Managerial transfers to reduce transaction costs among affiliated firms: Case study of Japanese railway holding companies

We explore the impact of temporary transfer of managers on the transaction costs among unbundled business units and the important factors to consider while initiating transfers, through a case study of five Japanese railway corporations organized under a holding company structure. Our results suggest that there are very few conflicts and, thus, low transaction costs in the system, as the transferring managers engage in informal communications to align the related business units before the conflicts are actualised. However, there are cases in which other management characteristics such as human resource development programmes and organisational structures, can substitute for managerial transfers.