Williamson

Williamson's theory focuses on how organizations and individuals make decisions, emphasizing that choices are often guided by contracts, reputation, and long-term relationships rather than just short-term benefits. He highlights that parties consider transaction costs—resources needed to negotiate, enforce, and monitor agreements—and prefer arrangements that reduce these costs. This perspective explains why firms exist, how they structure their activities, and why they choose certain contractual arrangements over others, ultimately shaping economic behavior and organizational design based on efficiency and sustainability.