Study of the Governance Structure of Enterprise Logistics Based on Transaction Cost Economics

The governance structure of enterprise logistics based on transaction cost theory is composed of market, outsourcing, insourcing, and internal integration. Production cost is determined by efficiency of scales and the development level of scientific technology while transaction cost is determined by behavioral elements of personnel as bounded rationality and opportunism and transaction characteristics elements, such as assets specificity, complex of service, uncertainty of transaction and transaction frequency/volume. This paper discusses the adaptable environment and operation objects among the operation modes of market purchasing, logistics operated in house, logistics outsourcing and logistics insourcing, with assets specificity as horizontal axis and total operation cost as vertical axis. That is, market purchasing is reasonable to general logistics activities, outsourcing to integrated logistics and insourcing logistics when the logistics industry moves toward oligopoly.