GB793 Unit 2 Theory Comparison Memo Example

Course	GB793 Advanced Topics in Management
Unit	Unit 2
Paper type	Theory comparison memo
Length	About 930 words, 6 pages double-spaced
Format	APA 7 student paper
School	Purdue University Global
Program	MBA
Updated	October 2026

Free sample paper for GB793 Unit 2

Bringing the Code Home: A Unit 2 Theory Comparison Memo on an Insurer's Insourcing Decision

[Student Name]

Purdue University Global

GB793: Advanced Topics in Management

Unit 2 Theory Comparison Memo

[Instructor Name]

[Date]

Aldine Mutual, its vendor and every record are composite and illustrative; the theories and studies cited are real.

What this part is doingPromising contradicting facts for each theory in the lead tells the reader the comparison will be a test.

Memo

To: GB793 seminar group From: Doctoral candidate Re: Which theory explains Aldine Mutual's decision to insource claims software

Summary. Transaction cost economics explains Aldine's decision better than the capabilities account, because the record shows rising haggling costs after a hold-up episode and no prior internal software capability. One document, the board's 2025 decision memo, would settle what remains open.

The Decision

The account below draws only on the contract file and board records. In 2017, Aldine signed a contract with a software vendor to build and maintain its claims processing system, replacing an older system the insurer had run itself until its last developers retired. Over the contract's life, Aldine issued 214 change orders, most of them responding to changes in state insurance regulations, new catastrophe reporting rules or adjustments to its own claims procedures. In 2024, a dispute arose over the price of a change required by a new state regulatory filing format: the vendor quoted a figure Aldine's staff considered several times the work involved, and the change was delivered four months late. In 2025, the board approved hiring eleven developers and a phased transfer of the system in-house.

Three Propositions From Transaction Cost Economics

Williamson (1985) argued that transactions are organized to economize on the costs of contracting, which depend on asset specificity, uncertainty and frequency. Three propositions follow for Aldine.

First, the more the vendor's work becomes specific to Aldine, the more each party can be held up by the other, because neither can easily switch. Second, the more often the contract must be adapted to unforeseen changes, the higher the costs of negotiating each adaptation. Third, when specificity and adaptation needs are both high, the transaction will move inside the firm, where adaptations can be ordered rather than negotiated (Williamson, 1991).

Three Propositions From the Capabilities View

The capabilities view holds that firms perform activities internally when they can do them better than outside suppliers, and outsource when suppliers are more capable. Argyres (1996) found, in a study of one firm's make-or-buy decisions, that both capability differences and transaction costs shaped choices. Three propositions follow.

First, Aldine will bring work inside when its own capability in the activity exceeds the vendor's. Second, where Aldine lacks capability, it will outsource regardless of contracting difficulties, since building capability is slow and costly. Third, insourcing will follow the development of an internal capability, not precede it.

What Would Contradict Each Proposition

For transaction cost economics, the propositions would be contradicted if change orders had been priced and delivered without dispute, if the system were generic enough that another vendor could have taken it over cheaply, or if insourcing had occurred without any preceding contracting difficulty.

For the capabilities view, the propositions would be contradicted if Aldine had no internal software capability when it decided to insource, or if the vendor's capability, measured by delivery quality, remained high throughout.

What this part is doingWriting the contradicting observations before looking at the file keeps the memo from fitting the theories to the facts afterward.

Applying the Tests

The file supports all three transaction cost propositions. The system became highly specific to Aldine over eight years of tailoring, which the 214 change orders reflect, and the vendor's knowledge of its code became an asset neither party could easily replace. Adaptation was frequent, driven by regulation Aldine could not predict. The 2024 dispute is the hold-up the theory predicts: the vendor priced a mandatory change at a premium because Aldine had no ready alternative. The decision to insource followed directly.

What this part is doingTying each transaction cost proposition to a dated event in the file shows the test was applied, not asserted.

The file contradicts the capabilities propositions in their simple form. Aldine had no software developers in 2024; it decided to insource and then hired them. That is the reverse of the sequence the third capabilities proposition predicts. Nothing in the file suggests the vendor's technical quality declined; the complaints concern price and timing, not competence.

Aldine did not bring the work home because it had become good at software; it hired people to become good at software because the contract had become too costly to renegotiate.

A Note on the Vendor's Side

A fair comparison also asks how the vendor experienced the relationship. Its pricing in 2024 may have reflected genuine cost: regulatory changes often require work across many parts of a claims system, and a vendor carrying the risk of fixed-price changes would price that risk in. Transaction cost economics does not require the vendor to have behaved badly; it requires only that each adaptation had to be negotiated between parties with conflicting interests and limited alternatives. That condition held whether or not the 2024 price was fair.

Judgment

Transaction cost economics explains more of Aldine's decision. The capabilities view contributes one point: Aldine's leaders appear to have judged that claims software had become central enough to their business that building capability was worth the cost, a dynamic version of the capabilities argument rather than the static one stated above.

What Would Decide What Remains Open

The board's 2025 decision memo would settle the remaining question. If it cites the 2024 dispute and the cost of future regulatory changes, the transaction cost account is confirmed. If it cites the strategic importance of claims data and a plan to build analytics capabilities, the dynamic capabilities account gains weight. The memo has not been released to the candidate, so the judgment above is provisional until it can be read.

References

Argyres, N. (1996). Evidence on the role of firm capabilities in vertical integration decisions. Strategic Management Journal, 17(2), 129-150.

Williamson, O. E. (1985). The economic institutions of capitalism. Free Press.

Williamson, O. E. (1991). Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36(2), 269-296. https://doi.org/10.2307/2393356

Reading the GB 793 Unit 2 instructions

Unit 2 of GB793 asks you to compare two theories on one organizational decision. Describe the decision using only documented facts, such as contracts and board records. State three propositions from each theory, drawn from its primary sources, in a form that applies to the case. For each proposition, write the observation that would contradict it, and do this before examining the evidence. Then apply the tests to the file and report which propositions survive. Consider the other party's perspective so the comparison stays fair. Judge which theory explains more, noting anything the weaker theory still contributes. Name the single document or fact that would settle what remains open. Write it as a memo to your seminar group with a short summary at the top. Expect about five pages for the Aldine-style memo.

Inside the GB793 Unit 2 example

After its header, the memo gives a two-sentence summary. The decision section lists the 2017 contract, the 214 change orders, the 2024 dispute over a regulatory change priced well above the work involved and delivered four months late, and the 2025 hiring. Three transaction cost propositions on specificity, adaptation and integration follow Williamson, and three capabilities propositions follow Argyres. Contradicting observations are listed for each. The application shows the transaction cost propositions holding and the capabilities sequence reversed, and the highlighted sentence states the difference. A note on the vendor's side keeps the analysis fair. The judgment favors transaction cost economics and names the board's 2025 decision memo as the deciding document.

GB793 Unit 2 rubric: what earns full points

Points in the GB793 theory memo depend on whether the comparison is a real test. Instructors give significant weight to propositions drawn accurately from primary sources and stated for the case at hand. Writing contradicting observations before examining the evidence is often the most heavily weighted step, because it shows the theories could have failed. Applying each test to documented facts, rather than impressions, earns credit. Fairness to the other party, here the vendor, shows the student is not building a one-sided story. A judgment that names a winner while crediting what the weaker theory adds demonstrates balance. Identifying the evidence that would settle the remaining question proves the student sees where the evidence in the contract file runs out. Concise memo format is expected.

GB793 Unit 2 help: mistakes that cost points

Many GB793 theory memos conclude that both theories help explain the decision, which is almost always true and rarely informative. Others describe each theory in general terms without stating propositions specific to the case. Contradicting observations are often written after the evidence is reviewed, which turns a test into a fit. Students frequently rely on what managers said about their reasons rather than on documented events. The vendor's or supplier's perspective is usually missing. State the decision from records, derive three propositions per theory, write what would contradict each first, apply the tests, consider the other side, judge and name the deciding document. For a make-or-buy decision from your own workplace, a writer can draft the propositions and their contradicting facts.

Get a GB793 Unit 2 example written to your instructions

Name the pair of theories your Unit 2 prompt puts in competition, and any case or decision attached, then include the memo instructions and rubric. The resulting memo writes each theory's propositions before touching the evidence, names what would contradict every one and reaches a judgment. An initial custom sample comes without cost, usually inside 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

More GB793 papers and MBA samples

GB793 Unit 2 questions, answered

Why does the memo refuse to conclude that both theories help?

Because that conclusion is almost always available and rarely informative. Two theories predicting the same outcome for different reasons can be separated only by evidence one predicts and the other does not, here the timing of the hire. The memo commits to the account that explains that evidence, while naming the document that could still reverse its judgment.

Are the Aldine Mutual figures real?

No. Aldine is a composite, with contract history and figures invented to be realistic for a regional insurer. A composite lets the memo include exactly the evidence that separates the theories. Where a section insists on a published case or a real firm, the same propositions-first structure applies, though the separating evidence may prove thinner.

Where can I find a free GB793 Unit 2 sample paper?

A complete GB793 Unit 2 theory comparison memo is on this page, testing transaction cost economics and a capabilities account against a composite insurer's decision to insource its claims software.

What is hold-up in transaction cost economics?

When one party has made investments specific to a relationship, the other can demand better terms because switching is costly. Here the vendor priced a mandatory change at a premium because the insurer had no ready alternative.

Why write contradicting observations before reading the file?

Because a theory compared with evidence after the fact can almost always be made to fit. Stating in advance what would count against each proposition lets the evidence decide between the theories.