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| Topic: |
Business
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| Number of pages / Number of words: |
14 / 3843 |
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misrepresenting intentions (e.g. promising to increase hours worked without intending to do so); 4. misrepresenting selling costsâ€. A firm is especially vulnerable to opportunistic behavior when it has imperfect control over sales rep, sales rep has personal interest, and contract with sales rep is incomplete...
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According to Williamson, hierarchical structure is likely to be preferred under such opportunistic situation. The exertion of legitimate authority over employees, monitoring of behavior and offering of more varied incentives can dampen opportunism. It is therefore clear that the TCA has been used to explain not only the existence of firms but also the scope of firm, in terms of vertical integration...
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