Publication:
Transaction costs from a program manager's perspective

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Authors
Angelis, Diana
Dillard, John
Raymond, Franck
Francois, Melese
Subjects
Transaction costs
Advisors
Date of Issue
2009
Date
2009
Publisher
Monterey, California. Naval Postgraduate School
Language
Abstract
This study analyzes results from a survey of US Air Force Program Managers undertaken in 2008 by the National Research Council. The theoretical foundations of our supporting inquiry come from Transaction Cost Economics (TCE) and Agency Theory. In particular, we are concerned with the complications and costs of dealing with partners both outside DoD (TCE) and within (Principal-Agent Problem). The number of oversight reviews has steadily increased, with increasingly higher-level involvement. Accordingly, the resources and management attention devoted to these reviews has also increased. The NRC study attempted to assess program reviews with respect to value added and various costs incurred. Our analysis of the survey results distinguishes between technical and programmatic reviews. Technical reviews are conducted by the program manager (as principal) to monitor technical progress of the system contractors (agents). Programmatic reviews provide management oversight of the program manager (as agent) by higher-level authorities in DoD or Congress (principals). Our results suggest that program managers found some real value in some of their programmatic reviews, despite the common perception that reviews create excessive and burdensome levels of oversight. In addition, we found that program mangers gave relatively less value to technical reviews, a result some might find counterintuitive.
Type
Technical Report
Description
Series/Report No
Department
Graduate School of Business & Public Policy (GSBPP)
Identifiers
NPS Report Number
NPS-GSBPP-09-031
Sponsors
Funder
Format
x, 43 P.: ill.;28 cm.
Citation
Distribution Statement
Approved for public release; distribution is unlimited.
Rights