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The inter-organizational relationships are most manifest in commercial transactions, in which goods or services are exchanged from one organization to another. Williamson (1975) has stated that transaction costs will rise when the unpredictability and uncertainty of events increases, and/or when transactions require very specific investments, and/or when the risk of opportunistic behavior of other organizations is high. Williamson argues the higher transaction costs are, the more likely transactions will take place within hierarchically organized firms. That is, when transaction costs are high, firms tend to choose vertical integration in order to control the transaction process...
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