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Many organisations are making decisions to outsource some of their activities. Though, when considering the option to outsource, organisations have to consider the transaction costs which might be incurred. These will be influenced to some extent by the specificity of the assets needed for the contract.
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When an organisation relies on an outside supplier for an input or service, this is called as a market solution. In addition to the price for the bought in input/service it may also contain the following transaction costs:
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