| Course | EIO-5200 Economic Issues in Organizations |
|---|---|
| Module | Module 2 |
| Paper type | Written assignment 2: boundaries of the firm, make-or-buy decisions |
| Length | About 510 words, 4 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Master of Science in Management |
| Updated | October 2026 |
Free sample paper for EIO 5200 Module 2
Analyzer In, Crematory Out: Drawing the Boundaries of a Mobile Veterinary Practice
Student Name
Master of Science in Management, Thomas Edison State University
EIO-5200: Economic Issues in Organizations
Mentor Name
Month Day, Year
Analyzer In, Crematory Out: Drawing the Boundaries of a Mobile Veterinary Practice
Why the Boundary Question Matters
Coase (1937) asked why firms exist at all if markets allocate resources well, and answered that using the market has costs: finding suppliers, negotiating and enforcing contracts. Williamson (1979) made the idea practical by showing that these transaction costs rise with three features: asset specificity, how much an investment is tied to one relationship; frequency, how often the transaction happens; and uncertainty, how hard performance is to specify and check. Besanko et al. (2017) add the other side of the ledger: markets often produce more cheaply because specialized suppliers achieve scale and face competitive discipline that an in-house unit does not.
Activity 1: Routine Blood Work
The practice expects about 900 routine chemistry and blood-count panels a year. Leasing a compact analyzer for the van costs $9,600 a year plus about $14 a panel in reagents, $22,200 in total. A reference laboratory charges about $28 a panel, $25,200, with results the next day. Cost alone favors making, narrowly. The stronger reason is timing: a vomiting cat whose kidney values can be read during the visit can be treated before the van leaves, while next-day results mean a second trip. That benefit is specific to a house-call model and cannot be bought from the laboratory. Recommendation: make.
Activity 2: Specialized Tests
Thyroid panels, cultures and tissue samples are needed perhaps 250 times a year. Equipment for them would sit idle most days, and a reference laboratory spreads its cost over thousands of clinics. The transactions are frequent enough to justify an account but involve no relationship-specific investment, and quality is easy to check against standards. Recommendation: buy.
Activity 3: Long-Term Medications
Older pets often take medicine for arthritis, heart disease or thyroid conditions for years. Stocking these in the van ties up cash and space and risks expiry. Online pet pharmacies, which fill prescriptions authorized by the veterinarian, have scale the practice cannot match. The practice keeps margin on a first supply but refers refills. The risk, that clients buy elsewhere and drift away, is small because the veterinarian still authorizes each refill and sees the pet at rechecks. Recommendation: buy, through referral.
Activity 4: Aftercare Cremation
End-of-life visits will be a large share of the practice's work, and families care intensely that the ashes returned are their own pet's. Owning a crematory would cost hundreds of thousands of dollars, far beyond the volume of one practice. Buying case by case, however, exposes the practice to the uncertainty Williamson describes: performance is hard to verify and a single failure would damage its reputation. Recommendation: a hybrid, a long-term contract with one licensed crematory that includes individual tracking tags, the right to visit unannounced and a clause allowing termination after any documented failure.
Conclusion
The boundary falls where the practice's model creates specific value, same-visit diagnosis, and outside where suppliers' scale wins and quality can be checked. Where quality is hard to verify but scale still matters, a governed contract does better than either extreme.
References
Besanko, D., Dranove, D., Shanley, M., & Schaefer, S. (2017). Economics of strategy (7th ed.). Wiley.
Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405. https://doi.org/10.1111/j.1468-0335.1937.tb00002.x
Williamson, O. E. (1979). Transaction-cost economics: The governance of contractual relations. Journal of Law and Economics, 22(2), 233-261. https://doi.org/10.1086/466942
What the EIO 5200 Module 2 instructions ask for
Boundaries of the Firm carries the second paper, again two to three pages that analyze and pull together the module's ideas. Typical questions ask when a firm should make rather than buy, what transaction costs are and how asset specificity, frequency and uncertainty shape the choice, and when vertical integration or a long-term contract makes sense. Applying the ideas to a specific firm is the clearest way to show understanding. The practice here is a composite; outside sources are allowed if cited in APA style. This assignment usually tests the boundaries of the firm: when to make, buy or use a hybrid arrangement such as a long-term contract.
Inside the EIO 5200 Module 2 example
A short opening section sets out Coase's question, Williamson's three dimensions and the textbook's point about market efficiencies, so every later judgment has a stated basis. Four activities follow, each with its own heading, the costs where they can be estimated and a one-word recommendation at the end. Routine and specialized laboratory work are separated to show the same function can fall on both sides of the boundary. The cremation section introduces a hybrid contract with named protective terms. The conclusion states the general rule the four cases illustrate. Each activity is judged on the same transaction cost factors, which keeps the four decisions consistent.
Where the marks sit in the EIO 5200 Module 2 rubric
Credit in the boundaries paper follows how well each make-or-buy call rests on transaction costs and asset specificity. For the boundaries module, mentors check that make-or-buy reasoning uses the course concepts correctly, that the costs of using the market are weighed against its efficiencies and that each recommendation follows from the analysis. Distinguishing activities rather than giving one answer for the whole firm, and recognizing hybrid arrangements between make and buy, show depth. Correct APA citations for Coase, Williamson or the textbook complete the expectations. Answers that explain why a hybrid contract suits one activity better than either making or buying show a grasp of governance beyond the simple make-or-buy choice. For make-or-buy questions, mentors reward papers that name the specific transaction costs involved, such as finding a reliable lab or monitoring a crematory, and explain how each pushes the decision toward owning or contracting.
EIO 5200 Module 2 help from the desk
Answers lose credit for deciding by cost alone, for treating "make" and "buy" as the only options and for naming transaction costs without saying which ones apply. For each activity, estimate the cost both ways, then ask how specific the investment is, how often the transaction recurs and how hard quality is to check. Consider long-term contracts and partnerships in between. Give a clear recommendation per activity within the page limit. Send your Module 2 prompt for a free first sample. For each activity, name the asset specificity, frequency and uncertainty involved before choosing make, buy or contract.
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EIO 5200 Module 2 questions, answered
Where can I find a free EIO 5200 Module 2 sample paper?
The mobile veterinary practice paper above decides make, buy or contract for four activities using transaction cost economics.
What are transaction costs?
The costs of using the market: searching for suppliers, negotiating, writing and enforcing contracts and guarding against opportunism.
What is asset specificity?
The degree to which an investment is worth much less outside one particular relationship, which raises the risk of being held up by a trading partner.
When should a firm make instead of buy?
When the activity creates value specific to the firm, requires relationship-specific investment or has quality that is hard to verify through a contract.
What is a hybrid governance arrangement?
A long-term contract, alliance or partnership that sits between buying on the spot market and owning the activity outright.