Advancing transaction costs economics (TCE), we propose that hybrids (e.g., alliances) may be
preferred to markets and hierarchies whenever the benefits of semi-externalization (partial adoption
of the market mode of governance) combined with semi-internalization (partial adoption of the
hierarchy mode of governance) less the misalignment costs that arise when these two conflicting modes
of governance are combined exceed the benefits of full-blown externalization less the transaction costs
and/or full-blown internalization less the administrative costs
