres, N. S., & Liebeskind, J. P. (1999). Contractual commitments, bargaining power, and governance inseparability: incorporating history into transaction cost theory. Academy of Management Review, 24(1), 49–63.CrossRefGoogle Scholar
  6. Argyres, N. S., & Mayer, K. J. (2007). Contract design as a firm capability: an integration of learning and transaction cost perspectives. Academy of Management Journal, 32(4), 1060–1077.CrossRefGoogle Scholar
  7. Bagozzi, R. P., Dholakia, U. M., & Pearo, L. K. (2007). Antecedents and consequences of online social interactions. Media Psychology, 9(1), 77–114.Google Scholar
  8. Benkler, Y. (2007). The wealth of networks: how social production transforms markets and freedom. New Haven: Yale University Press.Google Scholar
  9. Bercovitz, J., & Taylor, B. B. (2009). "Accumulation of relational capabilities in multi-level relationships: evidence from sponsored research agreements," working paper, Champaign, IL: University of Illinois at Urbana-Champaign.Google Scholar
  10. Bradach, J. L., & Eccles, R. G. (1989). Price, authority, and trust: from ideal types to plural forms. Annual Review of Sociology, 15, 97–118.CrossRefGoogle Scholar
  11. Brown, J. R., Dev, C. S., & Lee, D.-J. (2000). Managing marketing channel opportunism: the efficacy of alternative governance mechanisms. Journal of Marketing, 64, 51–65.CrossRefGoogle Scholar
  12. Brown, J. R., Krishen, A. S., & Dev, C. S. (2009). "Managing marketing channel opportunism: the role of ownership," working paper, Morgantown, WV: West Virginia University.Google Scholar
  13. Cannon, J. P., & Perreault, W. D. (1999). Buyer-seller relationships in business markets. Journal of Marketing Research, 36(4), 439–460.CrossRefGoogle Scholar
  14. Cannon, J. P., Achrol, R. S., & Gundlach, G. T. (2000). Contracts, norms and plural form governance. Journal of the Academy of Marketing Science, 28(2), 180–194.CrossRefGoogle Scholar
  15. Carson, S. J. (2007). When to give up control of outsourced new product development. Journal of Marketing, 71, 40–66.CrossRefGoogle Scholar
  16. Carson, S. J., & John, G. (2009). "A transaction cost explanation of property rights sharing in outsourced research development and engineering relationships," working paper, Salt Lake City, UT: University of Utah.Google Scholar
  17. Cavusgil, S. T., Deligonul, S., & Zhang, C. (2004). Curbing foreign distributor opportunism: an examination of trust, contracts, and the legal environment in international channel relationships. Journal of International Marketing, 12, 7–27.CrossRefGoogle Scholar
  18. Coase, R. (1937). The nature of the firm. Economica, 4, 386–405.CrossRefGoogle Scholar
  19. Commons, J. R. (1931). Institutional economics. American Economic Review, 21, 648–657.Google Scholar
  20. Cook, S. (2008). The contribution revolution. Harvard Business Review, (October), 60-69.Google Scholar
  21. Deeds, D. L., & Hill, C. W. L. (1999). An examination of opportunistic action within research alliances: evidence from the biotechnology industry. Journal of Business Venturing, 14, 141–163.CrossRefGoogle Scholar
  22. Erramilli, M. K., & Rao, C. P. (1993). Service firms' international entry-mode choice: a modified transaction cost analysis approach. Journal of Marketing, 57, 19–38.CrossRefGoogle Scholar
  23. Etzioni, A., & Etzioni, O. (1999). Face-to-face and computer-mediated communities: a comparative analysis. Information Society, 15(4), 241–248.CrossRefGoogle Scholar
  24. Foss, N. J. (2005). Strategy, economic organization, and the knowledge economy: the coordination of firms and resources. Oxford: Oxford University Press.CrossRefGoogle Scholar
  25. Ganesan, S., Malter, A. J., & Rindfleisch, A. (2005). Does distance still matter? The role of geographic proximity in new product development. Journal of Marketing, 69, 44–60.CrossRefGoogle Scholar
  26. Gattiker, T. F., Huang, X., & Schwarz, J. L. (2007). Negotiation, email, and internet reverse auctions: how sourcing mechanisms deployed by buyers affect suppliers’ trust. Journal of Operations Management, 25, 184–202.CrossRefGoogle Scholar
  27. Geyskens, I., Steenkamp, J.-B. E. M., & Kumar, N. (2006). Make, buy, or ally: a transaction cost theory meta-analysis. Academy of Management Journal, 49(3), 519–543.CrossRefGoogle Scholar
  28. Ghosh, M., & John, G. (1999). Governance value analysis and marketing strategy. Journal of Marketing, 63(Special Issue), 131–145.CrossRefGoogle Scholar
  29. Ghosh, M., & John, G. (2005). Strategic fit in industrial alliances: an empirical test of governance value analysis. Journal of Marketing Research, 42, 346–357.CrossRefGoogle Scholar
  30. Ghosh, M., & John, G. (2009). When should original equipment manufacturers use branded component contracts with suppliers? Journal of Marketing Research, 46, 597–611.CrossRefGoogle Scholar
  31. Gulati, R. (1995). Does familiarity breed trust? The implication of repeated ties for contractual choice in alliances. Academy of Management Journal, 38, 85–112.CrossRefGoogle Scholar
  32. Gundlach, G. T., Achrol, R. S., & Mentzer, J. T. (1995). The structure of commitment in exchange. Journal of Marketing, 59, 78–92.CrossRefGoogle Scholar
  33. Heide, J. B. (2003). Plural governance in industrial purchasing. Journal of Marketing, 67, 18–29.CrossRefGoogle Scholar
  34. Heide, J. B., & John, G. (1990). Alliances in industrial purchasing: the determinants of joint action in buyer-supplier relationships. Journal of Marketing Research, 27, 24–36.CrossRefGoogle Scholar
  35. Heide, J. B., & Wathne, K. H. (2006). Friends, businesspeople, and relationship roles: a conceptual framework and a research agenda. Journal of Marketing, 70, 90–103.CrossRefGoogle Scholar
  36. Helper, S., & Levine, D. I. (1992). Long-term supplier relations and product market structure. Journal of Law, Economics, and Organization, 8, 561–581.Google Scholar
  37. Helper, S., & Lacetera, N. (2009). "Determinants of supplier-customer relationships: transaction attributes, firm strategies, and firm capabilities," working paper, Cleveland, OH: Case Western Reserve University.Google Scholar
  38. Hill, C. W. L. (1990). Cooperation, opportunism, and the invisible hand: implications for transaction cost theory. Academy of Management Review, 15, 500–513.CrossRefGoogle Scholar
  39. Hoetker, G. (2006). Do modular products lead to modular organizations? Strategic Management Journal, 27, 501–518.CrossRefGoogle Scholar
  40. Hough, J. R. (2005). Business segment performance redux: a multilevel approach. Strategic Management Journal, 27(1), 45–61.CrossRefGoogle Scholar
  41. Hox, J. J. (2002). Multilevel analysis: techniques and applications. Mahwah: Erlbaum.Google Scholar
  42. Jap, S. D., & Anderson, E. (2003). Safeguarding interorganizational performance and continuity under ex post opportunism. Management Science, 49, 1684–1701.CrossRefGoogle Scholar
  43. Jap, S. D., Robertson, D. C., & Worline, M. C. (2009). "The dark side of rapport: agent misbehavior face-to-face and online," working paper, Philadelphia, PA: University of Pennsylvania.Google Scholar
  44. John, G. (1984). An empirical investigation of some antecedents of opportunism in a marketing channel. Journal of Marketing Research, 21, 278–289.CrossRefGoogle Scholar
  45. Johnson, J. L., Cullen, J. B., & Sakano, T. (1996). Opportunistic tendencies in IJVs with the Japanese: the effects of culture, shared decision making, and relationship age. International Executive, 38, 79–94.CrossRefGoogle Scholar
  46. Kashyap, V., Antia, K. D., & Frazier, G. (2009). "Contracts, competence, and channel member compliance," working paper, Madison, WI: University of Wisconsin-Madison.Google Scholar
  47. Lo, D., Frias-Gutierrez, K., & Ghosh, M. (2009). "Pricing formats for branded components in business-to-business markets," working paper, Tucson, AZ: University of Arizona.Google Scholar
  48. Luo, Y. (2007). An integrated anti-opportunism system in international exchange. Journal of International Business Studies, 38, 855–877.CrossRefGoogle Scholar
  49. Macher, J. T., & Richman, B. D. (2008). Transaction cost economics: an assessment of empirical research in the social sciences. Business and Politics, 10(1), 1–63.CrossRefGoogle Scholar
  50. Mishra, D. P., Heide, J. B., & Cort, S. G. (1998). Information asymmetry and levels of agency relationships. Journal of Marketing Research, 35, 277–295.CrossRefGoogle Scholar
  51. Pisano, G. P. (1990). The R&D boundary of the firm: an empirical analysis. Administrative Science Quarterly, 35, 153–176.CrossRefGoogle Scholar
  52. Poppo, L., & Zenger, T. (2002). Do formal contracts and relational governance function as substitutes or complements? Strategic Management Journal, 23, 707–725.CrossRefGoogle Scholar
  53. Raymond, E. (1999). The cathedral and the bazaar. Sebastopol: O’Reilly.Google Scholar
  54. Rindfleisch, A., & Heide, J. B. (1997). Transaction cost analysis: past, present, and future applications. Journal of Marketing, 61, 30–54.CrossRefGoogle Scholar
  55. Rindfleisch, A., & Moorman, C. (2001). The acquisition and utilization of information in new product alliances: a strength-of-ties perspective. Journal of Marketing, 65, 1–18.CrossRefGoogle Scholar
  56. Rokkan, A. I., Heide, J. B., & Wathne, K. H. (2003). Specific investments in marketing relationships: expropriation and bonding effects. Journal of Marketing Research, 40, 210–224.CrossRefGoogle Scholar
  57. Ross, J., William, T., & Robertson, D. C. (2000). Lying: the impact of decision context. Business Ethics Quarterly, 10, 409–440.CrossRefGoogle Scholar
  58. Ross, J., William, T., & Robertson, D. C. (2007). Compound relationships between firms. Journal of Marketing, 71, 108–123.CrossRefGoogle Scholar
  59. Ryall, M. D., & Sampson, R. C. (2009). "Formal contracts in the presence of relational enforcement mechanisms: evidence from technology development contracts," Management Science, forthcoming.Google Scholar
  60. Sampson, R. C. (2004). The cost of misaligned governance in R&D alliances. Journal of Law, Economics, and Organization, 20(2), 484–526.CrossRefGoogle Scholar
  61. Sa Vinhas, A., & Anderson, E. (2005). How potential conflict drives channel structure: concurrent (direct and indirect) channels. Journal of Marketing Research, 42(4), 507–515.CrossRefGoogle Scholar
  62. Srinivasan, R. (2006). Dual distribution and intangible firm value: franchising in restaurant chains. Journal of Marketing, 70, 120–135.CrossRefGoogle Scholar
  63. Srinivasan, R., Lilien, G. L., & Rangaswamy, A. (2006). The emergence of dominant designs. Journal of Marketing, 70, 1–17.CrossRefGoogle Scholar
  64. Straus, S. G., & McGrath, J. E. (1994). Does the medium matter? The interaction of task type and technology on group performance and member reactions. Journal of Applied Psychology, 79, 87–97.CrossRefGoogle Scholar
  65. Stremersch, S., Weiss, A. M., Dellaert, B. G. C., & Frambach, R. T. (2003). Buying modular systems in technology intensive markets. Journal of Marketing Research, 40(3), 335–350.CrossRefGoogle Scholar
  66. Stump, R. L., & Heide, J. B. (1996). Controlling supplier opportunism in industrial relationships. Journal of Marketing Research, 33(4), 431–441.CrossRefGoogle Scholar
  67. Ulset, S. (1996). R&D outsourcing and contractual governance: an empirical study of commercial R&D projects. Journal of Economic Behavior and Organization, 30, 63–82.CrossRefGoogle Scholar
  68. Wang, E. T. G. (2002). Transaction attributes and software outsourcing success: an empirical investigation of transaction cost theory. Information Systems Journal, 12, 153–181.CrossRefGoogle Scholar
  69. Wathne, K. H., & Heide, J. B. (2004). Relationship governance in a supply chain network. Journal of Marketing, 68, 73–89.CrossRefGoogle Scholar
  70. Williamson, O. E. (1975). Markets and hierarchies. New York: Free Press.Google Scholar
  71. Williamson, O. E. (1985). The economic institutions of capitalism. New York: Free Press.Google Scholar
  72. Williamson, O. E. (1996). The mechanisms of governance. New York: Oxford University Press.Google Scholar
  73. Williamson, O. E. (1999). Strategy research: governance and competence perspectives. Strategic Management Journal, 20, 1087–1108.CrossRefGoogle Scholar
  74. Williamson, O. E. (2000). The new institutional economics: taking stock, looking ahead. Journal of Economic Literature, 38, 595–613.Google Scholar
  75. Wuyts, S., & Geyskens, I. (2005). The formation of buyer—supplier relationships: detailed contract drafting and close partner selection. Journal of Marketing, 69, 103–117.CrossRefGoogle Scholar
  76. Zollo, M., & Winter, S. G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13, 339–351.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Aric Rindfleisch
    • 1
    • 2
    Email author
  • Kersi Antia
    • 1
  • Janet Bercovitz
    • 3
  • James R. Brown
    • 4
  • Joseph Cannon
    • 5
  • Stephen J. Carson
    • 6
  • Mrinal Ghosh
    • 7
  • Susan Helper
    • 8
  • Diana C. Robertson
    • 9
  • Kenneth H. Wathne
    • 10
  1. 1.University of Wisconsin-MadisonMadisonUSA
  2. 2.Korea UniversitySeoulSouth Korea
  3. 3.University of Illinois at Urbana-ChampaignChampaignUSA
  4. 4.West Virginia UniversityMorgantownUSA
  5. 5.Colorado State UniversityFort CollinsUSA
  6. 6.University of UtahSalt Lake CityUSA
  7. 7.University of ArizonaTucsonUSA
  8. 8.Case Western Reserve UniversityClevelandUSA
  9. 9.University of PennsylvaniaPhiladelphiaUSA
  10. 10.Norwegian School of ManagementOsloNorway

Personalised recommendations