Global Journal of Management and Business Research, B: Economics and Commerce, Volume 23 Issue 3

applications of TCT, in addition and from this point of view, the transaction becomes the central unit of analysis of the theory of economic organization (THIELMANN, 2013). ii. The Theory of Transaction Cost The development of the theme is due to the fact that TCT is part of the disciplinary field of the economics of organizations and, for this reason, the study interest is in the firms and the aspects related to the duality of organizations and their consequent competition. Additionally, the continuity of firms is also of interest to the economy of organizations (BARNEY; HESTERLY, 2014). The precursor work developed by Wallis and North (1986) was related to the analysis of transaction costs values existing in the USA in the period from 1870 to 1970 (BENHAM; BENHAM, 1998). Research by Zylbersztajn and Graça (2002) is also identified, who sought to determine the cost of opening new firms in the clothing sector in Brazil. The work of Benham and Benham (2004), likewise, stands out in the proposal to measure the transaction cost from the opportunity cost. Regarding Transaction Cost Economics addressed by this research, the guiding question is: why do firms exist? This makes sense, especially in the context of neoclassical microeconomic theory (BARNEY; HESTERLY, 2014). To answer this seemingly simple question, it is necessary to go back in time. Classical and neoclassical economic theories, based on the understandings of Adam Smith, establish that the market has the ability to coordinate production and carry out economic transactions at a much lower cost and without the participation of the government (BARNEY; HESTERLY, 2014). Smith's guiding idea, when publishing the classic work called “The Wealth of Nations”, was that the “invisible hand” of the market could coordinate a decentralized system of prices. In this condition, Coase (1937) asks the following question: if the market is so efficient to coordinate economic transactions, why does it not manage all transactions, otherwise, why would there be transactions managed by firms? When, in 1937, Coase published the article entitled “The nature of the firm” and answered why firms exist by saying that the reason is due to the fact that sometimes the cost of managing economic transactions through markets is greater than the cost of managing the same transactions within the limits of a company. Therefore, the cost of using the price system involves activities such as finding what the prices are, (re)negotiating contracts, monitoring and resolving conflicts, that is, transaction costs. Wang (2003) explains that transaction costs, in the original formulation by Coase (1937), deal with the cost of using price mechanisms, otherwise, the cost of carrying out a transaction through an exchange with the market. As for the concept of Transaction Cost initially developed by Ronald Coase, Fiani (2011) is critical of the concept, expressing that it only considers the costs that result from the coordination of economic activity carried out by the market and disregards other forms of organizing. The economy, continues Fiani (2011), that it is necessary to clarify in which situation markets provide the best solution to promote a transaction, and in which situation this does not occur. Fiane (2011) argues that in order to produce goods or services, transactions are inevitably incurred and, even after the good is produced, there are other transactions such as hiring transporters, distributors, sales establishments, etc. If this does not occur, the good will not reach the consumer. It is necessary to consider that these contracts incur costs and these are the transaction costs necessary for the production of the good. The literature on the Theory of Transaction Costs (TCT) also focuses on the theme under the foundation of governance mechanisms, thus studying how institutions make it possible to generate income from the interdependence between individuals and companies. In view of this, the TCT has a special focus on choosing the economic institution based on explicit assumptions. Although TCT scholars confirm these assumptions, there are differences in their ways of understanding, especially in the way they build models and how organizational methods are described and applied (HENNART, 2006). iii. Theory of Transaction Costs in Williamson's version and from the perspective of Hennart (2006) Williamson's version (1991) will then be described, which, for the author, has three governance structures: (i) the market; (ii) hybrids and; (iii) hierarchy and these are called “governance mechanisms”. Table 1 then summarizes Hennart's (2006) understanding of the governance structures argued by Williamson. Table 1: Governance Structure in Williamson's Version Governance Mechanisms Characteristics of the Mechanisms Characteristics of Transactions Preferable Market The identity of the parties is irrelevant; transactions are governed by formal terms, so they are enforced by legal means. Asset specifics High asset specificity increases switching costs and enables the more flexible part explore another less Asset specificity is low and uncertainty is high. 18 Global Journal of Management and Business Research Volume XXIII Issue III Version I Year 2023 ( ) B © 2023 Global Journals Study of Artisanal Açaí Beater under the Light of Institutionalist Theory: An Integrative Review