Contracting and Social Mechanisms in Governing International Transactions and Collaborations: A Case of Taiwan Textile Industry
Date Issued
2008
Date
2008
Author(s)
Yu, Hsin-Ju
Abstract
This thesis examines how businessmen in Taiwan textile industry rely on assorted mechanisms to govern their international transactions and collaborations, and further compares and contrasts the reduced role and functions of formal contract in Taiwanese business practices with Western counterparts where legal contract enforced through litigation remains the major architecture underlying business transactions. The research first identifies three major problems, i.e., adaptation, safeguarding, and performance evaluation, associated with inter-organizational transactions and collaborations, and then discusses how various contracting laws and governance structures are applied and chosen to govern the transactions. Various applicable mechanisms including economic, legal, and social ones are then identified and discussed the contingencies where they can be most applicable. A research framework associating transaction attributes and governance mechanisms is then generated and tested on five case studies on Taiwan textile industry. Our research findings show that, different from Western counterparts, extra-legal mechanisms and social mechanisms in particular are most functional in Taiwan business practices where relationships, reputation, and long-term orientation are more emphasized and respected in business community.
Subjects
transaction cost theory, governance structures
contract
trust
relation
control mechanisms
Type
thesis
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