Relations between Organizations under the Transaction Cost Theory Perspective: A Study on Intra-firm Management Accounting Practices

Broad economic, social and organizational trends can affect companies and their individual practices, motivating the inclusion of a relational perspective in the study of the determinants of the adoption of advanced management accounting practices. In this context, this study used the Transaction Cost Theory (TCT), which explains interorganizational cooperation as a possibility to guarantee reduced transaction costs. In addition to the hierarchy, the market and the hybrid forms of transaction governance, provided for by the TCT, differ, mainly, depending on the characteristics of the transactions and the contractual law regime to which they are subject. In this perspective, Thus, the objective was to analyze how the distinctive attributes of transactions and contracts in relations with suppliers are associated with the adoption of advanced management accounting practices. A multiple case study was carried out in six industries defined by theoretical sampling, through interviews and direct observation, analyzed with the support of content analysis and following the script proposed by Eisenhardt (1989). The results indicated that the execution of formal contracts and their completeness with suppliers are associated with the adoption of advanced management accounting practices, initially impacting those related to performance evaluation and, as the contractual term expands and the contract completeness is perceived increases, the advance in practices is verified in those related to costs and financial control and to planning and budgets.