Managerial discretion can take many forms, some very subtle. Individual managers may run slack operations; they may pursue subgoals that are at variance with corporate purposes; they can engage in self-dealing.

Vertical intergration is an organizational response to the contracting difficulties that attend intermediate product markets where trades that are supported by transaction-specific assets are exposed to hazard.

The transaction cost approach maintains that some projects are easy to finance by debt and ought to be financed by debt. These are projects for which physical-asset specificity is low to moderate.

Oliver E. Williamson Quotes