MANAGING MARKETS: IMPLICATIONS FOR THE MAKE-BUY DECISION

The concept of a managed market is developed and is seen as especially suitable for complex transactions as an alternative to internal hierarchical organization. It is argued that a number of augmenting processes, namely trust, routinization and mutual adjustment, usually associated with internal organization, can be used to good effect in a market. Hence the paper develops an approach to make-buy decisions through a transactions cost model and exemplifies the augmenting processes in three case studies from branches of the engineering industry.