TRANSACTION COSTS, CLANS AND CORPORATE CULTURE

For a long time it has been recognized that traditional bureaucratic modes of control are not very efficient in many highly uncertain, rapidly changing or otherwise troublesome situations. Inspired by transaction cost thinking different authors have suggested that clan form control or certain types of corporate cultures should do better in these circumstances. Among these, Ouchi (1980) and Wilkins and Ouchi (1983) stand clearly in the foreground and the transaction cost related clan developed by these authors is discussed at length in the article. Further we examine some empirical case studies indicating that other types of mechanisms than suggested by transaction cost reasoning seem to be involved. As a result we propose an extension of the clan concept to include three different kinds of clans: (1) the Economic-co-operative Clan, (2) the Social-integrative Clan, and (3) the Blood-kinship Clan. Next we discuss how clans or local cultures become established, including the possibilities for management to develop these kinds of patterns intentionally. Finally we set up some tentative hypotheses concerning the significance of 'economic' and 'social' types of clans in ambiguous situations and the limits of the ideas of the transaction cost approach in explaining complex exchange issues in organizations.