In today's competitive business situation, the budget for each investment is likely to be tight. From the start of the investment, cost management can be conducted for the best efficiency. Nowadays, companies work not only with domestic industries but also with international suppliers. The business opportunity channel has been widely developed. Global business interaction appears to determine the relationship between the company and the supplier and determine how to effectively make profits. Furthermore, it can be said that this circumstance also leads to improving national industrial relations. It cannot be denied that relationships with other organizations can be an important factor in running businesses in today's competitive market. In the vertical chain of business processes, the company must think about the effective way to acquire the profit, created by the decision to take or buy within the vertical limits. This article will be examined in three parts. First, the background of the theory will be briefly reviewed. Secondly, the characteristics of transaction cost economics (TCE) will be mentioned on how to work within vertical boundaries, including some case examples. Finally, the critical role of TCE and the key concept of vertical chain coordination will be revealed. First of all, the transaction cost theory was stated by Coase. He published his literature, The Nature of the Firm, in 1937. Knight (Coase in Williamson and Winter, 1993) stated that the determinants of firm size are impossible to deal with in the transaction. Because the size of companies is done by market transaction, and the transactions that are organized depend on several entrepreneurs. Dobb (Coase in Williamson and Winter, 1993)...... middle of article......Besanko, D., Dranove, D. & Shanley, M., Schaefer, S. 2010a. Economics of strategy. 5th ed. New Jersey: John Wiley & Sons. Besanko, D., Dranove, D. and Shanley, M., Schaefer, S. 2010b. Figure 5.4: Summarizing frames: a problem tree [photo] John Wiley & Sons. Coase, R., 1937. The Nature of Business. In: O. Williamson and S. Winter, eds. 1993. The nature of business: origins, evolution and development. Oxford: Oxford University Press. Ch.2.Khalil, E., nd After the special nature of the enterprise: Beyond the critiques of orthodox neoclassical economics. In: Groenewegen, J., ed. 1996. Transaction Cost Economics and Beyond. Ch.15.McNutt, P., 2010a. Transaction Cost Economics (TCE) and the Modern Company [Online] Available: http://www.patrickmcnutt.com/kaelo2/kaelo.html (accessed August 2010)McNutt, P., 2010b. Strategy integrated into the game. New York: McGraw-Hill