Trust and Transaction Cost in Supply Chain Cost Optimization: An Exploratory Study

Trust and Transaction Cost in Supply Chain Cost Optimization: An Exploratory Study

Ik-Whan G. Kwon (St. Louis University, USA), John H. Hamilton (St. Louis University, USA) and Seock-Jin Hong (Bordeaux School of Management, France)
DOI: 10.4018/978-1-60960-768-5.ch005
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Abstract

This chapter describes the relationship between trust and transaction cost in supply chain operations. Empirical findings from several research studies on trust and transaction cost in supply chain operations will be presented in support of the argument for managing transaction cost in supply chain management. A suggested future research agenda on this topic is also provided.
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Attributes For Lowering Transaction Cost

Above studies seem to recognize the roles of transaction cost in determining the optimum prices of goods and services in the market. Tasks to locate and develop appropriate tools to achieve such goal (reducing transaction cost) are challenging and complex. Two approaches will be highlighted in this paper; information technology (IT) and the collaborative working relationship among and between business partners.

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