Abstract:
Organizational exchange is an activity that most organizations engage in order to
operate. Since the environment has a lot of uncertainties, transaction costs economics
suggests that organizations, through purchasing agents acting as boundary spanners, seek
to obtain the highest quality merchandise at the lowest possible purchase cost and
transaction cost for the organization. The Department of Public Works and Highways, as
one of the three departments of the government tasked with major infrastructure projects,
engages in organizational exchanges whenever they try to obtain goods and services it
needs. This paper is a descriptive study entitled “Transaction Cost Economics of the
Boundary Spanning Skills of Procurement/Purchasing Agents in the Department of
Public Works and Highways.” The purpose of this research is to describe and assess the
roles of procurement/purchasing agents in the DPWH, determine their different boundary
spanning activities, and identify the different types of transaction costs incurred in the
exchange. Through interview with the different sections of the procurement/purchasing
division and counterpart suppliers of DPV/H, the researcher examined the incurred
transaction costs of agents as they perform various boundary spanning activities inside
and outside the organization. The result showed that the RA 9184-lmplementing Rules and Regulations
followed by the procurement/purchasing agents in DPWH has yielded non-monetary
costs or transaction cost. These transaction costs are mostly resulting from the decisions
and behaviors of the procurement/purchasing agents in performing their boundary
spanning roles in dealing with people outside their sub-unit, and even outside their own
organization.
