A Review of Economics of Constructual Contracts in Iranian Oil Industry: Make or Buy Approach

Today, there are many types of contracts in the world. However, Managers and other experts don’t know enough about those of contracts attributes and, maybe, they face many problems in adjusting the working relationship. On the other hand, it seems that there are very few studies regarding this issue due to the fact that contracting is an interdisciplinary approach. Hence, this paper assumes the standard problem of Transaction Cost Economics as the basis of the analysis and by classifing constructual contracts into the two groups of build or buy, attemps to analyse the structure of both groups. This paper by dividing Contractual Relationships into two groups has made use of some cases from Iranian oil industry. This approach is interdisciplinary and it is shown that an improved understanding of the concepts can help managers and other decision makers to arrive at more efficient decisions.