Transaction costs in human resource management – Interaction and interdependence with organisational structure

Classical transaction cost theory is not applicable to decisions on HRM or organizational design. This article overcomes such a fruitless situation. First on an operative level the two types of HRM and separately organizational transaction costs will be analyzed and then linked together in a substitutive or cumulative way. Second, transaction cost analysis is extended to the higher level of strategic HRM and organization design. There both types of transaction costs are linked again. Furthermore, they control types and size of HRM and organizational transaction costs on the operative level. As a decision base consequently both levels and both types of transaction cost should be analyzed and determined simultaneously.