Holding up general motors? Issues in the fisher body case study
A classic case study in the economics of organizations, and pertinent to this discussion, regards the relations that prevailed between General Motors, Inc. and the Fisher Body Company, Ltd. during the 1920s. Accordingly, the first of accounts to be provided was by Klein et al, whose work – Vertical integration, appropriable rents, and the competitive contracting process – was to form the basis upon which all discussions were held. This was until Ronald Coase, presented his perceptions on the issue of transaction cost economics, through his 2000 work – The Acquisition of Fisher Body by General Motors. Through this work, Coase was to decisively criticise the then ‘prevailing perception’ on the relations between General Motors and the Fisher Body Company. His criticism was founded upon the grounds that the long held perspective was factually incorrect, providing critical input in support of his arguments. Regarded as the founding father of modern (contemporary) transaction cost economics, his input and experience are thus considered critical towards effectively discussing the case under study. Of particular importance is his visit to the U.S, with specific focus placed upon the car manufacturer industry during the 1930s (Coase 2000, p. 16). General Motors and the Fisher Body Company case that occurred during the 1920s has significantly affected economic discussions and undertakings in the current world.