Efficiency Gains from Optimal Firm Boundaries
A firm gains efficiency when it assigns each activity to internal organization or market exchange according to which option has lower total costs. This requires balancing internal administrative costs against external transaction costs rather than automatically favoring either making or buying. An efficient boundary can lower costs and improve quality, innovation, and flexibility, strengthening the firm's competitiveness and profitability relative to less efficiently organized rivals.
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Economics
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Efficiency Gains from Optimal Firm Boundaries
Learn After
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