Insertion of local suppliers as a source of performance in transaction costs and legitimacy

Abstract

The hiring of goods and services is a critical activity for oil companies, so the availability of qualified suppliers is desirable. In Institutional Theory, the insertion of suppliers and relationship forms between them and the main agent may be analyzed from the perspective of the search for legitimacy by organizations in the organizational field. The Transaction Costs Economics, in turn, gives support to analyze opportunism and uncertainty in exchange relationships as factors that alter transaction costs. The study shows a case of insertion of local suppliers as an industrial concentration encouragement sponsored by the State, in which pragmatic and cognitive legitimacy strategies are used to gain legitimacy and to keep it. Although there are no clear gains associated with transaction costs, Petrobras did not demonstrate that reduction in transaction costs was a priority in this process. The accomplishment of its mission, which is legitimized in society, is placed as a priority, in a behavior that can be understood as the result of a political decision to adopt sub-optimal goals, which are better explained through an institutional perspective. 

Key words: Institutional Theory, transaction costs, insertion of suppliers, oil and gas.