Cox (1996) argues that all discussion on the proper form of the relationship between the firm and its external environment must include the theory of TCE, because it presents the factors which determine the internal and external boundaries of the firm. Howevwe,he points out that TCE does not tell under which circumstances and conditions internal or external contractual relattionships are more or less useful useful, achieving lowest transaction costs. He states that successful firms will be those who can create skills and knowledge that help them get the dominating position within a supply chain. Also Ghoshal and Malhotra (1997) argue that transaction costs can be studied in relation to efficiency and performance metrics within the supply chain. According to them, transaction costs can affect to buyer-supplier relationships and flexibility.