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Abstract In Modular Organization, associated boundary which is formed in the base of relationship network replaces entitative boundary which is formed in the base of administrative order. However, as a result of “joint mechanism of competition and cooperation”, the trend of Transaction cost moving inside appears in the Modular Organization, which is: information hidden intensifies uncertainty of organization running, continually replacing sub-module increases unknown transaction frequency, standardization of module cannot eliminate Asset Specificity. It will induce change of boundary of Modular Organization, and the essence of which is: there will be a quadric choice between transaction contract and cooperative contract until the best combination of these two kinds of contract.
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Received: 18 September 2009
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2010, Vol. 1 
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