Heide and John (1990) argue that transaction cost analysis is useful in studies of relationships,because it provides insights into the circumstances that cause the development of a closer relationship between the buyers and suppliers.Heide and John base their theoretical argument on Williamson ‘s (1979) studies stating that the establishment of a closer relationship corresponds to a shift away from maket-based exchange toward bilateral governance. However, in 1992 Heide and John have pointed out that TCE does not recognize power or dependency in the interaction between the firms. According to them the features of the relationship determine what kind of a relationship is constructed. Krapfel, Salmond and Spekman (1991) present that transaction costs are optimized if the relationship management is optimized according to the relationship type, and argue that transaction costs have an impact on the type of relationship.