Strategic Relevance of Due Diligence Real Estate - An Integrated Transaction Cost Theory Approach

2015 ◽  
Author(s):  
Ayosha Orth
Keyword(s):  
Real Estate ◽  
Transaction Cost ◽  
Transaction Cost Theory ◽  
Theory Approach ◽  
Due Diligence

Transaction Cost and Resource-Based Explanations of Joint Ventures: A Comparison and Synthesis

2000 ◽  
Vol 21 (1) ◽  
pp. 215-242 ◽  
Author(s):  
Eric W.K. Tsang
Keyword(s):  
Transaction Cost ◽  
Joint Ventures ◽  
Market Failure ◽  
Transaction Cost Theory ◽  
Intermediate Inputs ◽  
The Cost ◽  
Theoretical Pluralism ◽  
Monitoring Performance ◽  
High Uncertainty ◽  
Cost Aspect

Transaction cost theory has been the dominant theoretical lens used in the study of joint ventures. The purpose of this paper is to explain the formation of joint ventures from the resource-based perspective and to compare this perspective with transaction cost theory. By focusing on the cost aspect of a transaction, the transaction cost logic explains joint ventures in terms of market failure for intermediate inputs, asset specificity, and high uncertainty over specifying and monitoring performance. Putting more emphasis on the benefit side of a transaction, resource-based theory regards joint ventures as a means of exploiting and developing a firm's resources. The transaction cost and resource-based explanations are, to a certain extent, complementary. Taking the stance of theoretical pluralism, an attempt is made to synthesize the two theories into a more comprehensive perspective which takes both costs and benefits into account.

Potential for optimising organisational structures in the technical due diligence for real estate transactions in Germany

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yannis Steffen Oetken ◽  
Christian Hofstadler ◽  
Felix Meckmann
Keyword(s):  
Real Estate ◽  
Transaction Management ◽  
Due Diligence ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Theoretical Approaches ◽  
Transaction Process ◽  
Organisational Structures

PurposeThe individual levels involved in real estate management are thoroughly discussed in the literature. This paper provides a structured meta-analysis of the different theoretical approaches in German-speaking countries. It also investigates the integration of transaction management and technical due diligence into the concepts of organisation theory. In this process, the interfaces are analysed and optimised models are developed for transferring the technical due diligence findings to the operational level.Design/methodology/approachInterviews with transaction management experts were conducted based on a narrative literature review. These interviews shed light on how the components of transaction management and due diligence are integrated into the transaction process, with a particular focus on technical due diligence. They also provide insights into how the related results are taken into account in relation to the transaction, and how they are transferred into the operational phase.FindingsIt becomes apparent that the role of transaction management is not clearly defined and delimited in the structural model of the real estate industry. Technical due diligence findings are usually transferred to the operation of the property via several, manual interfaces with corresponding losses of knowledge. The related models derived and developed for the purpose of operational optimisation define the role of transaction management against a technical background and identify the interfaces to be considered.Practical implicationsThe significance of transaction management for subsequent operations is discussed and elaborated on. More specifically, transferring safety-relevant, high-priority findings from the technical due diligence exercise plays a crucial role for the modelling stage. On the implementation level, the derived models serve as a basis for customising the internal organisational structure.Originality/valueIn Germany, there has hardly been any research into the involvement of technical experts in the real estate transaction process to date. This paper provides initial approaches to optimising organisational structures and sustainably integrating technical due diligence findings into real estate operations.

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