Which of the Following Statements About the Difference Between Transaction

question 49

Multiple Choice

Which of the following statements about the difference between transaction cost theory and resource dependence theory is true?

• A) Transaction cost theory proposes the use of a merger as an interorganizational strategy but resource dependence theory advocates the use of joint venture.
• B) Transaction cost theory explains how to manage symbiotic interdependencies but resource dependence theory explain how to manage competitive interdependencies.
• C) Transaction cost theory is a better predictor than a resource dependence theory of why companies choose a certain form of interorganizational strategy.
• D) Resource dependence theory proposes the use of strategic alliances, but transaction cost theory recommends not using alliances.

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Definitions:

Total Cost

The complete expenditure incurred by a business, combining both fixed and variable costs to produce goods or services.

Variable Cost

Costs that vary directly with the level of production or sales, such as materials and labor.

Rate of Return

The profit or deficit incurred on an investment during a certain period, shown as a percentage of the original investment amount.

Target Cost

The maximum amount that can be spent on a product to ensure a desired profit margin is achieved.