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This hazardous situation brings up the question regarding the sort of governance arrangement that should be put in place to checkmate business opportunists, who capitalize on the ignorance of their business associates or partners. Poppo et al (2002), therefore, forward the view that transaction cost economics (TCE) has emerged as a common framework for understanding how managers craft governance arrangements. Williamson (1991) holds the proposition that managers align the governance features of inter-organizational relationships to match known exchange hazards, particularly those associated with specialized asset investments, difficult performance measurement or uncertainty. In response to exchange hazard, managers may craft complex contracts that define remedies for foreseeable contingencies or specify processes for resolving unforeseeable outcomes.

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