What is a relationship-specific asset?

Assets are relationship-specific if their value is greater within a relationship than outside it. A typical example involves an upstream supplier who makes investments to customize her product for the needs of the downstream purchaser.

What do we mean by asset specific firm specific investments?

Asset specificity is a term related to the inter-party relationships of a transaction. It is usually defined as the extent to which the investments made to support a particular transaction have a higher value to that transaction than they would have if they were redeployed for any other purpose.

What are the types of asset specificity?

Williamson describes five other Page 8 different types of asset specificity: site specificity, physical asset specificity, human asset specificity, temporal specificity and brand name capital (Williamson, 1991).

What is human asset specificity?

Human-Assed Specificity Human-asset specificity refers to the accumulation of knowledge and expertise that is specific to one trading partner. The design and development of a new automobile model has traditionally been a very complicated and time-intensive process.

What are three types of specialized assets?

They come in three types: site specificity, physical-asset specificity, and human-asset specificity.

What is a specialized asset?

Understanding Asset Specificity. Asset specificity is the degree to which an asset is useful across multiple situations and for multiple purposes. It may be equipment designed to have a single function or labor trained to perform a single task. Customized computer software is an example of a highly specific asset.

Which of the following is a disadvantage of vertical integration?

The disadvantage of vertical integration is that it reduces the amount of diversification that an organization can access. If disruptions within the supply chain occur, then the entire operation is put at-risk until the supply chain can be restored.

What is a related linked diversification strategy?

Your company is pursuing a strategy of related diversification if you find that multiple lines of businesses are finked with your company. Also known as ‘concentric diversification,’ related diversification involves diversifying into a business activity that is related to the core (original) business of the company.

What are the reasons for diversification?

There are four most often cited reasons for diversification: the internal capital market, agency problems, increased interest tax shield and growth opportunities.

How do you use a diversification strategy?

First and foremost, companies diversify to achieve greater profitability. Diversification is used by businesses to help them expand into markets and industries that they haven’t currently explored. This is achieved by adding new products, services, or features that will appeal to the customers in these new markets.

What does it mean when a cat lets you rub its belly?

If a cat lets you rub their belly, that means they completely trust you. A cat’s belly is the softest and would roll on its back to either show they trust you or let you rub their belly. Maybe even both. But most cats hate having their belly rubbed as it means you voilated that trust.

Why do cats show their Buttholes?

TIL cats show you their butthole as a way of telling you they’re comfortable with you.

Do cats think humans are their mothers?

Cats treat humans as their mothers. No, your cat doesn’t actually think you’re the mama cat that birthed it. And cats reserve their affectionate behavior usually for the humans in their homes. Researchers found that cats were more relaxed and content around their humans, but more on high alert around strangers.