Jawn Lam

Professional partnership (P2 form)

Organizational StructuresProfessional, project, and knowledge forms13 min read

The senior professionals own the firm, produce its work, and manage it together, so ownership, production, and management are fused.

What it is

A professional partnership is a firm whose senior professionals own it, do its work, and manage it together, so ownership, production, and management sit in the same people. Partners lead practice areas and offices, associates work toward partnership, and collegial control over professionally trained skills holds the firm together more than a chain of command.

In the professional partnership the owners do the work and govern it together

Select a unit or a letter to read it; the key above the drawing names the lines and letters used.

Reports toAdvises, or reports indirectlyMMutual adjustmentSStandardization of skills

ElectsThepartnershipPractices andofficesAssociatesAll thepartnersExecutive policycommitteePractice areaOfficeAssociatesBy practiceBy officeMS
ElectsThe partnershipPractices and officesAssociatesPartnersLeadersPracticeOfficeAssociateBy practiceBy officeMS
Select a unit or a letter to read it. M, mutual adjustment: People coordinate their own work by informal communication with each other. S, standardization of skills: The training a worker needs is specified, usually by bodies outside the organization, so trained workers coordinate by knowing what to expect of each other.All the partners. Layer: The partnership. Reports to no one. The partners own the firm, do its work, and manage it together, so ownership, production, and management sit in the same people (Greenwood, Hinings, and Brown 1990).Executive policy committee. Layer: The partnership. Reports to All the partners. Elected by the body of all the partners (Greenwood, Hinings, and Brown 1990); its leaders' authority is contingent and renegotiated with autonomous peers (Empson 2017).Practice area. Layer: Practices and offices. Reports to All the partners. By practice. Led by a partner and formed around a professional specialty; on our judgment a professional belongs to a practice and to an office at once.Office. Layer: Practices and offices. Reports to All the partners. By office. Led by a partner and formed around a place, the second basis held beside the practice areas (our judgment).Associates. Layer: Associates. Reports to Practice area. Professionals who work toward partnership; collegial control holds the firm together more than a chain of command. That an associate belongs to a practice and to an office at once is our judgment: the solid and dotted lines show the two ties, and no record ranks them.M, mutual adjustment. People coordinate their own work by informal communication with each other.S, standardization of skills. The training a worker needs is specified, usually by bodies outside the organization, so trained workers coordinate by knowing what to expect of each other.
The structure in words
  1. The partnership
    • All the partners, reports to no one. The partners own the firm, do its work, and manage it together, so ownership, production, and management sit in the same people (Greenwood, Hinings, and Brown 1990).
    • Executive policy committee, reports to All the partners, coordinated by mutual adjustment. Elected by the body of all the partners (Greenwood, Hinings, and Brown 1990); its leaders' authority is contingent and renegotiated with autonomous peers (Empson 2017).
  2. Practices and offices
    • Practice area, reports to All the partners, grouped by practice, coordinated by standardization of skills. Led by a partner and formed around a professional specialty; on our judgment a professional belongs to a practice and to an office at once.
    • Office, reports to All the partners, grouped by office. Led by a partner and formed around a place, the second basis held beside the practice areas (our judgment).
  3. Associates
    • Associates, reports to Practice area. Professionals who work toward partnership; collegial control holds the firm together more than a chain of command. That an associate belongs to a practice and to an office at once is our judgment: the solid and dotted lines show the two ties, and no record ranks them.
  • Office and Associates: advises, or reports indirectly.

The apex is a body of all the partners, which elects an executive policy committee, and partners lead the practice areas and offices where associates work toward partnership. Professionally trained skills coordinate the work, and the peers who lead the firm adjust to one another.

Source: Greenwood and colleagues 1990, an interview and survey study of four accounting firms; Empson 2017; Empson 2019, one case study; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test.

The form's dimension profile is mostly our judgment, carried over from the professional bureaucracy (Mintzberg 1980) and the partnership studies:

  • Grouping: two bases at once, practice areas and offices.
  • Specialization: high.
  • Formalization: low.
  • Centralization: contested. Decentralized, theory from Empson (2017); mixed on our reading of the founding study (Greenwood, Hinings, and Brown 1990): strategic direction weak and negotiated, national offices focused on finances and professional standards, though the authors call operating control decentralized.
  • Layers and span: flat: partners, associates, and a leadership group whose membership peers keep deliberately ambiguous (Empson 2019).
  • Decision rights: vertical and horizontal decentralization, Mintzberg's Type E, with the professionals also the owners.
  • Coordinating mechanism: spans standardization of skills and mutual adjustment among peers.
  • Lateral mechanisms: task forces and teams, the partners' committees.
  • Differentiation against integration: moderate.
  • Mode of exchange: clan, in Ouchi's (1980) sense: shared professional norms and long socialization toward partnership.
  • Boundary permeability: selective: outside professional norms cross in (von Nordenflycht 2014), while ownership stays closed.

Where the professional partnership (P2 form) sits on the eleven dimensions

The filled segments are the form's levels; select a row for its reason and sources.

Select a dimension to read why the form sits there, and on what basis.Basis of grouping: Two or more at once. Basis: Judgment. Practice areas and offices led by partners, so a professional belongs to a practice and to an office at once, as in the professional bureaucracy; judgment. Sources: Empson 2017; Mintzberg 1980.Specialization: High. Basis: Judgment. Professionals hold the operating work; judgment, from the professional bureaucracy it shares a core with. Sources: Empson 2017; Mintzberg 1980.Standardization and formalization: Low. Basis: Judgment. Change toward a consciously managed business has been concentrated in the market-facing parts of firms, while the core elements of the traditional partnership, little formal structure among them, stayed; judgment for the band. Sources: Pinnington and Morris 2003; Cooper and colleagues 1996.Centralization: Decentralized. Basis: Theory. Leaders lead without traditional hierarchy: their authority is contingent and must be renegotiated with autonomous peers. Sources: Empson 2017; Greenwood and colleagues 1990. View 2: Mixed. In four large accounting firms, strategic direction was weak and set by negotiation and consensus building, operating control was decentralized to the local offices, and only control of the firm's critical function, professional standards and quality, was centralized, and even that was exercised through partners from other local offices. Sources: Greenwood and colleagues 1990.Layers and span of control: Flat. Basis: Judgment. Partners, the associates who work toward partnership, and a leadership group whose membership peers keep deliberately ambiguous; judgment for the band. Sources: Empson 2019; Empson 2017.Decision rights and the locus of authority: Vertical and horizontal decentralization. Basis: Judgment. Formal and informal power rests with the professionals of the operating core, who here also own the firm; judgment, from Mintzberg's Type E. Sources: Mintzberg 1980; Empson 2017.Prime coordinating mechanism: Mutual adjustment and standardization of skills. Basis: Judgment. The professionals' standardized skills, carried over from Mintzberg's professional bureaucracy, and mutual adjustment, the usual pattern found among the peers of one firm's leadership group; the span for the form is judgment. Sources: Empson 2019; Mintzberg 1980.Lateral mechanisms: Task forces and teams. Basis: Judgment. Partners govern collegially through committees of peers; judgment. Sources: Empson 2017.Differentiation against integration: Moderate differentiation, some integrating roles. Basis: Judgment. Practices differ and are joined by partner committees and the leadership group; judgment. Sources: Empson 2017; Lawrence and Lorsch 1967a.Mode of exchange and control: Clan. Basis: Judgment. Control rests on shared professional norms and long socialization toward partnership, Ouchi's clan; judgment. Sources: Ouchi 1980; Empson 2017.Boundary permeability: Selective. Basis: Judgment. Professional norms set outside the firm cross into it, and those norms, more than the value of capital, keep public corporations out of such industries, while ownership stays closed to the partners; judgment for the band. Sources: von Nordenflycht 2014.

One of the eleven levels rests on theory, none on evidence, and ten on judgment. One row is contested: Centralization.

Source: Empson 2017; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test; Pinnington and Morris 2003, a survey of 197 law firms; Cooper and colleagues 1996, two case studies by scholars; Greenwood and colleagues 1990, an interview and survey study of four accounting firms; Empson 2019, one case study; Lawrence and Lorsch 1967a, a multi-firm comparative field study; Ouchi 1980, a conceptual article; von Nordenflycht 2014, a historical comparison across five professional industries.

Where it came from

Royston Greenwood, C. R. Hinings, and John Brown named the P2 form in the Academy of Management Journal in 1990, from 252 interviews and structured measures in four of the Big Eight accounting firms in Canada. They defined it against Williamson's (1975) M-form and H-form. Like the M-form, the P2 form separates strategic from operating responsibilities, but with weak, negotiated direction and one-year financial targets.

The schools of organization design and the forms' origins, 1900 to now

Each row is a school's era; each square under them is a form at its first year. Select a row or a square to read it; on a form's page, its own square and span are marked, with the schools that treat it.

1900192019401960198020002020Bureaucracy and its criticsClassical administrationHuman relations and System 4Transaction cost economicsCarnegie schoolSocio-technical systemsLabor-managed firmModularity and mirroringStrategy and structureContingency theoryFrench bureaucratic schoolJapanese-firm literatureScandinavian and DutchConfiguration theoryInformation processingLabor processStrategic choiceGerman codeterminationOrganizational economicsInstitutional theoryPopulation ecologyResource dependenceBusiness groupsScandinavian institutionalSocietal effectNetwork perspectiveComputational designNew-forms debateAlgorithmic managementForms by first yearProfessional partnership (P2 form), 1990Now

The forms by first year

1900192019401960198020002020Professional partnership (P2 form), 1990Now

Schools that treat this form: Population ecology.

Select a school's row or a form's square to read it.Select a form's square to read it; open a school below.Bureaucracy and its critics1900s to 1950s, revived from the 1990sWhat it claimsWeber held that rational-legal authority exercised through an office hierarchy, written rules, trained officials, and promotion by qualification is technically superior in precision, speed, and reliability. Critics studied its unintended consequences, Michels's iron law sharpest.What it has shownMerton (1940) argued, with no test, that rules can turn from means into ends; case studies followed. The Aston group concluded that the type's dimensions vary independently, and Wagner's meta-analysis (2021) found that many of their interrelationships have weakened.Who disputes itHuman relations and System 4 sets the costs of impersonal rules to motivation and cooperation against the technical superiority Weber stresses.Bureaucracy and its critics in The Schools of Organization DesignClassical administration1910s to 1940s, and in German to the 1970sWhat it claimsThere are general principles of administration, among them division of work, unity of command, a scalar chain of authority, and a limited span of control, and a structure built to them will be efficient in most settings. Taylor added that planners should set work methods.What it has shownThe school offered reasoning and experience, not tests. Woodward (1965) found that the spans and levels of the more successful firms in her sample differed by production system, and Simon (1946) showed that the principles come in pairs that point in opposite directions.Who disputes itStructural contingency theory found that the structure of successful firms varies with technology and environment, where classical writers treat their principles as general.Classical administration in The Schools of Organization DesignHuman relations and System 41920s to 1960sWhat it claimsOutput depends on the social relations of work, the norms of informal groups, and the style of supervision as much as on formal design. Likert's System 4, overlapping work groups joined by linking-pin managers under participative management, outperforms authoritative systems.What it has shownThe founding evidence is the Hawthorne studies, which later reanalyses dispute (Carey 1967; Levitt and List 2011). Likert's support came largely from his own institute's surveys. Wagner (1994) found participation's effects on performance and satisfaction significant but small.Who disputes itLabor process and critical theory reads human relations as a technique of managerial control rather than a change in the distribution of power.Human relations and System 4 in The Schools of Organization DesignTransaction cost economics and the M-form hypothesis1937, then the 1970s to the presentWhat it claimsFirms exist, and are organized as they are, to economize on transaction costs. Hierarchy replaces the market when assets are specific, uncertainty is high, and exchange is frequent, and the multidivisional form should outperform the functional form in large, diversified firms.What it has shownArmour and Teece (1978) found, in United States petroleum firms from 1955 to 1973, a positive relationship between the multidivisional form and profitability while the form was spreading, but not once an equilibrium in organizational form was reached.Who disputes itThe network perspective on organizations: Granovetter argued that the theory undersocializes economic action, which is embedded in networks of personal relations that also produce trust and order.Transaction cost economics and the M-form hypothesis in The Schools of Organization DesignThe Carnegie school and the attention-based view1940s to the presentWhat it claimsPeople in organizations are boundedly rational, so structure matters because it sets the premises of their decisions and channels their attention: who sees which problems, which goals they pursue, and which routines they follow. Ocasio makes structure distribute attention.What it has shownMarch and Simon (1958) drew propositions from the existing literature, and Cyert and March (1963) added process models and simulations. Two studies show hierarchy shaping what is sent up as well as what is chosen (Reitzig and Maciejovsky 2015; Keum and See 2017).Who disputes itOrganizational economics: decision rights, authority, and complementarities models a principal and agents with defined objectives; the Carnegie school, firms as coalitions with unresolved goal conflict.The Carnegie school and the attention-based view in The Schools of Organization DesignSocio-technical systems1950s to 1980sWhat it claimsAn organization is a social system and a technical system that must be designed together. The same technology admits more than one way of organizing work, and groups that own a whole task and control its variances at the source perform better and are more satisfied.What it has shownTrist and Bamforth (1951) found that longwall mechanization broke up self-regulating work groups. A review of 134 experiments found them extremely successful overall, and Stewart (2006) linked team autonomy to performance; studies of socialist brigades and Volkswagen qualify it.Who disputes itLabor process and critical theory: Kelly argued that labor intensification, not joint optimization, accounts for what socio-technical redesign achieved, and that the part of pay incentives was seriously underestimated.Socio-technical systems in The Schools of Organization DesignThe economics of the labor-managed firm and of enterprise ownership1958 to the presentWhat it claimsA firm run by its workers behaves differently from one run for investors: Ward modeled the Yugoslav-style firm as maximizing income per worker. Hansmann argued that an ownership form's success depends on the balance between the costs of market contracting and of ownership.What it has shownBurdín (2014) found a 29 percent lower hazard of dissolution for Uruguayan worker-managed firms than for conventional ones, and Fakhfakh, Pérotin, and Gago (2012) found French labor-managed firms as productive or more so in every industry studied.Who disputes itOrganizational economics (Jensen and Meckling) contrasts the labor-managed firm, in which tradable residual claims are legally prohibited, with cooperatives and partnerships that arise out of voluntary contracting.The economics of the labor-managed firm and of enterprise ownership in The Schools of Organization DesignModularity and the mirroring hypothesis1960s to the presentWhat it claimsComplex systems are built of nearly decomposable parts, and an organization's structure tends to mirror the architecture of what it makes: modular products allow loosely coupled organizations, and tightly coupled products need tightly coupled teams. Conway's law runs in reverse.What it has shownColfer and Baldwin (2016) review the empirical studies and report both support and principled exceptions. Direct tests point both ways: MacCormack, Baldwin, and Rusnak (2012) found open source products more modular than their commercial pairs; dynamic components break the mirror.Who disputes itNo school in the record disputes it head on; it answers information processing, which meets the coordination load inside the organization; mirroring writers locate it in the product's architecture.Modularity and the mirroring hypothesis in The Schools of Organization DesignStrategy and structure1960s to 1980sWhat it claimsStructure follows strategy: firms that diversify by product or geography outgrow the centralized functional structure and, after a lag and usually a crisis, adopt divisions. Chandler drew this from the histories of DuPont, General Motors, Standard Oil of New Jersey, and Sears.What it has shownChandler (1962) is comparative business history of four firms set against a wider survey. Rumelt (1974) related diversification and structure to performance, and Egelhoff (1988), with 34 multinationals, found some of Stopford and Wells's relationships supported and others not.Who disputes itInstitutional theory: in Fligstein's model divisions spread with a product-related or unrelated strategy, presidents from sales or finance, and other firms in the industry changing; strategy was one of three.Strategy and structure in The Schools of Organization DesignStructural contingency theory1960s to the presentWhat it claimsThere is no one best structure. Performance depends on fit between structure and contingencies such as environment, technology, size, and strategy, on an open-system view of the organization. Drazin and Van de Ven separate fit as selection, interaction, and systems.What it has shownBurns and Stalker, Woodward, and the Aston group related structure to context; Drazin and Van de Ven (1985) supported selection and systems fit only. Pennings (1975) found that fit did not explain effectiveness; Schoonhoven (1981) found traditional hypotheses unsupported.Who disputes itStrategic choice: Child argued that contingency theory explains structure by the constraints of context and leaves out the political process by which power-holders choose strategic action, structural forms included.Structural contingency theory in The Schools of Organization DesignThe French bureaucratic school (strategic analysis)1960s to 1980sWhat it claimsA bureaucracy is a system of power relations organized around zones of uncertainty. Impersonal rules and centralization protect members from depending on one another, those who control uncertainties hold power, and, unable to correct its errors, it changes only through crisis.What it has shownLe phénomène bureaucratique (1963; English 1964) rests on two case studies, a clerical agency and a state industrial monopoly. L'acteur et le système (1977; English 1980) is theoretical.Who disputes itSocietal effect and comparative business systems: D'Iribarne argues that national logics of conduct, such as a French logic of honor, explain differences that Crozier attributed to power games.The French bureaucratic school (strategic analysis) in The Schools of Organization DesignThe Japanese-firm literature1960s to the presentWhat it claimsThe large Japanese firm coordinates operating decisions through horizontal information sharing among semi-autonomous shops and uses its ranking hierarchy mainly as an incentive scheme (Aoki). It creates knowledge through middle-up-down management (Nonaka and Takeuchi).What it has shownAoki (1986) is a formal model. Lincoln, Hanada, and McBride (1986) compared 51 Japanese and 55 United States manufacturing plants, and Nonaka and Takeuchi (1995) rest on case studies, chiefly of Japanese firms. Fruin (1994) found the enterprise system defined at three levels.Who disputes itLabor process and critical theory reads shop-floor delegation as control: Sewell and Wilkinson argue that just-in-time and total quality regimes delegate tactical responsibility while centralizing strategic control.The Japanese-firm literature in The Schools of Organization DesignThe Scandinavian and Dutch socio-technical schools1960s to 2000sWhat it claimsThe Scandinavian program sought democracy at work through field experiments with semi-autonomous groups, then through democratic dialogue. The Dutch school's design theory turns complex organizations with simple jobs into simple organizations with complex jobs.What it has shownEmery and Thorsrud reported field experiments in Norwegian industry; Gustavsen (1992) records that they spread less than hoped, his reason for turning to dialogue. Berggren studied work organization in the Swedish auto industry. The Dutch work rests on design cases and argument.Who disputes itThe Japanese-firm literature: defenders of the Toyota system hold that standardized work with employee participation learns faster; Berggren reports Swedish long-cycle plants matching a line plant on productivity.The Scandinavian and Dutch socio-technical schools in The Schools of Organization DesignConfiguration theory1970s to the presentWhat it claimsStructures cluster into a small number of internally coherent configurations whose elements reinforce one another, so organizations move between a few types in large jumps, not small steps. Mintzberg's five configurations each rest on one coordinating mechanism.What it has shownDoty, Glick, and Huber (1993) found that fit to Miles and Snow's ideal types predicted effectiveness while fit to Mintzberg's did not. A meta-analysis of 40 tests (Ketchen and colleagues 1997) found that configuration partly explains performance, more so with broad definitions.Who disputes itStructural contingency theory: Donaldson counters that most organizations sit at intermediate points on a continuum of fits, not in a few configurations, and that studies over time find mostly incremental change.Configuration theory in The Schools of Organization DesignInformation processing1970s to the presentWhat it claimsThe more uncertain the task, the more information must be processed during its execution. An organization either reduces that need, through slack resources or self-contained tasks, or raises its capacity, through vertical information systems or lateral relations up to the matrix.What it has shownGalbraith (1973, 1974) built the framework from cases and from Simon's theory of bounded rationality, and Tushman and Nadler (1978) set it out as an integrating concept for design. Daft and Lengel (1986) argued that structure must reduce equivocality as well as supply data.Who disputes itThe Carnegie school and the attention-based view: Ocasio holds that firm behavior results from how the firm channels and distributes attention, so structure governs where attention goes, not only how much is processed.Information processing in The Schools of Organization DesignLabor process and critical theory1970s to the presentWhat it claimsStructure is above all a system of control over labor. Braverman argued that management deskills work by separating conception from execution; Edwards traced a sequence from simple control by the boss to technical control through machines to bureaucratic control through rules.What it has shownHistorical and theoretical (Braverman 1974; Edwards 1979). Delbridge (1995), observing a Japanese-owned plant in England, found that just-in-time and total quality regimes combined the control of labor with management's economic goals more completely than piece rates had.Who disputes itBureaucracy and its critics: Adler argues that labor process theory ignores the progressive socialization of the labor process, which drives long-term skill upgrading, and disputes deskilling as the trend.Labor process and critical theory in The Schools of Organization DesignStrategic choice1970s to the presentWhat it claimsStructure is the outcome of choices by those with power in the organization, who decide on strategic action, including the structural form, the manipulation of environmental features, and the performance standards to be met. Context constrains but does not determine structure.What it has shownLargely conceptual: Child (1972) built the argument from gaps in contingency findings, and the empirical case rests mostly on the modest share of structural variance contingencies explain. A 2026 review of 42 studies finds upper echelons theory their main theoretical anchor.Who disputes itStructural contingency theory: Donaldson replies that organizations mostly adopt the structures their contingencies dictate, to avoid the loss of performance misfit brings, so choice over structure is at most limited.Strategic choice in The Schools of Organization DesignThe German codetermination literature1970s to the presentWhat it claimsWorks councils and employee board seats form a structural layer through which coordination can become negotiation between management and employees. Defenders argue that it supports long-term employment, training, and cooperation; critics, that it weakens shareholder control.What it has shownJäger, Schoefer, and Heining (2021) found board-level codetermination left wages unchanged and, if anything, raised capital formation. Jirjahn (2011) reports studies pointing to positive works council effects; a meta-analysis found codetermination laws tied to lower productivity.Who disputes itOrganizational economics (Gorton and Schmid) found that firms with equal employee and shareholder representation did worse for their shareholders than firms with one-third employee representation.The German codetermination literature in The Schools of Organization DesignOrganizational economics: decision rights, authority, and complementarities1976 to the presentWhat it claimsDesign is the joint choice of who holds which decision rights, how performance is measured, and how it is rewarded. Rights should be placed where the specific knowledge lies, formal authority differs from real authority, and practices are complements that pay off in clusters.What it has shownIchniowski, Shaw, and Prennushi (1997) found, on 36 steel finishing lines, that lines using a set of innovative work practices achieved substantially higher productivity, consistent with complementarities. Bloom and colleagues found more decentralization where trust was higher.Who disputes itGhoshal argued that management research has shaped managers' worldview with ideologically inspired amoral theories, built on a scientific model that excludes human intentionality and so denies moral considerations.Organizational economics: decision rights, authority, and complementarities in The Schools of Organization DesignInstitutional theory1977 to the presentWhat it claimsFormal structures are often adopted because they are legitimate in the organization's field, as rationalized myths, and then decoupled from the work done. Organizations in a field grow alike through coercive, mimetic, and normative isomorphism, whether or not it is efficient.What it has shownTolbert and Zucker (1983) found that city characteristics predicted early but not later adoption of civil service reform, which they read as institutionalization. Palmer, Jennings, and Zhou (1993) found support for institutional and economic accounts of late M-form adoption.Who disputes itStructural contingency theory: Kraatz and Zajac found little support for neoinstitutional predictions in 631 liberal arts colleges, which grew less alike; the change they studied was curricular, not structural.Institutional theory in The Schools of Organization DesignPopulation ecology1977 to the presentWhat it claimsOrganizations face strong structural inertia, because selection favors the reliability and accountability of stable structures. Change in a population's forms comes mainly from founding and failure, not adaptation, and changing core features resets the liability of newness.What it has shownAmburgey, Kelly, and Barnett (1993) found that the effects of change on the hazard of failure vary by type of change and over time, and that rates of change depend on how often and how recently an organization has changed. Carroll and Hannan (2000) set out the program's methods.Who disputes itFor structural contingency theory, Donaldson argues that ecology understates managers' capacity to adapt structure.Population ecology in The Schools of Organization DesignResource dependence1978 to the presentWhat it claimsOrganizations depend on outside parties for critical resources, and structure follows the management of that dependence: units that cope with critical dependencies gain power, and boundaries are redrawn through cooptation, joint ventures, and mergers to absorb constraint.What it has shownPfeffer and Salancik (1978) assembled studies of boards, mergers, and joint ventures. A meta-analysis of 157 tests (Drees and Heugens 2013) corroborated the main prediction: organizations meet resource dependencies with interorganizational arrangements that raise their autonomy.Who disputes itTransaction cost economics and the M-form hypothesis explains boundaries by efficiency; resource dependence, by power and constraint.Resource dependence in The Schools of Organization DesignThe business-groups literature1978 to the presentWhat it claimsGroups of legally independent firms bound by ownership and social ties are a durable form of their own, neither one firm nor a market. Where institutions function poorly, groups can benefit member firms and can destroy value; they are sometimes paragons, sometimes parasites.What it has shownKhanna and Palepu (2000) found that affiliates of the most diversified Indian groups outperformed unaffiliated firms. A meta-analysis of 141 studies (Carney and colleagues 2011) found that affiliation lowers performance in general, less so where institutions are underdeveloped.Who disputes itOrganizational economics: agency writers read pyramids and cross-holdings as devices that separate control from ownership; Almeida and Wolfenzon offer a financing rationale for pyramids instead.The business-groups literature in The Schools of Organization DesignScandinavian institutionalism1980s to the presentWhat it claimsIdeas of organizing do not diffuse unchanged; they travel and are translated as they are adopted, so a form taken up in one place is not the same form elsewhere. Organizations can also be built of organizations (meta-organizations), which behave differently.What it has shownA discussion paper by Czarniawska and Joerges (1995) contrasts the diffusion of ideas with their translation, drawing on examples such as Swedish municipal reform; the work on meta-organizations (Ahrne and Brunsson 2008) is conceptual.Who disputes itInstitutional theory can read the same processes, seen from a translocal view, as institutional isomorphism, though translation holds that each adopter modifies an idea, so an institution re-created elsewhere is new.Scandinavian institutionalism in The Schools of Organization DesignSocietal effect and comparative business systems1980s to the presentWhat it claimsFirms matched on size, technology, and industry differ systematically by country, because how a society educates, trains, recruits, and promotes its workforce, and its industrial relations, shape how work is divided and supervised, so structure is partly a national product.What it has shownMaurice, Sorge, and Warner (1980) compared closely matched manufacturing units in France, West Germany, and Great Britain and found more pervasive differences in their organization than usually recognized. Whitley (1999) set out a comparative account of business systems.Who disputes itStructural contingency theory stresses culture-free elements of structure; matched comparisons find nationally different shapes of organization.Societal effect and comparative business systems in The Schools of Organization DesignThe network perspective on organizations1985 to the presentWhat it claimsOrganizations and their members are nodes joined by ties, and the pattern of ties shapes what they can do. Economic action is embedded in networks of personal relations (Granovetter 1985), and network forms are a distinct form, not a hybrid of market and hierarchy (Powell 1990).What it has shownPodolny and Page (1998) review the research and find that network forms foster learning, confer status and legitimacy, bring economic benefits, help manage resource dependencies, and give employees considerable autonomy, and they ask for attention to networks' dysfunctions.Who disputes itTransaction cost economics: Williamson treats the hybrid as a third generic form between market and hierarchy; for Powell, network forms are a distinct form, not a mix of the two.The network perspective on organizations in The Schools of Organization DesignComputational organization design and search1990s to the presentWhat it claimsDesign choices interact, so design space is a rugged landscape with many local peaks, and structure affects how well an organization searches it. Decentralizing interdependent decisions can trap units on poor peaks; temporary decentralization, then reintegration, can help.What it has shownMostly simulation, with one field test: Csaszar (2012), with more than 150,000 stock-picking decisions by 609 mutual funds, found that decision-making structure affects the number of initiatives pursued and the omission and commission errors made.Who disputes itNo school in the record disputes it head on; it disputes structural contingency theory, whose bivariate fit, its simulations show, cannot capture how the best design depends on interactions among choices.Computational organization design and search in The Schools of Organization DesignThe new-forms debate1990s to the presentWhat it claimsOrganizations must solve four universal problems (dividing tasks, allocating them, providing rewards, and providing information), and a form is new when it solves them in new ways. Self-managing organizations radically decentralize authority; skeptics hold hierarchy reappears.What it has shownFoss (2003) traced the rise and partial reversal of Oticon's spaghetti organization to the problem of selective intervention. A meta-analysis of 54 studies of 13,914 teams (Greer and colleagues 2018) found that hierarchy within teams on net slightly lowers team performance.Who disputes itBureaucracy and its critics: removing formal structure leaves informal elites whose power is unaccountable (Freeman), and democratic and network organizations are much less hierarchy-free than their labels suggest.The new-forms debate in The Schools of Organization DesignThe algorithmic-management literature2015 to the presentWhat it claimsSoftware does much of the directing, evaluating, and disciplining that managers and rules once did. Kellogg, Valentine, and Christin (2020) call algorithmic control a new contested terrain; Puranam (2021) treats dividing decisions between people and machines as a design problem.What it has shownMostly qualitative field studies of gig work. Wood and colleagues (2019), with 107 interviews in six countries and 679 survey respondents, found that algorithmic management tends to give remote gig workers flexibility and autonomy, but also low pay, isolation, and overwork.Who disputes itLabor process and critical theory reads control at work as contested terrain; Kellogg, Valentine, and Christin take up that view but argue that algorithmic control is distinct from earlier forms.The algorithmic-management literature in The Schools of Organization DesignFunctional structureOrigin: 1911 to 1937.Family: Classical hierarchies.Line and staffOrigin: 1916 to 1943.Family: Classical hierarchies.Multidivisional (M-form) by productOrigin: 1920s practice; named and analyzed 1962 to 1975.Family: Divisionalized forms.Machine bureaucracyOrigin: 1922 (Weber); 1979 (Mintzberg).Family: Classical hierarchies.Divisional by customer or market segmentOrigin: 1937; 2005.Family: Divisionalized forms.Matrix organizationOrigin: 1950s to 1960s practice; analyzed 1971 to 1977.Family: Lateral and multidimensional forms.Co-determined organizationOrigin: 1951 to 1976 (the laws); 1984 to 2022 (the main studies).Family: Forms from other traditions.Socio-technical autonomous work groupsOrigin: 1951 to 1965.Family: Team-based and self-managing forms.Stratified hierarchy (requisite organization)Origin: 1951 to 1989.Family: Classical hierarchies.Cooperative organizationOrigin: 1958 to 1999.Family: Forms from other traditions.Linking-pin organization (System 4)Origin: 1961 to 1967.Family: Team-based and self-managing forms.Divisional by regionOrigin: 1962 to 1972.Family: Divisionalized forms.Adhocracy (innovative organization)Origin: 1968 to 1979.Family: Professional, project, and knowledge forms.J-form (the Japanese firm)Origin: 1968 to 1990.Family: Forms from other traditions.Professional bureaucracyOrigin: 1968 to 1979.Family: Professional, project, and knowledge forms.Holding company (H-form)Origin: 1972 to 1975; 1987.Family: Divisionalized forms.Ambidextrous organizationOrigin: 1976 to 2004.Family: Professional, project, and knowledge forms.Simple structureOrigin: 1979.Family: Classical hierarchies.Hybrid structureOrigin: 1980 to the present.Family: Lateral and multidimensional forms.Missionary (ideological) organizationOrigin: 1980 to 1989.Family: Ideological forms.Network, modular, and virtual organizationOrigin: 1986 to 1990.Family: Network and market-like forms.Transnational and multidimensional organizationOrigin: 1987 to 1989.Family: Lateral and multidimensional forms.Business group (keiretsu, chaebol, family house)Origin: 1988 to 2007.Family: Forms from other traditions.Shamrock organizationOrigin: 1988 to 1989.Family: Network and market-like forms.Federal organizationOrigin: 1989 to 1992.Family: Network and market-like forms.Self-managing organization (less-hierarchical forms)Origin: 1989 to 2017.Family: Team-based and self-managing forms.Boundaryless organizationOrigin: 1990 to 1995.Family: Network and market-like forms.Front-back organizationOrigin: 1990s to 2007.Family: Lateral and multidimensional forms.Professional partnership (P2 form)Origin: 1990.Family: Professional, project, and knowledge forms.The corporate center and shared servicesOrigin: 1991 to 2000.Family: Divisionalized forms.Internal market organizationOrigin: 1993 to 1994.Family: Network and market-like forms.Process (horizontal) organizationOrigin: 1993 to 1999.Family: Lateral and multidimensional forms.Cellular organizationOrigin: 1994 to 1997.Family: Network and market-like forms.Hypertext organizationOrigin: 1994 to 1995.Family: Forms from other traditions.Team-based organizationOrigin: 1995.Family: Team-based and self-managing forms.Project-based organizationOrigin: 2000 to 2006.Family: Professional, project, and knowledge forms.Agile at scaleOrigin: 2001 to 2016.Family: Contemporary and emerging forms.Distributed (all-remote) organizationOrigin: 2002 to 2021.Family: Contemporary and emerging forms.Open-source and community-based organizationOrigin: 2002 to 2007.Family: Contemporary and emerging forms.Algorithmically managed organizationOrigin: 2015 to 2020.Family: Contemporary and emerging forms.Team of teamsOrigin: 2015.Family: Team-based and self-managing forms.

The schools by first year

  1. Bureaucracy and its critics1900s to 1950s, revived from the 1990sWhat it claimsWeber held that rational-legal authority exercised through an office hierarchy, written rules, trained officials, and promotion by qualification is technically superior in precision, speed, and reliability. Critics studied its unintended consequences, Michels's iron law sharpest.What it has shownMerton (1940) argued, with no test, that rules can turn from means into ends; case studies followed. The Aston group concluded that the type's dimensions vary independently, and Wagner's meta-analysis (2021) found that many of their interrelationships have weakened.Who disputes itHuman relations and System 4 sets the costs of impersonal rules to motivation and cooperation against the technical superiority Weber stresses.
  2. Classical administration1910s to 1940s, and in German to the 1970sWhat it claimsThere are general principles of administration, among them division of work, unity of command, a scalar chain of authority, and a limited span of control, and a structure built to them will be efficient in most settings. Taylor added that planners should set work methods.What it has shownThe school offered reasoning and experience, not tests. Woodward (1965) found that the spans and levels of the more successful firms in her sample differed by production system, and Simon (1946) showed that the principles come in pairs that point in opposite directions.Who disputes itStructural contingency theory found that the structure of successful firms varies with technology and environment, where classical writers treat their principles as general.
  3. Human relations and System 41920s to 1960sWhat it claimsOutput depends on the social relations of work, the norms of informal groups, and the style of supervision as much as on formal design. Likert's System 4, overlapping work groups joined by linking-pin managers under participative management, outperforms authoritative systems.What it has shownThe founding evidence is the Hawthorne studies, which later reanalyses dispute (Carey 1967; Levitt and List 2011). Likert's support came largely from his own institute's surveys. Wagner (1994) found participation's effects on performance and satisfaction significant but small.Who disputes itLabor process and critical theory reads human relations as a technique of managerial control rather than a change in the distribution of power.
  4. Transaction cost economics and the M-form hypothesis1937, then the 1970s to the presentWhat it claimsFirms exist, and are organized as they are, to economize on transaction costs. Hierarchy replaces the market when assets are specific, uncertainty is high, and exchange is frequent, and the multidivisional form should outperform the functional form in large, diversified firms.What it has shownArmour and Teece (1978) found, in United States petroleum firms from 1955 to 1973, a positive relationship between the multidivisional form and profitability while the form was spreading, but not once an equilibrium in organizational form was reached.Who disputes itThe network perspective on organizations: Granovetter argued that the theory undersocializes economic action, which is embedded in networks of personal relations that also produce trust and order.
  5. The Carnegie school and the attention-based view1940s to the presentWhat it claimsPeople in organizations are boundedly rational, so structure matters because it sets the premises of their decisions and channels their attention: who sees which problems, which goals they pursue, and which routines they follow. Ocasio makes structure distribute attention.What it has shownMarch and Simon (1958) drew propositions from the existing literature, and Cyert and March (1963) added process models and simulations. Two studies show hierarchy shaping what is sent up as well as what is chosen (Reitzig and Maciejovsky 2015; Keum and See 2017).Who disputes itOrganizational economics: decision rights, authority, and complementarities models a principal and agents with defined objectives; the Carnegie school, firms as coalitions with unresolved goal conflict.
  6. Socio-technical systems1950s to 1980sWhat it claimsAn organization is a social system and a technical system that must be designed together. The same technology admits more than one way of organizing work, and groups that own a whole task and control its variances at the source perform better and are more satisfied.What it has shownTrist and Bamforth (1951) found that longwall mechanization broke up self-regulating work groups. A review of 134 experiments found them extremely successful overall, and Stewart (2006) linked team autonomy to performance; studies of socialist brigades and Volkswagen qualify it.Who disputes itLabor process and critical theory: Kelly argued that labor intensification, not joint optimization, accounts for what socio-technical redesign achieved, and that the part of pay incentives was seriously underestimated.
  7. The economics of the labor-managed firm and of enterprise ownership1958 to the presentWhat it claimsA firm run by its workers behaves differently from one run for investors: Ward modeled the Yugoslav-style firm as maximizing income per worker. Hansmann argued that an ownership form's success depends on the balance between the costs of market contracting and of ownership.What it has shownBurdín (2014) found a 29 percent lower hazard of dissolution for Uruguayan worker-managed firms than for conventional ones, and Fakhfakh, Pérotin, and Gago (2012) found French labor-managed firms as productive or more so in every industry studied.Who disputes itOrganizational economics (Jensen and Meckling) contrasts the labor-managed firm, in which tradable residual claims are legally prohibited, with cooperatives and partnerships that arise out of voluntary contracting.
  8. Modularity and the mirroring hypothesis1960s to the presentWhat it claimsComplex systems are built of nearly decomposable parts, and an organization's structure tends to mirror the architecture of what it makes: modular products allow loosely coupled organizations, and tightly coupled products need tightly coupled teams. Conway's law runs in reverse.What it has shownColfer and Baldwin (2016) review the empirical studies and report both support and principled exceptions. Direct tests point both ways: MacCormack, Baldwin, and Rusnak (2012) found open source products more modular than their commercial pairs; dynamic components break the mirror.Who disputes itNo school in the record disputes it head on; it answers information processing, which meets the coordination load inside the organization; mirroring writers locate it in the product's architecture.
  9. Strategy and structure1960s to 1980sWhat it claimsStructure follows strategy: firms that diversify by product or geography outgrow the centralized functional structure and, after a lag and usually a crisis, adopt divisions. Chandler drew this from the histories of DuPont, General Motors, Standard Oil of New Jersey, and Sears.What it has shownChandler (1962) is comparative business history of four firms set against a wider survey. Rumelt (1974) related diversification and structure to performance, and Egelhoff (1988), with 34 multinationals, found some of Stopford and Wells's relationships supported and others not.Who disputes itInstitutional theory: in Fligstein's model divisions spread with a product-related or unrelated strategy, presidents from sales or finance, and other firms in the industry changing; strategy was one of three.
  10. Structural contingency theory1960s to the presentWhat it claimsThere is no one best structure. Performance depends on fit between structure and contingencies such as environment, technology, size, and strategy, on an open-system view of the organization. Drazin and Van de Ven separate fit as selection, interaction, and systems.What it has shownBurns and Stalker, Woodward, and the Aston group related structure to context; Drazin and Van de Ven (1985) supported selection and systems fit only. Pennings (1975) found that fit did not explain effectiveness; Schoonhoven (1981) found traditional hypotheses unsupported.Who disputes itStrategic choice: Child argued that contingency theory explains structure by the constraints of context and leaves out the political process by which power-holders choose strategic action, structural forms included.
  11. The French bureaucratic school (strategic analysis)1960s to 1980sWhat it claimsA bureaucracy is a system of power relations organized around zones of uncertainty. Impersonal rules and centralization protect members from depending on one another, those who control uncertainties hold power, and, unable to correct its errors, it changes only through crisis.What it has shownLe phénomène bureaucratique (1963; English 1964) rests on two case studies, a clerical agency and a state industrial monopoly. L'acteur et le système (1977; English 1980) is theoretical.Who disputes itSocietal effect and comparative business systems: D'Iribarne argues that national logics of conduct, such as a French logic of honor, explain differences that Crozier attributed to power games.
  12. The Japanese-firm literature1960s to the presentWhat it claimsThe large Japanese firm coordinates operating decisions through horizontal information sharing among semi-autonomous shops and uses its ranking hierarchy mainly as an incentive scheme (Aoki). It creates knowledge through middle-up-down management (Nonaka and Takeuchi).What it has shownAoki (1986) is a formal model. Lincoln, Hanada, and McBride (1986) compared 51 Japanese and 55 United States manufacturing plants, and Nonaka and Takeuchi (1995) rest on case studies, chiefly of Japanese firms. Fruin (1994) found the enterprise system defined at three levels.Who disputes itLabor process and critical theory reads shop-floor delegation as control: Sewell and Wilkinson argue that just-in-time and total quality regimes delegate tactical responsibility while centralizing strategic control.
  13. The Scandinavian and Dutch socio-technical schools1960s to 2000sWhat it claimsThe Scandinavian program sought democracy at work through field experiments with semi-autonomous groups, then through democratic dialogue. The Dutch school's design theory turns complex organizations with simple jobs into simple organizations with complex jobs.What it has shownEmery and Thorsrud reported field experiments in Norwegian industry; Gustavsen (1992) records that they spread less than hoped, his reason for turning to dialogue. Berggren studied work organization in the Swedish auto industry. The Dutch work rests on design cases and argument.Who disputes itThe Japanese-firm literature: defenders of the Toyota system hold that standardized work with employee participation learns faster; Berggren reports Swedish long-cycle plants matching a line plant on productivity.
  14. Configuration theory1970s to the presentWhat it claimsStructures cluster into a small number of internally coherent configurations whose elements reinforce one another, so organizations move between a few types in large jumps, not small steps. Mintzberg's five configurations each rest on one coordinating mechanism.What it has shownDoty, Glick, and Huber (1993) found that fit to Miles and Snow's ideal types predicted effectiveness while fit to Mintzberg's did not. A meta-analysis of 40 tests (Ketchen and colleagues 1997) found that configuration partly explains performance, more so with broad definitions.Who disputes itStructural contingency theory: Donaldson counters that most organizations sit at intermediate points on a continuum of fits, not in a few configurations, and that studies over time find mostly incremental change.
  15. Information processing1970s to the presentWhat it claimsThe more uncertain the task, the more information must be processed during its execution. An organization either reduces that need, through slack resources or self-contained tasks, or raises its capacity, through vertical information systems or lateral relations up to the matrix.What it has shownGalbraith (1973, 1974) built the framework from cases and from Simon's theory of bounded rationality, and Tushman and Nadler (1978) set it out as an integrating concept for design. Daft and Lengel (1986) argued that structure must reduce equivocality as well as supply data.Who disputes itThe Carnegie school and the attention-based view: Ocasio holds that firm behavior results from how the firm channels and distributes attention, so structure governs where attention goes, not only how much is processed.
  16. Labor process and critical theory1970s to the presentWhat it claimsStructure is above all a system of control over labor. Braverman argued that management deskills work by separating conception from execution; Edwards traced a sequence from simple control by the boss to technical control through machines to bureaucratic control through rules.What it has shownHistorical and theoretical (Braverman 1974; Edwards 1979). Delbridge (1995), observing a Japanese-owned plant in England, found that just-in-time and total quality regimes combined the control of labor with management's economic goals more completely than piece rates had.Who disputes itBureaucracy and its critics: Adler argues that labor process theory ignores the progressive socialization of the labor process, which drives long-term skill upgrading, and disputes deskilling as the trend.
  17. Strategic choice1970s to the presentWhat it claimsStructure is the outcome of choices by those with power in the organization, who decide on strategic action, including the structural form, the manipulation of environmental features, and the performance standards to be met. Context constrains but does not determine structure.What it has shownLargely conceptual: Child (1972) built the argument from gaps in contingency findings, and the empirical case rests mostly on the modest share of structural variance contingencies explain. A 2026 review of 42 studies finds upper echelons theory their main theoretical anchor.Who disputes itStructural contingency theory: Donaldson replies that organizations mostly adopt the structures their contingencies dictate, to avoid the loss of performance misfit brings, so choice over structure is at most limited.
  18. The German codetermination literature1970s to the presentWhat it claimsWorks councils and employee board seats form a structural layer through which coordination can become negotiation between management and employees. Defenders argue that it supports long-term employment, training, and cooperation; critics, that it weakens shareholder control.What it has shownJäger, Schoefer, and Heining (2021) found board-level codetermination left wages unchanged and, if anything, raised capital formation. Jirjahn (2011) reports studies pointing to positive works council effects; a meta-analysis found codetermination laws tied to lower productivity.Who disputes itOrganizational economics (Gorton and Schmid) found that firms with equal employee and shareholder representation did worse for their shareholders than firms with one-third employee representation.
  19. Organizational economics: decision rights, authority, and complementarities1976 to the presentWhat it claimsDesign is the joint choice of who holds which decision rights, how performance is measured, and how it is rewarded. Rights should be placed where the specific knowledge lies, formal authority differs from real authority, and practices are complements that pay off in clusters.What it has shownIchniowski, Shaw, and Prennushi (1997) found, on 36 steel finishing lines, that lines using a set of innovative work practices achieved substantially higher productivity, consistent with complementarities. Bloom and colleagues found more decentralization where trust was higher.Who disputes itGhoshal argued that management research has shaped managers' worldview with ideologically inspired amoral theories, built on a scientific model that excludes human intentionality and so denies moral considerations.
  20. Institutional theory1977 to the presentWhat it claimsFormal structures are often adopted because they are legitimate in the organization's field, as rationalized myths, and then decoupled from the work done. Organizations in a field grow alike through coercive, mimetic, and normative isomorphism, whether or not it is efficient.What it has shownTolbert and Zucker (1983) found that city characteristics predicted early but not later adoption of civil service reform, which they read as institutionalization. Palmer, Jennings, and Zhou (1993) found support for institutional and economic accounts of late M-form adoption.Who disputes itStructural contingency theory: Kraatz and Zajac found little support for neoinstitutional predictions in 631 liberal arts colleges, which grew less alike; the change they studied was curricular, not structural.
  21. Population ecology1977 to the presentWhat it claimsOrganizations face strong structural inertia, because selection favors the reliability and accountability of stable structures. Change in a population's forms comes mainly from founding and failure, not adaptation, and changing core features resets the liability of newness.What it has shownAmburgey, Kelly, and Barnett (1993) found that the effects of change on the hazard of failure vary by type of change and over time, and that rates of change depend on how often and how recently an organization has changed. Carroll and Hannan (2000) set out the program's methods.Who disputes itFor structural contingency theory, Donaldson argues that ecology understates managers' capacity to adapt structure.
  22. Resource dependence1978 to the presentWhat it claimsOrganizations depend on outside parties for critical resources, and structure follows the management of that dependence: units that cope with critical dependencies gain power, and boundaries are redrawn through cooptation, joint ventures, and mergers to absorb constraint.What it has shownPfeffer and Salancik (1978) assembled studies of boards, mergers, and joint ventures. A meta-analysis of 157 tests (Drees and Heugens 2013) corroborated the main prediction: organizations meet resource dependencies with interorganizational arrangements that raise their autonomy.Who disputes itTransaction cost economics and the M-form hypothesis explains boundaries by efficiency; resource dependence, by power and constraint.
  23. The business-groups literature1978 to the presentWhat it claimsGroups of legally independent firms bound by ownership and social ties are a durable form of their own, neither one firm nor a market. Where institutions function poorly, groups can benefit member firms and can destroy value; they are sometimes paragons, sometimes parasites.What it has shownKhanna and Palepu (2000) found that affiliates of the most diversified Indian groups outperformed unaffiliated firms. A meta-analysis of 141 studies (Carney and colleagues 2011) found that affiliation lowers performance in general, less so where institutions are underdeveloped.Who disputes itOrganizational economics: agency writers read pyramids and cross-holdings as devices that separate control from ownership; Almeida and Wolfenzon offer a financing rationale for pyramids instead.
  24. Scandinavian institutionalism1980s to the presentWhat it claimsIdeas of organizing do not diffuse unchanged; they travel and are translated as they are adopted, so a form taken up in one place is not the same form elsewhere. Organizations can also be built of organizations (meta-organizations), which behave differently.What it has shownA discussion paper by Czarniawska and Joerges (1995) contrasts the diffusion of ideas with their translation, drawing on examples such as Swedish municipal reform; the work on meta-organizations (Ahrne and Brunsson 2008) is conceptual.Who disputes itInstitutional theory can read the same processes, seen from a translocal view, as institutional isomorphism, though translation holds that each adopter modifies an idea, so an institution re-created elsewhere is new.
  25. Societal effect and comparative business systems1980s to the presentWhat it claimsFirms matched on size, technology, and industry differ systematically by country, because how a society educates, trains, recruits, and promotes its workforce, and its industrial relations, shape how work is divided and supervised, so structure is partly a national product.What it has shownMaurice, Sorge, and Warner (1980) compared closely matched manufacturing units in France, West Germany, and Great Britain and found more pervasive differences in their organization than usually recognized. Whitley (1999) set out a comparative account of business systems.Who disputes itStructural contingency theory stresses culture-free elements of structure; matched comparisons find nationally different shapes of organization.
  26. The network perspective on organizations1985 to the presentWhat it claimsOrganizations and their members are nodes joined by ties, and the pattern of ties shapes what they can do. Economic action is embedded in networks of personal relations (Granovetter 1985), and network forms are a distinct form, not a hybrid of market and hierarchy (Powell 1990).What it has shownPodolny and Page (1998) review the research and find that network forms foster learning, confer status and legitimacy, bring economic benefits, help manage resource dependencies, and give employees considerable autonomy, and they ask for attention to networks' dysfunctions.Who disputes itTransaction cost economics: Williamson treats the hybrid as a third generic form between market and hierarchy; for Powell, network forms are a distinct form, not a mix of the two.
  27. Computational organization design and search1990s to the presentWhat it claimsDesign choices interact, so design space is a rugged landscape with many local peaks, and structure affects how well an organization searches it. Decentralizing interdependent decisions can trap units on poor peaks; temporary decentralization, then reintegration, can help.What it has shownMostly simulation, with one field test: Csaszar (2012), with more than 150,000 stock-picking decisions by 609 mutual funds, found that decision-making structure affects the number of initiatives pursued and the omission and commission errors made.Who disputes itNo school in the record disputes it head on; it disputes structural contingency theory, whose bivariate fit, its simulations show, cannot capture how the best design depends on interactions among choices.
  28. The new-forms debate1990s to the presentWhat it claimsOrganizations must solve four universal problems (dividing tasks, allocating them, providing rewards, and providing information), and a form is new when it solves them in new ways. Self-managing organizations radically decentralize authority; skeptics hold hierarchy reappears.What it has shownFoss (2003) traced the rise and partial reversal of Oticon's spaghetti organization to the problem of selective intervention. A meta-analysis of 54 studies of 13,914 teams (Greer and colleagues 2018) found that hierarchy within teams on net slightly lowers team performance.Who disputes itBureaucracy and its critics: removing formal structure leaves informal elites whose power is unaccountable (Freeman), and democratic and network organizations are much less hierarchy-free than their labels suggest.
  29. The algorithmic-management literature2015 to the presentWhat it claimsSoftware does much of the directing, evaluating, and disciplining that managers and rules once did. Kellogg, Valentine, and Christin (2020) call algorithmic control a new contested terrain; Puranam (2021) treats dividing decisions between people and machines as a design problem.What it has shownMostly qualitative field studies of gig work. Wood and colleagues (2019), with 107 interviews in six countries and 679 survey respondents, found that algorithmic management tends to give remote gig workers flexibility and autonomy, but also low pay, isolation, and overwork.Who disputes itLabor process and critical theory reads control at work as contested terrain; Kellogg, Valentine, and Christin take up that view but argue that algorithmic control is distinct from earlier forms.

The forms by first year

  1. Functional structure: 1911 to 1937
  2. Line and staff: 1916 to 1943
  3. Multidivisional (M-form) by product: 1920s practice; named and analyzed 1962 to 1975
  4. Machine bureaucracy: 1922 (Weber); 1979 (Mintzberg)
  5. Divisional by customer or market segment: 1937; 2005
  6. Matrix organization: 1950s to 1960s practice; analyzed 1971 to 1977
  7. Co-determined organization: 1951 to 1976 (the laws); 1984 to 2022 (the main studies)
  8. Socio-technical autonomous work groups: 1951 to 1965
  9. Stratified hierarchy (requisite organization): 1951 to 1989
  10. Cooperative organization: 1958 to 1999
  11. Linking-pin organization (System 4): 1961 to 1967
  12. Divisional by region: 1962 to 1972
  13. Adhocracy (innovative organization): 1968 to 1979
  14. J-form (the Japanese firm): 1968 to 1990
  15. Professional bureaucracy: 1968 to 1979
  16. Holding company (H-form): 1972 to 1975; 1987
  17. Ambidextrous organization: 1976 to 2004
  18. Simple structure: 1979
  19. Hybrid structure: 1980 to the present
  20. Missionary (ideological) organization: 1980 to 1989
  21. Network, modular, and virtual organization: 1986 to 1990
  22. Transnational and multidimensional organization: 1987 to 1989
  23. Business group (keiretsu, chaebol, family house): 1988 to 2007
  24. Shamrock organization: 1988 to 1989
  25. Federal organization: 1989 to 1992
  26. Self-managing organization (less-hierarchical forms): 1989 to 2017
  27. Boundaryless organization: 1990 to 1995
  28. Front-back organization: 1990s to 2007
  29. Professional partnership (P2 form): 1990
  30. The corporate center and shared services: 1991 to 2000
  31. Internal market organization: 1993 to 1994
  32. Process (horizontal) organization: 1993 to 1999
  33. Cellular organization: 1994 to 1997
  34. Hypertext organization: 1994 to 1995
  35. Team-based organization: 1995
  36. Project-based organization: 2000 to 2006
  37. Agile at scale: 2001 to 2016
  38. Distributed (all-remote) organization: 2002 to 2021
  39. Open-source and community-based organization: 2002 to 2007
  40. Algorithmically managed organization: 2015 to 2020
  41. Team of teams: 2015

Twenty-three of the 29 schools run to the present, and 16 of those began in the 1970s or later. The forms arrive in waves: 14 of the 41 first appear between 1985 and 1994.

Source: Fayol 1949; Weber 1978; Mayo 1933; Trist and Bamforth 1951, an interview-based field study in one industry; Burns and Stalker 1961, a field study of twenty firms; Mintzberg 1979; Child 1972a; Coase 1937; Meyer and Rowan 1977; Hannan and Freeman 1977; Galbraith 1973; Jensen and Meckling 1976; Crozier 1963; Emery and Thorsrud 1969; Yoshino 1968; Streeck 1984a; Kellogg and colleagues 2020, a review of earlier research through one theoretical lens, with no new data; Puranam and colleagues 2014, a conceptual argument; Chandler 1962, several independent case histories by a historian; Pfeffer and Salancik 1978; Simon 1946; Maurice and colleagues 1980, a comparison of matched factories in three countries; Levinthal 1997; Simon 1962; Braverman 1974; Hamilton and Biggart 1988, a comparison of three economies by scholars; Ward 1958; Czarniawska and Joerges 1995; Granovetter 1985.

The form answered how a professional firm is governed when its owners are also its producers and managers. Its object is the large professional partnership, exemplified in accounting, law, and medicine; its data come from accounting.

The 1990 authors draw on Mintzberg (1979) for the strategic apex; reading the form as his professional bureaucracy with ownership added is ours.

Where it fits

Only size rests on evidence, from studies comparing ownership forms; theory or our judgment carries the other factors. Pennings (1975), a quantitative field test of the structural-contingency model, found environment and structure fit did not explain effectiveness, which limits the uncertainty and complexity claims; Donaldson (2001) attributes such early failures to methodological limitations.

The professional partnership (P2 form) against the twelve contingency factors

Each factor at its three levels, Fits, Partial, or Strain; select a row for its reason, sources, and grade.

Select a factor to read its reason, sources, basis, and grade.Size. Private (non-public) ownership, the class the partnership belongs to, has its clearest advantage over public ownership in small firms; in large ones the evidence is split. Basis: Evidence. Grade: a multi-firm empirical study or several independent case studies by scholars. Sources: von Nordenflycht 2007; von Nordenflycht 2014; Greenwood and colleagues 2007. View 1: Small fits, Medium fits, Large partial. The disadvantage of public ownership against non-public ownership appears only in small professional firms, and public corporations look viable for large ones, so the non-public owner loses its edge at large size. Sources: von Nordenflycht 2007; von Nordenflycht 2014. View 2: Small fits, Medium fits, Large fits. Among large management consultancies, partnerships and private corporations outperformed public ones, attributed to closer owner monitoring and professionals' pursuit of ownership stakes. Sources: Greenwood and colleagues 2007.Age. Partnerships work at every age: firms are often founded as partnerships, and old law and accounting firms keep the form, adding managerial layers on top of it rather than replacing it. Basis: Judgment. Sources: Pinnington and Morris 2003; Cooper and colleagues 1996; Greiner 1972.Environmental uncertainty (unpredictability, dynamism). Collegial decision among owner-partners serves stable and shifting conditions; whether it keeps up with sharp change is untested, and in the one case of an internal crisis a hidden hierarchy surfaced and the partners acted decisively. Basis: Judgment. Sources: Empson 2019; Pennings 1975.Environmental complexity. Partner-run professional firms do work too complex to standardize; complexity favors them, though the claim was made for the professional bureaucracy they belong with. Basis: Theory. Grade: conceptual only, no empirical test. Sources: Mintzberg 1980; Greenwood and colleagues 2007; Pennings 1975.Munificence and hostility. In one firm's crisis the partners' collegial leadership changed rather than broke, as a hidden hierarchy let them act decisively; a crisis inside one firm is not a hostile environment, so the factor is not settled. Basis: Judgment. Sources: Empson 2019.Diversity of products and markets. In our judgment, partners who judge and monitor one another's work can do so most easily in one field and least across unrelated practices. Basis: Judgment. Sources: Empson 2017.Strategy type. Works disagree: the partnership's little-formalized, decentralized core is the opposite of the design Burton and Obel give a defender, while Mintzberg places the professional bureaucracy, which the partnership extends, in stable environments; Burton and Obel exclude the professional bureaucracy for a prospector, but partners are owners who can open new practices, so whether that rule reaches the partnership is not settled. Basis: Judgment. Sources: Burton and Obel 2004; Mintzberg 1980. View 1: Defender (exploitation) strain, Analyzer (exploitation and exploration) partial, Prospector (exploration) partial. Burton and Obel give a defender high formalization and centralization and a functional design, which collegial control among partners meets in neither respect; their exclusion of the professional bureaucracy for a prospector may not reach owners who can open new practices. Sources: Burton and Obel 2004. View 2: Defender (exploitation) partial, Analyzer (exploitation and exploration) partial, Prospector (exploration) partial. Mintzberg places the professional bureaucracy in complex but stable environments, which a defender's narrow, stable domain shares, so the partnership built on it is not ruled out for a defender, and partners who can open new practices are not ruled out for a prospector. Sources: Mintzberg 1980.Technology and routineness. As in the professional bureaucracy, partners apply trained skill to varied cases, which suits many exceptions with known methods better than routine work or work with no known method. Basis: Judgment. Sources: Mintzberg 1980; Van de Ven and colleagues 2013; Hickson and colleagues 1969; Mohr 1971.Interdependence. Partners who serve their own clients on shared standards fit pooled work; engagements that need several practices to adjust to each other strain collegial control. Basis: Judgment. Sources: Thompson 1967; Empson 2017.Knowledge intensity and professionalization. Ownership, production, and management fused in senior professionals rest on a professionalized workforce; where professional norms bind, public corporations stay out of the industry, and where they do not, other ownership forms appear as capital matters more. Basis: Theory. Grade: conceptual only, no empirical test. Sources: von Nordenflycht 2010; Greenwood and Empson 2003; Greenwood and colleagues 2007; von Nordenflycht 2007; von Nordenflycht 2014; Cooper and colleagues 1996. View 1: Low strain, Moderate partial, High fits. Ownership, production, and management fused in senior professionals rest on a professionalized workforce; partnerships are argued to give professionals superior incentives, and in large management consultancies partnerships and private corporations outperformed public ones. Sources: von Nordenflycht 2010; Greenwood and Empson 2003; Greenwood and colleagues 2007. View 2: Low strain, Moderate partial, High partial. Public ownership was no worse for large advertising agencies and did not stop them competing on highly skilled work; across five professional services public corporations stayed out mainly because of professional norms, and in two large law firms a managed archetype was layered over the partnership. Sources: von Nordenflycht 2007; von Nordenflycht 2014; Cooper and colleagues 1996.Global integration pressure. Large professional firms serving clients across countries have been described as differentiated on several axes at once, but no work read sets the partnership against integration pressure, so this factor gives no reason for or against. Basis: Judgment. Sources: Greenwood and colleagues 2010.Local responsiveness pressure. Large law firms taking their one-firm model abroad found local regulations, norms, and cultural frameworks affecting how far it could be reproduced, but no work read sets a level of this factor, so it gives no reason for or against. Basis: Judgment. Sources: Muzio and Faulconbridge 2013; Greenwood and colleagues 2010.

With the three contested cells counted by their first view, the 36 settings show Fits at 12, Partial at 19, and Strain at 5. Judgment is the basis of nine of the twelve cells.

Source: von Nordenflycht 2007, a panel study of many advertising agencies; von Nordenflycht 2014, a historical comparison across five professional industries; Greenwood and colleagues 2007, a quantitative study of many consulting firms; Pinnington and Morris 2003, a survey of 197 law firms; Cooper and colleagues 1996, two case studies by scholars; Greiner 1972, a conceptual model with no systematic test; Empson 2019, one case study; Pennings 1975, a quantitative field test of the structural-contingency model; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test; Empson 2017; Burton and Obel 2004; Van de Ven and colleagues 2013; Hickson and colleagues 1969, a multi-organization comparative survey; Mohr 1971, a quantitative field study of technology and structure; Thompson 1967; von Nordenflycht 2010; Greenwood and Empson 2003; Greenwood and colleagues 2010; Muzio and Faulconbridge 2013, one historical case study.

Your own situation against the professional partnership (P2 form)

Set any factor to outline its cell in the strip above; the lines under the switches give the counts, the form's place among the 41, and the misfit rules that fire.

Size
Age
Environmental uncertainty (unpredictability, dynamism)
Environmental complexity
Munificence and hostility
Diversity of products and markets
Strategy type
Technology and routineness
Interdependence
Knowledge intensity and professionalization
Global integration pressure
Local responsiveness pressure

Set: 0 of 12 factors. Fits on 0, Partial on 0, Strain on 0, Contested on 0.

Its place in the explorer's rankingEvery factor is on Any: all 41 forms tie, and the explorer lists them alphabetically.1st of 411st of 41, tied with one other1st of 41, tied with 0 othersSunk by a misfit rule: 1st of 41Sunk by a misfit rule: 1st of 41, tied with one otherSunk by a misfit rule: 1st of 41, tied with 0 others

  • Flagged (its sources disagree): A defender without written standards. Disputed: Burton and Obel 2004; against it, Mintzberg 1980.
  • Flagged (its sources disagree): A defender with authority spread wide. Disputed: Burton and Obel 2004; against it, Mintzberg 1980.
  • Flagged (its sources disagree): An analyzer whose stable core has no standards. Disputed: Burton and Obel 2004; against it, Burton and Obel 2004; Mintzberg 1980.
  • Flagged (it meets the form only through part of its profile): An analyzer with authority spread wide. Source: Burton and Obel 2004.
  • Flagged (its sources disagree): A large organization with few written rules. Disputed: Burton and Obel 2004; against it, Mintzberg 1980.
  • Flagged (its sources disagree): Routine work without written standards. Disputed: Burton and Obel 2004; against it, Trist and colleagues 1963; Pasmore and colleagues 1982; Beekun 1989; against it, Hickson and colleagues 1969; against it, Child and Mansfield 1972.
  • Flagged (its sources disagree): Few written rules in a stable environment. Disputed: Burton and Obel 2004; against it, Burton and Obel 2004; against it, Mintzberg 1980.
  • Flagged (its sources disagree): Reactor: a defender's strategy on a loose structure. Disputed: Miles and Snow 1978; Burton and Obel 2004; against it, Burton and colleagues 2015b; Snow and Hrebiniak 1980.

Ranking rule: by count of Fits on the factors the reader has set, then fewest Strains, then alphabetical; a fired misfit rule that no source disputes sinks the form to the bottom when every level of the form's profile meets it, a disputed one, or one that meets the form only through one end of a spanned level, one view of a contested profile cell, or one part of a two-part form, is flagged on the row (with both views where it is disputed), and a misfit between two of the reader's own settings is shown once above the list; a contested cell counts only where its views agree at the reader's level, and otherwise shows as Contested; factors on "Any" count for nothing; with every factor on "Any" the list is alphabetical and says so.

Open these settings in the explorer

The misfit rules that can fire for this form

  • A defender without written standards fires when Strategy type at Defender (exploitation): flagged (its sources disagree). Disputed: Burton and Obel 2004; against it, Mintzberg 1980.
  • A defender with authority spread wide fires when Strategy type at Defender (exploitation): flagged (its sources disagree). Disputed: Burton and Obel 2004; against it, Mintzberg 1980.
  • An analyzer whose stable core has no standards fires when Strategy type at Analyzer (exploitation and exploration): flagged (its sources disagree). Disputed: Burton and Obel 2004; against it, Burton and Obel 2004; Mintzberg 1980.
  • An analyzer with authority spread wide fires when Strategy type at Analyzer (exploitation and exploration): flagged (it meets the form only through part of its profile). Source: Burton and Obel 2004.
  • A large organization with few written rules fires when Size at Large: flagged (its sources disagree). Disputed: Burton and Obel 2004; against it, Mintzberg 1980.
  • Routine work without written standards fires when Technology and routineness at Routine: flagged (its sources disagree). Disputed: Burton and Obel 2004; against it, Trist and colleagues 1963; Pasmore and colleagues 1982; Beekun 1989; against it, Hickson and colleagues 1969; against it, Child and Mansfield 1972.
  • Few written rules in a stable environment fires when Environmental uncertainty (unpredictability, dynamism) at Stable: flagged (its sources disagree). Disputed: Burton and Obel 2004; against it, Burton and Obel 2004; against it, Mintzberg 1980.
  • Reactor: a defender's strategy on a loose structure fires when Strategy type at Defender (exploitation): flagged (its sources disagree). Disputed: Miles and Snow 1978; Burton and Obel 2004; against it, Burton and colleagues 2015b; Snow and Hrebiniak 1980.

Of the 39 contingency misfit rules, eight can fire for this form, and none would sink it. Seven are disputed, and the undisputed one, authority spread wide for an analyzer that does not innovate, meets only the decentralized view of the contested centralization row, so it flags the form as well.

Source: Burton and Obel 2004; Burton and colleagues 2020a.

  • Size. Evidence from ownership studies, contested. Fits small and medium, partial large, on von Nordenflycht's panel study of many advertising agencies (2007) and his historical comparison of five professional industries (2014); fits large on Greenwood, Deephouse, and Li (2007), a quantitative study of large consulting firms and the only one to separate partnerships from private corporations; that view carries the small and medium levels over from the first. The 1990 authors defined the P2 form only for large partnerships, so the small level rests on ownership.
  • Age. Our judgment: fits at every age, on the premise that firms are often founded as partnerships and old ones keep the form, adding managerial layers. No work tests it against age (premise: Cooper and colleagues 1996; Pinnington and Morris 2003).
  • Environmental uncertainty. Our judgment: fits stable and shifting, partial unpredictable, on the premise that consensus among owners costs time when change is sharp. Empson's (2019) one case cuts the other way: in an internal crisis, a hidden hierarchy let the partners act decisively.
  • Environmental complexity. Theory: strain simple, partial moderate, fits complex, extending without a new test Mintzberg's (1980) synthesis, which places the professional bureaucracy in complex, stable environments. Doty, Glick, and Huber (1993), a quantitative test across a sample of organizations, found resemblance to his ideal types did not predict effectiveness; Ketchen and colleagues (1997), a meta-analysis of 40 tests, found configurations partly explain performance, though it pooled many strategy types and the tests of pure structural types are mixed. Krabberød (2015) argues that the test has not been shown to be exhaustive.
  • Munificence and hostility. Our judgment: partial throughout, since Empson's (2019) crisis case, inside one firm, is not a hostile environment.
  • Diversity. Our judgment: fits single, partial related, strain unrelated, on our premise that partners judge one another's work, hardest across unrelated practices; Empson (2017) supports only their leading as autonomous peers.
  • Strategy. Our judgment, contested. Burton and Obel (2004), the most developed scholarly fit model, give a defender high formalization and centralization, the opposite of this form's formalization and, on its decentralized view, its centralization: strain; analyzer partial. They exclude the professional bureaucracy for a prospector, but on our reading partners are owners who can open new practices, so whether the rule reaches the partnership is unsettled: partial. On Mintzberg (1980) and that reading, it is partial throughout.
  • Technology. Our judgment: partial routine, fits mixed, partial nonroutine: trained skill on varied cases (Mintzberg 1980; Van de Ven, Ganco, and Hinings 2013). A limit: Hickson, Pugh, and Pheysey (1969), a multi-organization comparative survey, found operations technology bears only on the structure the workflow touches, more pervasively the smaller the organization; Mohr (1971), a quantitative field study of technology and structure, found no support for effectiveness depending on technology and structure fitting, though later studies of job unpredictability found positive evidence (Donaldson 2001).
  • Interdependence. Our judgment: fits pooled, partial sequential, strain reciprocal (Thompson 1967), on the premise that partners serving their own clients suit pooled work and cross-practice engagements strain collegial control.
  • Knowledge intensity. Theory, contested. On Greenwood and Empson's (2003) incentive argument, von Nordenflycht's (2010) definition, and Greenwood and colleagues' (2007) finding: strain low, partial moderate, fits high. On von Nordenflycht's 2007 and 2014 studies and Cooper and colleagues' two law firms: strain, partial, partial. None varies professionalization, so the middle level is our reading, and von Nordenflycht himself warns against conflating professionalization with knowledge intensity, as this factor does. Read through the institutional school, persistence held by norms is legitimacy, not fit.
  • Global integration pressure. Our judgment: partial throughout; Greenwood and colleagues (2010) describe multi-axis accounting firms but compare no levels.
  • Local responsiveness pressure. Our judgment: partial throughout. Muzio and Faulconbridge (2013), one historical case study, found local institutions constraining the one-firm model English law firms took to Italy.

What it does well

The producers own the firm. Greenwood and Empson (2003) argue that the partnership minimizes agency costs of both private and public corporations and gives knowledge workers superior incentives, within limiting conditions where the private corporation is preferred. Greenwood and colleagues (2007) attribute the lead of partnerships and private corporations over public ones, among large consultancies, to closer monitoring by owners and to professionals seeking ownership stakes. Von Nordenflycht qualifies both: public ownership hurt only small agencies (2007), and norms, not performance, keep public corporations out (2014).

The 1990 authors surmise, without measuring performance, that it guards quality, favoring professional standards over growth and financial results.

It gives professionals room: Hall (1968), a study of professionals across several occupations, found professionalization and bureaucratization generally inversely related; the link is theory.

What it costs

Direction is weak and negotiated, and reward only loosely tied to behavior (Greenwood, Hinings, and Brown 1990).

Leadership must be won repeatedly. Empson (2017), a synthesis from interviews with over 500 senior professionals in sixteen countries, describes authority that is contingent and renegotiated among autonomous peers. Empson and Alvehus (2019), an interview study across three professional sectors, found peers granting leadership identities without leadership authority, an unstable equilibrium.

Ownership is closed. Where professional norms do not bind, von Nordenflycht (2014) found public corporations appearing in step with the value of capital and firm size.

The tournament must also be fed: Galanter and Palay (1991) explain big law firms' growth as a by-product of promotion to partner.

How it fails

How the professional partnership (P2 form) fails, and the coordination failures behind it

The entry's failure modes at the left, each tied to the Coordination Failures patterns it names at the right; a pattern links its entry there.

Veto deadlockSiloed knowledgeDiffused responsibilityJurisdictional gap or overlap
Veto deadlockSiloed knowledgeDiffused responsibilityJurisdictional gap or overlap

How many ties the failure has. Highest: Direction stalls while the owners negotiateWork that spans practices falls between partnersA management layer sits on the partnership without replacing itVeto deadlockSiloed knowledgeDiffused responsibilityJurisdictional gap or overlap

Select a failure to read its place in the network.Direction stalls while the owners negotiate. Degree 1Work that spans practices falls between partners. Degree 2A management layer sits on the partnership without replacing it. Degree 1Veto deadlock. Degree 1Siloed knowledge. Degree 1Diffused responsibility. Degree 1Jurisdictional gap or overlap. Degree 1
FailureDegree
Direction stalls while the owners negotiate1
Work that spans practices falls between partners2
A management layer sits on the partnership without replacing it1
Veto deadlock1
Siloed knowledge1
Diffused responsibility1
Jurisdictional gap or overlap1

Three failure modes name four patterns, and no pattern is named by more than one.

Source: Greenwood and colleagues 1990, an interview and survey study of four accounting firms; Empson 2017; Empson 2019, one case study; Thompson 1967; Greenwood and colleagues 2010; Cooper and colleagues 1996, two case studies by scholars; Pinnington and Morris 2003, a survey of 197 law firms; Kirkpatrick and Ackroyd 2003.

Direction stalls while the owners negotiate. Where strategy waits on owners' consensus, the firm can stall, close to veto deadlock (our judgment, on Greenwood, Hinings, and Brown's 1990 negotiated strategy and Empson's 2017 contingent authority). Empson's (2019) one case is counter-evidence.

Work that spans practices falls between partners. An engagement needing several practices to adjust mutually has no owner of the whole, close to siloed knowledge and diffused responsibility (Thompson 1967; our judgment). Greenwood and colleagues (2010) describe the large accounting firms' answer: a client management system assigning responsibility to partners.

A management layer settles on the partnership without replacing it. Cooper and colleagues (1996), two case studies by scholars, found a managed archetype layered on the partnership in Canadian law firms, leaving competing commitments, close to authority owned twice (our judgment). Pinnington and Morris (2003), a survey of 197 law firms, contest it: the governance core was not transformed. Kirkpatrick and Ackroyd (2003), a conceptual critique, question archetype theory.

Burton and Obel's (2004) propositions supply the misfit rules, tested only as a set, for the earlier 1998 model (Burton, Lauridsen, and Obel 2002, a quantitative study of 224 Danish small and medium-sized firms). One fires undisputed: authority spread wide, for the analyzer that does not innovate. The three rules on authority spread wide meet only the profile's decentralized view, not its mixed one, so this one flags the form without sinking it.

Seven fire disputed, and flag. Four set few written standards or authority spread wide against a defender, a large organization, or a stable environment: Mintzberg (1980) places the professional bureaucracy, little formalized and decentralized, with large operating units, in complex but stable environments; on the stable environment another Burton and Obel rule points the other way at high equivocality and low complexity. Few written standards for an analyzer: the 2004 book allows the analyzer that innovates a simple configuration when small. Routine work without written standards: disputed by organizational choice, more than one way of organizing the same technology (Trist and colleagues 1963, several field studies in one industry), and by self-regulating groups (Pasmore and colleagues 1982, a review of 134 reported experiments; Beekun 1989, a meta-analysis of 17 studies), though Kelly (1978), a critical reanalysis of several published case studies, found their autonomy limited and the role of pay incentives seriously underestimated, as Beekun's pay finding supports; by the Aston reappraisal (Hickson, Pugh, and Pheysey 1969): the technological imperative generally not supported; and by Child and Mansfield (1972), a multi-firm comparative study: size related to structure far more than technology. The reactor rule for a defender, a judgment on Miles and Snow (1978), is disputed by Burton, Obel, and Håkonsson (2015): in a calm environment a reactor strategy and non-specific goals fit well together, though such firms often die if they keep it too long. Snow and Hrebiniak (1980), a study of top managers' perceptions in four industries, found other types outperforming reactors in competitive industries but not in a regulated one, on data they call only suggestive; their reactors are perceived types, not this pairing, and reading a regulated industry as calm is ours.

What the research found

The founding study, Greenwood, Hinings, and Brown (1990), is an interview and survey study of four accounting firms chosen for recent major change: exploratory, one industry in one country, with no measure of performance.

The ownership studies disagree. Greenwood and colleagues (2007), a quantitative study of many consulting firms, found partnerships and private corporations ahead of public ones among large consultancies. Von Nordenflycht (2007), a panel study of many advertising agencies, found the public-ownership penalty only among small agencies; his historical comparison of five professional industries, 1960 to 2003 (2014), found norms, not performance, the first-order reason public corporations are absent. Pickering (2015), two case studies by a scholar, suggests failed governance experiments in publicly owned firms may contribute to conflicting earlier findings, naming none of these studies.

The change studies split: Cooper and colleagues (1996) found sedimentation; Pinnington and Morris (2003) contested both it and transformation.

Empson and Alvehus (2019), an interview study across three professional sectors, found leadership co-constructed among peers; Empson (2019), one case study, found the hidden hierarchy.

Roulet, Paolella, Gabbioneta, and Muzio (2019) is the most recent, a panel of 100 law firms over 17 years: more women among ranked partners went with adopting non-equity partnership; compensation disparity, expected to drive the change, did not. Read in a business school account, not the chapter.

The evidence ledger holds 14 studies filed under this form.

In practice: one published case

Greenwood, Hinings, and Brown (1994), "Merging professional service firms," is one case study: a four-year study of a merger between two large accounting firms organized as professional partnerships, in a literature the authors say holds few case studies of the merger process. The source's abstract does not name the firms. The prevailing theory, it says, is that merging firms weigh strategic fit and neglect organizational fit, so dysfunctional behavior follows; accounting firms, organized as partnerships, are likely to weigh organizational fit, which makes the case a "tough" test of that theory.

Before the merger, the two firms gave careful attention to both strategic fit and organizational fit, which the authors note runs contrary to the general theory of mergers.

Even so, behavioral problems followed the formal merger. The specific difficulties reported in earlier merger studies were less salient; the problems that did arise were of a kind peculiar to this type of organization.

The source's conclusion is that theories of mergers should be sensitive to the context and setting of merger activity. The authors elaborate elements of a more systematic model of the merger process: the difference between mergers and acquisitions, the structure of governance, organizational capacity, sector cohesiveness, and technology.

Source: Greenwood and colleagues 1994. Merging professional service firms, Organization Science 5(2), 239 to 257; one case study.

Variants and near relatives

Managed professional business (Cooper, Hinings, Greenwood, and Brown 1996). The emerging archetype in two Canadian law firms, layered on the partnership without replacing it and not yet secure; the name is later work's. Unlike the professional bureaucracy's clinical directorate, which makes physicians managers inside hospitals, it is a second archetype laid over the whole firm's owner governance.

One-firm firm (Maister 1985, a practitioner article). A management approach shared by firms such as Goldman Sachs, McKinsey, and Latham and Watkins, marked by a remarkable degree of institutional loyalty and group effort.

Promotion-to-partner tournament (Galanter and Palay 1991). Big law firms' growth through an up-or-out contest among associates for partnership.

Collegial organization (Lazega 2001). A network and ethnographic study of a US corporate law partnership: bounded solidarity, lateral control, and oligarchic regulation help a flat organization govern itself. Its peers are owners, unlike the employed professors of the professional bureaucracy's department organization.

Multiplex form (Greenwood, Morris, Fairclough, and Boussebaa 2010), the transnational professional service firm. Large accounting firms differentiate on services, clients, and markets at once, with practice groups criss-crossing them, a client management system, and a culture of reciprocity. Its foil is the two-dimensional matrix, whose earlier failure the authors blame on high differentiation overpowering coordination, their claim here, not a test. The transnational form's multidimensional and reconfigurable organization also runs on several dimensions, each with its own accountable manager; here the owners hold client responsibility and coordinate by reciprocity.

The professional bureaucracy is the nearest neighbor. Both coordinate trained professionals by standardized skills. In the 1990 text, ownership, management, and operations are fused in each partner, and the apex is a partnership body that elects an executive policy committee.

Hansmann (1996) counts professional partnerships among employee-owned firms, a kind of producer cooperative; on our reading the Cooperative organization differs in that the members' elected council appoints and oversees management, where partners manage the firm themselves.

The professional partnership beside its nearest neighbor, the professional bureaucracy

Select a number to fill what it marks in both drawings; the list under them gives the dimensions on which the two profiles differ.

The professionals own the firm, so ownership, management, and operations are fused in each partner, and the apex is a body of all the partners that elects an executive policy committee.

Professional partnership (P2 form)

ElectsThepartnershipPractices andofficesAssociatesAll thepartnersExecutive policycommitteePractice areaOfficeAssociatesBy practiceBy officeMS1112234
ElectsThe partnershipPractices and officesAssociatesPartnersLeadersPracticeOfficeAssociateBy practiceBy officeMS1112234

Reports toAdvises, or reports indirectlyMMutual adjustmentSStandardization of skills

Professional bureaucracy

Apex andsupport staffMiddle line(Moderate endonly)Operating coreStrategicapexSupport staffAdministrationSpecialtydepartmentCardiacdepartmentBy expertiseBy client typeSS1222334
Apex and support staffMiddle line (Moderate end only)Operating coreApexSupportAdminSpecialtyCardiacBy expertiseBy client typeSS1222334

Reports toSStandardization of skillsLayers contested: Blau (1968) found narrower first-line spans and more levels in agencies needing higher qualifications.

  1. The partnership's apex is a body of all the partners, who own the firm, do its work, and elect an executive policy committee; in the professional bureaucracy the professionals are employees under the apex.
  2. The partnership is flat, partners leading its practice areas and offices directly; the professional bureaucracy is flat to moderate, its departments under a narrow administration at the moderate end; both our judgment.
  3. Mutual adjustment among the peers who lead the partnership joins standardized skills, our judgment; the professional bureaucracy's prime mechanism is skills alone, its committees adjusting in the administration.
  4. The partnership's second basis of grouping is place, its offices beside its practice areas, our judgment; the professional bureaucracy's is the client type each specialty serves.

Differs on 3 of 11 dimensions

  • Layers and span of control Flat; Professional bureaucracy: Flat to moderate
  • Prime coordinating mechanism Mutual adjustment and standardization of skills; Professional bureaucracy: Standardization of skills
  • Mode of exchange and control Clan; Professional bureaucracy: Bureaucracy and clan

Both forms coordinate trained professionals by standardized skills and group them on two bases at once. In the partnership the professionals own the firm and govern it together, and in the professional bureaucracy they are employees of an organization owned by others.

Source: Greenwood and colleagues 1990, an interview and survey study of four accounting firms; Empson 2017; Empson 2019, one case study; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test.

Moving into or out of it

Moving in assumes a professionalized workforce, on which the fused roles rest (theory).

Toward management. Cooper and colleagues (1996) found a managed archetype layered on; Pinnington and Morris (2003) found change concentrated in market-facing areas.

Toward public ownership. Pickering (2015), two case studies of Australian publicly quoted accounting companies, found one mimicking partnership governance and the other removing every vestige of it; moving from the partnership scheme contributed to one company's ultimate failure.

Toward two tiers. Roulet and colleagues (2019) found the single equity tier kept where profit per partner, lawyer reputation, and leverage were high.

In population ecology Hannan and Freeman (1984) argue that selection favors inert structures, that inertia rises with age, and that reorganization attempts raise death rates; Amburgey, Kelly, and Barnett (1993), a quantitative study of organizational change and failure rates, found the effects of change on failure vary by type of change and over time. Donaldson (1995) argues ecology understates managers' capacity to adapt structure; Astley and Van de Ven (1983) set its determinism against strategic choice, and Lewin and Volberda (1999) reframe that standoff as coevolution.

Change & Transformation deals with running the reorganization.

The thinking behind it

Royston Greenwood, with Hinings and Brown (1990), Empson (2003), and colleagues (2010): the P2 form, the efficiency argument, and the multiplex form.

C. R. Hinings, with Cooper, Greenwood, and Brown (1996): sedimentation.

Laura Empson (2017, 2019): contingent authority, collective leadership, and the hidden hierarchy.

Andrew von Nordenflycht (2010, 2014): the class the form belongs to, and norms keeping public corporations out.

Ashly Pinnington and Timothy Morris (2003): managerial change without archetype change.

David H. Maister (1985), practitioner: the one-firm firm. Marc Galanter, with Thomas Palay (1991): the tournament. Emmanuel Lazega (2001): lateral control in a flat, self-governing firm. Daniel Muzio (2013, 2019): the one-firm model abroad, and the non-equity tier.

Henry Mintzberg (1980): the professional core. William Ouchi (1980), conceptual: clan control. James D. Thompson (1967): interdependence. Richard Burton and Børge Obel (2004): misfit rules. Michael T. Hannan and John Freeman (1984): structural inertia.

Also called

P2 form, the 1990 authors' name. Professional partnership, and loosely, partnership. Professional service firm names a wider class (von Nordenflycht 2010). Greenwood, Hinings, and Prakash (2017), arguing the 1990 paper missed the partnership's social purpose, propose a P3 model centered on it.

Works cited

On this page, “read” means read by this series: where a line says a work, or part of one, was not read, the series did not read it.

Back to the explorer