Original Research

A theory for industrial make-buy decisions?

D. R. Snaddon, D. R. Probert
South African Journal of Economic and Management Sciences | Vol 2, No 3 | a2589 | DOI: https://doi.org/10.4102/sajems.v2i3.2589 | © 2018 D. R. Snaddon, D. R. Probert | This work is licensed under CC Attribution 4.0
Submitted: 04 July 2018 | Published: 30 September 1999

About the author(s)

D. R. Snaddon, School of Mechanical Engineering, University of the Witwatersrand, South Africa
D. R. Probert, Department of Engineering, Cambridge University, United Kingdom

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After an introduction, the authors derive some common industrial make-buy situations. Six prominent economic theories of the firm are then outlined, before setting criteria to select the most appropriate economic theory for deciding when to make and when to buy. An augmented transactions cost theory may we1l be the most secure basis for a manager, in an industrial setting, to decide what to make within, and what to buy outside, the firm.


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