Williamson's Typology

Williamson's Typology classifies organizations based on their level of control and the need for oversight. It identifies three main types: markets, hierarchies, and hybrid arrangements. Markets are informal exchanges, like buying and selling, relying on contracts and reputation. Hierarchies are formal organizations, such as companies with management structures. Hybrids combine elements of both, like franchises or joint ventures, where some control is exercised within flexible arrangements. This typology helps understand how different organizations manage transactions, oversight, and control depending on complexity, importance, and risks involved.