Jawn Lam

Project-based organization

Organizational StructuresProfessional, project, and knowledge forms13 min read

The project, not the function or division, is the main unit for production, innovation, and competition, and people move from project to project.

What it is

A project-based organization makes the project, not the function or the division, its main unit for production, innovation, and competition. Each project, often for a client, gathers the specialists it needs and disbands when done, and people move from project to project. Inside a project, people coordinate by mutual adjustment; across projects, by project management standards.

The project-based organization is a portfolio of projects on thin resource pools

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

Reports toAdjust to each other directlyMMutual adjustment

The firmProjects andpoolsSpecialistsFirm, choosingprojectsProject for aclientProjectThin resourcepoolSpecialistSpecialistBy projectM
The firmProjects and poolsSpecialistsFirmForclientProjectPoolSpecialistSpecialistBy projectM
Select a unit or a letter to read it. M, mutual adjustment: People coordinate their own work by informal communication with each other.Firm, choosing projects. Layer: The firm. Reports to no one. Decides which projects to take on, while project managers run them, our judgment on Hobday (2000); project management standards hold across projects.Project for a client. Layer: Projects and pools. Reports to Firm, choosing projects. By project. Run by its project manager, it gathers the specialists it needs and disbands when done; projects are contracted with clients.Project. Layer: Projects and pools. Reports to Firm, choosing projects. By project. The project is the firm's main unit of innovation and competition as well as production (Hobday 2000).Thin resource pool. Layer: Projects and pools. Reports to Firm, choosing projects. A thin functional or resource pool behind the projects; the form is weak at coordinating resources and learning across projects (Hobday 2000).Specialist. Layer: Specialists. Reports to Project for a client. Brings one kind of specialized knowledge or skill that the project integrates (Hobday 2000; Sydow, Lindkvist, and DeFillippi 2004).Specialist. Layer: Specialists. Reports to Project for a client. Moves on to another project when this one disbands, often across firms; our judgment, from Sydow, Lindkvist, and DeFillippi (2004) and Starkey, Barnatt, and Tempest (2000).M, mutual adjustment. People coordinate their own work by informal communication with each other.
The structure in words
  1. The firm
    • Firm, choosing projects, reports to no one. Decides which projects to take on, while project managers run them, our judgment on Hobday (2000); project management standards hold across projects.
  2. Projects and pools
    • Project for a client, reports to Firm, choosing projects, grouped by project. Run by its project manager, it gathers the specialists it needs and disbands when done; projects are contracted with clients.
    • Project, reports to Firm, choosing projects, grouped by project. The project is the firm's main unit of innovation and competition as well as production (Hobday 2000).
    • Thin resource pool, reports to Firm, choosing projects. A thin functional or resource pool behind the projects; the form is weak at coordinating resources and learning across projects (Hobday 2000).
  3. Specialists
    • Specialist, reports to Project for a client. Brings one kind of specialized knowledge or skill that the project integrates (Hobday 2000; Sydow, Lindkvist, and DeFillippi 2004).
    • Specialist, reports to Project for a client. Moves on to another project when this one disbands, often across firms; our judgment, from Sydow, Lindkvist, and DeFillippi (2004) and Starkey, Barnatt, and Tempest (2000).
  • Specialist and Specialist: adjust to each other directly, coordinated by mutual adjustment.

The project, often for a client, is the unit of production, and each gathers the specialists it needs and disbands when done. People inside a project coordinate by mutual adjustment, while the firm decides which projects to take on.

Source: Hobday 2000, one case study with a conceptual model; Sydow and colleagues 2004; Starkey and colleagues 2000.

Its profile rests on Hobday (2000) and Sydow, Lindkvist, and DeFillippi (2004); two levels are theory, the rest our judgment:

  • Grouping: spans product or purpose and client or market segment (theory): the project, often for a client, is the unit.
  • Specialization: high: projects integrate different kinds of specialized knowledge.
  • Formalization: medium: project management standards hold across projects.
  • Centralization: mixed: project managers run their projects while the firm decides which projects to take on.
  • Layers and span: flat: projects sit directly under thin pools.
  • Decision rights: spans limited vertical decentralization and selective vertical and horizontal decentralization: project managers hold delegated power over bounded projects, and teams decide their own work (Mintzberg's 1980 Types C and D).
  • Coordinating mechanism: mutual adjustment (theory).
  • Lateral mechanisms: spans hierarchy, rules, and goals only, and direct contact and liaison roles: the form is weak at coordinating across projects.
  • Differentiation against integration: moderate differentiation, some integrating roles: specialists from different fields are joined inside each project.
  • Mode of exchange: spans market and bureaucracy: projects are contracted with clients, and in latent organizations brokers draw the same people together for recurring projects (Starkey, Barnatt, and Tempest 2000).
  • Boundary permeability: spans selective and permeable: people move between projects and often between firms.

Where the project-based organization 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: Product or purpose and client or market segment. Basis: Theory. The project, often for a client, is the main unit of production, innovation, and competition, with thin functional pools behind it. Sources: Hobday 2000; Sydow and colleagues 2004.Specialization: High. Basis: Judgment. Projects integrate different kinds of specialized knowledge and skill; judgment for the band. Sources: Hobday 2000; Sydow and colleagues 2004.Standardization and formalization: Medium. Basis: Judgment. Project management standards hold across projects, and film crews worked through structured role systems negotiated on set; judgment for the band. Sources: Bechky 2006; Hobday 2000.Centralization: Mixed. Basis: Judgment. Project managers run their projects while the firm decides which projects to take on; judgment. Sources: Hobday 2000.Layers and span of control: Flat. Basis: Judgment. Projects sit directly under thin functional or resource pools; judgment for the band. Sources: Hobday 2000.Decision rights and the locus of authority: Limited vertical decentralization to selective vertical and horizontal decentralization. Basis: Judgment. Project managers hold delegated power over bounded projects, as in Type C with projects as the units, and project teams hold decisions on their work, as in Type D; judgment. Sources: Hobday 2000; Mintzberg 1980.Prime coordinating mechanism: Mutual adjustment. Basis: Theory. Mutual adjustment within projects, with project management standards across them. Sources: Hobday 2000; Sydow and colleagues 2004.Lateral mechanisms: Hierarchy, rules, and goals only to direct contact and liaison roles. Basis: Judgment. The form is weak where the functional matrix is strong, at coordinating resources and learning across projects, which suggests few designed links across projects; the remedies named, functional coordinators and corporate tracking of projects, would add an integrating role; the band is judgment. Sources: Hobday 2000.Differentiation against integration: Moderate differentiation, some integrating roles. Basis: Judgment. Specialists from different fields are joined inside each project; judgment. Sources: Hobday 2000; Lawrence and Lorsch 1967a.Mode of exchange and control: Market and bureaucracy. Basis: Judgment. Projects are contracted with clients, and in latent organizations network brokers repeatedly draw the same people together for recurring projects; judgment. Sources: Starkey and colleagues 2000; Sydow and colleagues 2004.Boundary permeability: Selective to permeable. Basis: Judgment. Project-based organizations are embedded in networks, and people move from project to project and often across firms; judgment for the band. Sources: Sydow and colleagues 2004; Starkey and colleagues 2000.

Two of the eleven levels rest on theory, none on evidence, and nine on judgment. No row is contested.

Source: Hobday 2000, one case study with a conceptual model; Sydow and colleagues 2004; Bechky 2006, an ethnography of one kind of temporary organization; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test; Lawrence and Lorsch 1967a, a multi-firm comparative field study; Starkey and colleagues 2000.

Where it came from

Galbraith (1971) treated the project and functional forms as the two extremes of a design choice, and set out the matrix designs between them. DeFillippi and Arthur (1998) wrote of project-based enterprise in film making. The project-based firm was set out between 2000 and 2006. Mike Hobday (2000) studied firms making complex products and systems and asked whether the project-based organization is an ideal form for managing them. Jörg Sydow, Lars Lindkvist, and Robert DeFillippi (2004) called project-based organizations an emerging form for integrating diverse, specialized expertise. Richard Whitley (2006) asked whether project-based firms are a new organizational form or variations on a theme, and answered with ideal types.

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 yearProject-based organization, 2000 to 2006Now

The forms by first year

1900192019401960198020002020Project-based organization, 2000 to 2006Now

Schools that treat this form: Modularity and the mirroring hypothesis; Information processing.

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.

Its sector of origin is engineering, construction, and complex capital goods, and the problem it answered was how to organize a firm whose output is a stream of one-off, complex projects for outside clients.

The practice is older: Stinchcombe (1959) explained construction's lack of bureaucracy by economic instability.

Where it fits

One cell rests on evidence: technology, on Hobday's (2000) one case study comparing this form with a matrix organization. Hobday concludes that the nature, composition, and scale of the product bear importantly on the appropriate form, and most other cells take his case as a premise. Cells are our judgment unless marked theory or evidence.

The project-based organization 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. Projects as the main unit suit firms up to the size where scale economies, coordination across many projects, and firm-wide learning matter, which is where the project-based form is weakest. Basis: Judgment. Sources: Hobday 2000; Söderlund and Tell 2011. View 1: Small fits, Medium fits, Large partial. The project-based form is weak where scale economies, coordination across many projects, and firm-wide learning matter, which grow with size. Sources: Hobday 2000. View 2: Small fits, Medium fits, Large fits. Asea and ABB ran a project-based form as a large corporation for more than fifty years. Sources: Söderlund and Tell 2011.Age. Firms built on streams of projects have kept the form for decades, so age does not decide it. Basis: Judgment. Sources: Söderlund and Tell 2011; Bechky 2006.Environmental uncertainty (unpredictability, dynamism). Projects cope well with risk and shifting client demands; with stable, repeat work the matrix organization's routines and scale do better. Basis: Judgment. Sources: Hobday 2000; Söderlund and Tell 2011; Galbraith 1973; Pennings 1975.Environmental complexity. Projects integrate the many kinds of knowledge that complex products and systems for clients demand; nothing read compares environments of different complexity. Basis: Theory. Grade: conceptual only, no empirical test. Sources: Hobday 2000; Söderlund and Tell 2011; Pennings 1975.Munificence and hostility. Projects are won and staffed one at a time, so the form can shrink with the work; nothing read ties it to munificence. Basis: Judgment. Sources: Hobday 2000.Diversity of products and markets. Project firms do well in one line of complex work; they are weak at coordinating resources and learning across projects, which a diverse portfolio demands. Basis: Judgment. Sources: Hobday 2000.Strategy type. The project-based form is strong at innovation and meeting clients' needs but weak at economies of scale and routine tasks, which a defender competing on efficiency relies on. Basis: Judgment. Sources: Hobday 2000; Burton and Obel 2004.Technology and routineness. The project-based form integrates different kinds of knowledge and copes with project risk and uncertainty, and it is weak at routine tasks and economies of scale. Basis: Evidence. Grade: a single case or a practitioner's report. Sources: Hobday 2000; Perrow 1967; Hickson and colleagues 1969; Mohr 1971.Interdependence. Drawing people from specialist pools into a project team groups reciprocal work in one unit, as a general contractor does; work in which projects only share resources plays to the form's recorded weakness, coordinating resources across projects. Basis: Theory. Grade: conceptual only, no empirical test. Sources: Thompson 1967; Hobday 2000.Knowledge intensity and professionalization. Project firms are strong at integrating many kinds of knowledge and skill on one-off work for clients; with work learned on the job, a project frame adds little that a functional structure lacks. Basis: Theory. Grade: conceptual only, no empirical test. Sources: Hobday 2000; Mintzberg 1980.Global integration pressure. Project firms work across borders for clients, but no work read ties the form to integration pressure across countries. Basis: Judgment. Sources: Hobday 2000.Local responsiveness pressure. Projects are tailored to each client anyway, but no work read sets the project-based form against responsiveness to countries. Basis: Judgment. Sources: Hobday 2000.

With the one contested cell counted by its first view, the 36 settings show Fits at 15, Partial at 17, and Strain at 4. Judgment is the basis of eight of the twelve cells.

Source: Hobday 2000, one case study with a conceptual model; Söderlund and Tell 2011, one case study; Bechky 2006, an ethnography of one kind of temporary organization; Galbraith 1973; Pennings 1975, a quantitative field test of the structural-contingency model; Burton and Obel 2004; Perrow 1967; Hickson and colleagues 1969, a multi-organization comparative survey; Mohr 1971, a quantitative field study of technology and structure; Thompson 1967; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test.

Your own situation against the project-based organization

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

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None of the 39 contingency misfit rules can fire for this form: its profile meets no rule's conditions, and no rule names it. The counts and the ranking still change as you set the factors.

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

  • Size. Contested. Our reading of Hobday: fits small and medium, partial large, since the form is weak where scale economies, coordination across many projects, and firm-wide learning matter (he names those weaknesses, not size). Söderlund and Tell (2011), one case study, show Asea and ABB running the form as a large corporation for over fifty years: fits large.
  • Age. Fits at every age. Nothing tests it; Asea and ABB kept the form from 1945 to 2000.
  • Environmental uncertainty. Partial stable, fits shifting and unpredictable. Hobday finds the form copes with project risk and uncertainty, which is uncertainty in the task, not the environment; the partial at stable is inferred from the matrix's strength at routine tasks and scale. Söderlund and Tell's (2011) project epochs and Galbraith (1973) are the other premises.
  • Environmental complexity. Theory: partial simple and moderate, fits complex, since projects integrate the many kinds of knowledge complex products demand (Hobday 2000; Söderlund and Tell 2011); partial, not strain, at simple is our judgment. Nothing read compares environments. A limit on the uncertainty and complexity cells: Pennings (1975), a quantitative field test of the structural-contingency model, found the fit between environmental and structural variables did not explain effectiveness.
  • Munificence and hostility. Partial throughout; nothing read ties the form to it.
  • Diversity. Fits a single business, partial related, strain unrelated, premised on the form's weakness at coordinating resources and learning across projects.
  • Strategy. Strain defender, partial analyzer, fits prospector: Hobday's findings on innovation and scale, placed on the strategy types as Burton and Obel's (2004) model, the most developed scholarly fit model, places innovation and efficiency. Their structural rule differs: it asks low formalization and centralization of a prospector, and this form's profile sits nearer their analyzer with innovation.
  • Technology. Evidence, one case study (Hobday 2000): strain routine, fits mixed and nonroutine; mapping the case onto Perrow's (1967) levels is our judgment. A limit on this cell: Hickson, Pugh, and Pheysey (1969), a multi-organization comparative survey, found the technological imperative generally unsupported, and Mohr (1971), a quantitative field study of technology and structure, found effectiveness not hinging on a match of technology and structure. Donaldson (2001) ascribes Mohr's and Pennings's failures to method.
  • Interdependence. Theory: strain pooled, partial sequential, fits reciprocal. Thompson (1967) groups reciprocal work into one unit; projects that only share resources meet Hobday's recorded weakness at coordinating them.
  • Knowledge intensity. Theory: partial low, fits moderate and high. Hobday finds the form strong at integrating knowledge, and Mintzberg (1980), a synthesis offering propositions without a new test, places client project firms in his operating adhocracy; a limit: Doty, Glick, and Huber (1993), a quantitative test across a sample of organizations, did not support his claim that organizations resembling his types are more effective. Ketchen and colleagues' (1997) meta-analysis of 40 tests found configurations partly explain performance, but many configurations it pooled are strategy types, and tests of pure structural types are mixed; Krabberød (2015) argues Doty's test is not shown to be exhaustive.
  • Global integration and local responsiveness. Partial throughout; no work read ties the form to either.

What it does well

Hobday (2000), one case study with a conceptual model, calls the form intrinsically innovative, recreating structures around each project and major customer, and strong at meeting clients' needs, integrating knowledge and skill, and coping with project risk and uncertainty.

Two symptoms name it as relief, a rulebook that cannot keep up and reorganizations every year or two. The first tie is theory: Burns and Stalker (1961), a field study of twenty firms, pair organic management with changing conditions, and Mintzberg (1980), a synthesis offering propositions without a new test, places the adhocracy in complex, dynamic environments; neither names this form. Adler, Goldoftas, and Levine (1999) and Bigley and Roberts (2001), one case study each, dispute it, finding bureaucracies meeting exceptions without dropping their rules. The second is our judgment that its units are temporary by design.

What it costs

Hobday (2000) states the price: the form is weak where the matrix organization is strong, at routine tasks, economies of scale, coordinating resources across projects, company-wide technical development, and organization-wide learning, and it can work against the wider interests of corporate strategy and business coordination.

Thompson (1967) ranks standardization, plan, and mutual adjustment in rising cost, and projects run mostly on the last, the dearest kind (theory).

How it fails

Our judgment places each mode under the Coordination Failures pattern named in parentheses.

How the project-based organization 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.

Siloed knowledgeLesson non-transmissionLocal optimization against the global constraintTacit-knowledge evaporationDropped commitmentJurisdictional gap or overlap
Siloed knowledgeLesson non-transmissionLocal optimization against the global constraintTacit-knowledge evaporationDropped commitmentJurisdictional gap or overlap

How many ties the failure has. Highest: Each project learns alone, and the firm does notResources are poorly coordinated across projectsProject interests work against the firm's strategyExpertise scatters as the firm is rebuilt around each projectTemporary and permanent parts pull apartSiloed knowledgeLesson non-transmissionLocal optimization against the global constraintTacit-knowledge evaporationDropped commitmentJurisdictional gap or overlap

Select a failure to read its place in the network.Each project learns alone, and the firm does not. Degree 2Resources are poorly coordinated across projects. Degree 1Project interests work against the firm's strategy. Degree 1Expertise scatters as the firm is rebuilt around each project. Degree 1Temporary and permanent parts pull apart. Degree 2Siloed knowledge. Degree 1Lesson non-transmission. Degree 1Local optimization against the global constraint. Degree 2Tacit-knowledge evaporation. Degree 1Dropped commitment. Degree 1Jurisdictional gap or overlap. Degree 1
FailureDegree
Each project learns alone, and the firm does not2
Resources are poorly coordinated across projects1
Project interests work against the firm's strategy1
Expertise scatters as the firm is rebuilt around each project1
Temporary and permanent parts pull apart2
Siloed knowledge1
Lesson non-transmission1
Local optimization against the global constraint2
Tacit-knowledge evaporation1
Dropped commitment1
Jurisdictional gap or overlap1

Five failure modes name six patterns; Local optimization against the global constraint is named by two of the five.

Source: Hobday 2000, one case study with a conceptual model; Prencipe and Tell 2001, six case studies by scholars; Prado and Sapsed 2016, one case study; Whitley 2007; Godenhjelm and colleagues 2015, a conceptual review with document analysis; Stjerne and Svejenova 2016, one case study.

Each project learns alone, and the firm does not (siloed knowledge; lesson non-transmission). Hobday (2000) records weak organization-wide learning and company-wide technical development. Prencipe and Tell (2001), six case studies by scholars, found firms building mechanisms for learning across projects. Prado and Sapsed (2016), one case study, found a remedy working at Petrobras: project innovations adopted across the organization through subject experts and a central database.

Resources are poorly coordinated across projects (local optimization against the global constraint). Hobday records this weakness.

Project interests work against the firm's strategy (local optimization against the global constraint). Hobday finds the form can work against the wider interests of corporate strategy and business coordination.

Expertise scatters as the firm is rebuilt around each project (tacit-knowledge evaporation). Whitley (2007) says this of precarious project-based firms, an ideal type, not a measured finding.

Temporary and permanent parts pull apart (dropped commitment; jurisdictional gap). Godenhjelm, Lundin, and Sjöblom (2015), a conceptual review with document analysis of projects inside public administration, argue that without mechanisms linking temporary and permanent structures, projects can lose their flexible and innovative qualities and fragment the permanent organization's coordination. Stjerne and Svejenova (2016), one case study of a film company, found boundary work and boundary roles addressing such tensions.

Its profile meets no profile rule's conditions, and no misfit rule names this form.

What the research found

The evidence on the form itself is case studies and small comparative studies; there is no meta-analysis of this form. Hobday (2000), Söderlund and Tell (2011), Lindkvist (2004), DeFillippi and Arthur (1998), and Prado and Sapsed (2016) are one case study each, Hobday's with a conceptual model; Prencipe and Tell (2001), six case studies by scholars; Grabher (2004), two comparative case studies by a scholar. Pemsel, Müller, and Söderlund (2016), a study of 20 project-based organizations, found six knowledge governance strategies; Turner and Miterev (2019), an interview study of 12 project-based organizations, found three design configurations. Two study temporary groups, not the firm: Bechky (2006), an ethnography of one kind of temporary organization, and Bechky and Okhuysen (2011), a comparative ethnography of two settings.

Two larger studies of project structures inside firms, not whole-organization forms, point different ways. Larson and Gobeli (1988), a comparison of 540 development projects, found balanced and project matrices comparing favorably with dedicated project teams, though common-source bias is possible; Patanakul, Chen, and Lynn (2012), a survey of several hundred projects, found autonomous teams best for technically novel or radical projects, heavyweight teams for incremental ones.

The record holds one replication and no replication failure. Its most recent study, Wald, Ingason, and Fridgeirsson (2025), a repeated survey of many organizations in three countries, repeated Schoper and colleagues' (2018) surveys of many organizations in three countries. Shares stayed high, 34.4 to 41.9 percent of work in 2022, but where Schoper found projectification rising and respondents expecting more, the replication found it plateauing. Both measure projectification, not this form; the most recent study of the form itself is Turner and Miterev (2019).

Bechky (2006) found temporary organizations organized around structured role systems, not ephemeral and unstable, and Stjerne and Svejenova (2016), one case study, challenge an overly bracketed view of temporary organizations. Prado and Sapsed set their database success against prior work that found database approaches failing. Whitley (2006) argues against those who see project-based firms as heralding a new logic of organizing.

Two schools list the form. Information processing ties task uncertainty to information load (Galbraith 1973), and Ocasio's (1997) attention-based view answers that structure governs where attention goes. Modularity and mirroring holds that an organization's structure tends to mirror the architecture of what it makes, and answers information processing that standardized interfaces embed coordination, so a modular product holds together a loosely coupled organization (Sanchez and Mahoney 1996; Colfer and Baldwin 2016, a review of 142 empirical studies that found mirroring prevalent but not universal). Among the exceptions, Brusoni, Prencipe, and Pavitt (2001), a study of one technology in one industry, found firms relying on several technologies keeping knowledge beyond what they make to coordinate loosely coupled suppliers. The dissent panel disputes fit itself: structure is chosen (Child 1972), forms spread by legitimacy (Meyer and Rowan 1977; DiMaggio and Powell 1983), selection sorts them (Hannan and Freeman 1977), or forms come in coherent bundles, so partial fits mislead (Miller 1986; Meyer, Tsui, and Hinings 1993); Donaldson (2001) replies.

The evidence ledger holds 19 studies filed under this form.

In practice: one published case

Söderlund and Tell (2011), a chapter in an Oxford University Press volume on knowledge integration and innovation, is one case study, a longitudinal analysis of market complexity, technological complexity, and organizational design in Asea/ABB.

What the organization did: by the authors' account, Asea/ABB operated as a P-form, or project-based, corporation in complex products and systems for more than fifty years, from 1945 to 2000.

What happened: over the period, its market and technological complexity rose across four project epochs, which the authors distinguish.

What the authors concluded: the project-based organizational form is a specific permanent configuration conducive to knowledge integration in complex products and systems industries, and complexity and organizational design influence how projects are generated and executed in such a corporation.

What the record does not say: it rests on the chapter's abstract, which does not name or date the epochs or report how the firm performed, so none of that is stated here. The authors' 2009 article on the corporation, whose title speaks of the P-form organization and of project epochs from 1950 to 2000, was not read.

Its grade: one case study, of one corporation, read only in the chapter's abstract, not its full text.

Source: Söderlund and Tell 2011. Knowledge integration in a P-form corporation: project epochs in the evolution of Asea/ABB, 1945-2000, In Christian Berggren, Anna Bergek, Lars Bengtsson, Michael Hobday, and Jonas Söderlund (eds.), Knowledge Integration and Innovation, Oxford University Press, Oxford, 2011, 170 to 202; one case study.

Variants and near relatives

Temporary organization (Lundin and Söderholm 1995): their theory of the single project as a temporary organization, defined by time, task, team, and transition; this form is the permanent firm that runs a stream of them, which Söderlund and Tell (2011) call a specific permanent configuration. Projectification is something else: Midler's (1995) name for the phase in which Renault adapted its permanent processes to strong projects, and in later surveys the share of work done as projects (Schoper and colleagues 2018).

Craft administration (Stinchcombe 1959): construction sites administered through the contracts between client, general contractor, and subcontractors, with craft workers' training standing in for centralized planning. It describes how an industry runs its sites across contracting firms; Whitley's craft firm, below, is one firm type. Wilson's (1989) craft organization, after Stinchcombe, is a type of agency task, not a form.

Latent organization (project networks) (Starkey, Barnatt, and Tempest 2000): groupings of individuals and teams that persist and are drawn together for recurring projects by network brokers, unlike the broker of the network entry's dynamic network, a lead firm assembling assets other companies own. The project is still the unit of production, but the team outlives each project and crosses firm boundaries. Whitley's hollow project-based firm, below, is its firm-level counterpart.

Organizational, craft, precarious, and hollow project-based firms (Whitley 2006, 2007), crossing the singularity of outputs with the separation and stability of roles: organizational firms: varied outputs, changeable roles; craft firms: incrementally related outputs, stable roles, loyalty to the craft; precarious firms: risky, unusual outputs, volatile expertise; hollow, or contractual, firms: single, unique outputs, separate, stable roles, and a focus on one or a few kinds of project.

Project-led organization (Davies and Hobday 2005; Dosi, Hobday, and Marengo 2003): a milder form in which the needs of projects outweigh functional influence on decisions and representation. It sits between the pure form and the matrix entry's project matrix, its functional presence answering Hobday's (2000) recorded weaknesses.

The project management office, prominent in many organizations (Hobbs and Aubry 2007), is a support unit, not a form.

The Adhocracy (innovative organization) is its nearest neighbor: it treats the whole organization as a shifting pool of experts whose teams form and dissolve around problems, with no stable line above them. This form makes the bounded project for a client its unit of production, so the firm is a portfolio of projects. The two meet in Mintzberg's (1980) operating adhocracy. Even there, this form keeps project management standards across projects, where the adhocracy relies on mutual adjustment.

The project-based organization beside its nearest neighbor, the adhocracy

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

It makes the bounded, time-limited project for a client the unit of production, so the firm is a portfolio of projects drawing on thin resource pools, not a whole organization run as a shifting pool of experts with no stable line above its teams.

Project-based organization

The firmProjects andpoolsSpecialistsFirm, choosingprojectsProject for aclientProjectThin resourcepoolSpecialistSpecialistBy projectM141123334
The firmProjects and poolsSpecialistsFirmForclientProjectPoolSpecialistSpecialistBy projectM141123334

Reports toAdjust to each other directlyMMutual adjustment

Adhocracy (innovative organization)

Strategic apexFunctions andteamsExpertsStrategicapexFunctionalunitProject teamProject teamExpert2By functionBy projectM1122334
Strategic apexFunctions and teamsExpertsApexFunctionProjectProjectExpert2By functionBy projectM1122334

Reports toAdvises, or reports indirectlyAdjust to each other directlyMMutual adjustment2Two superiors

  1. The project-based firm's projects answer to the firm, which decides which projects to take on, our judgment; no stable line runs above the adhocracy's teams.
  2. The bounded project, often for a client, is the unit of production, so client is a basis of grouping; in the adhocracy's permanent kind, teams form around problems and are not bounded projects for clients.
  3. The project-based specialist works in a project, with only thin functional pools behind the projects; the adhocracy's expert sits in a functional unit and a project team at once, two bosses in a matrix.
  4. Mutual adjustment runs inside each project, and project management standards hold across projects; in the adhocracy mutual adjustment runs within and between the teams.

Differs on 9 of 11 dimensions

  • Basis of grouping Product or purpose and client or market segment; Adhocracy (innovative organization): Two or more at once
  • Standardization and formalization Medium; Adhocracy (innovative organization): Low
  • Centralization Mixed; Adhocracy (innovative organization): Decentralized
  • Layers and span of control Flat; Adhocracy (innovative organization): Moderate
  • Decision rights and the locus of authority Limited vertical decentralization to selective vertical and horizontal decentralization; Adhocracy (innovative organization): Selective vertical and horizontal decentralization
  • Lateral mechanisms Hierarchy, rules, and goals only to direct contact and liaison roles; Adhocracy (innovative organization): Matrix
  • Differentiation against integration Moderate differentiation, some integrating roles; Adhocracy (innovative organization): High differentiation, heavy integration
  • Mode of exchange and control Market and bureaucracy; Adhocracy (innovative organization): Clan
  • Boundary permeability Selective to permeable; Adhocracy (innovative organization): Permeable

Both forms do their work in teams of specialists who coordinate by mutual adjustment. The project-based firm makes the bounded project, often for a client, its unit of production, while the adhocracy, in its permanent kind, runs the whole organization as a shifting pool of experts with no stable line above its teams.

Source: Hobday 2000, one case study with a conceptual model; Sydow and colleagues 2004; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test; Mintzberg 2024.

Moving into or out of it

Midler (1995), one longitudinal case study of Renault, traced four phases toward powerful Project Directors, around whom departments, careers, and supplier relations then adapted. Renault balanced project and departmental identities, not reducing departments to labor pools, so its model stayed matrix-type, short of this form. The one case of moving in on record is Lindkvist's (2004) R&D organization, one case study, made strongly project-based, where new rules of the game enabled market-like discovery lower down within a hierarchy.

Renault's four phases toward strong projects

Each box names a phase, then its years where Midler gives them and, after the colon, what changed; select a phase to read it. One longitudinal case study of one firm, mainly its product development function, with no comparison firm.

Select a phase to read it.Phase 1. In the 1960s Renault was organized in skill-based functional departments, with projects coordinated informally between them.Phase 2. From 1970 to 1988 projects had coordinators, of fairly low corporate status.Phase 3. A reform by the CEO in December 1988 gave Project Directors a powerful formal position, with a team of departmental project supervisors "with one foot in each hierarchy": a matrix-type model. Midler calls the change political, lying in the power given to the role rather than in a new structure or method.Phase 4. The permanent departments, careers, and supplier relations were adapted to the strong projects, the phase Midler named projectification. Renault chose to balance strong project and departmental identities rather than reduce the departments to labor pools for project managers, so its model stayed matrix-type, short of the project-based form.
  1. Phase 1. In the 1960s Renault was organized in skill-based functional departments, with projects coordinated informally between them.
  2. Phase 2. From 1970 to 1988 projects had coordinators, of fairly low corporate status.
  3. Phase 3. A reform by the CEO in December 1988 gave Project Directors a powerful formal position, with a team of departmental project supervisors "with one foot in each hierarchy": a matrix-type model. Midler calls the change political, lying in the power given to the role rather than in a new structure or method.
  4. Phase 4. The permanent departments, careers, and supplier relations were adapted to the strong projects, the phase Midler named projectification. Renault chose to balance strong project and departmental identities rather than reduce the departments to labor pools for project managers, so its model stayed matrix-type, short of the project-based form.

Renault moved from informal project coordination to powerful Project Directors in a matrix-type model, then adapted its departments, careers, and supplier relations to the strong projects, the phase Midler named projectification. It kept strong departments beside the strong projects, so the firm whose change gave projectification its name stayed matrix-type, short of the project-based form.

Source: Midler 1995, one longitudinal case study.

The weaknesses ask for a partial move back: Hobday's (2000) remedies, functional coordinators and corporate tracking of projects, step toward the project-led organization, and Brady and Davies (2004) describe building company-wide capabilities for routine project work; carrying out a reorganization is left to Change & Transformation.

The thinking behind it

Michael Hobday (2000): an innovative, knowledge-integrating form, weak at routine work, scale, and learning across projects.

Jörg Sydow, Lars Lindkvist, and Robert DeFillippi (2004): an emerging form for integrating specialized expertise, in an editorial; Lindkvist (2004) on market-like governance within hierarchies; DeFillippi and Arthur (1998) on human and social capital in free-agent careers.

Richard Whitley (2006, 2007): four ideal types, whose prevalence, he argues, varies across sectors and societies.

Arthur Stinchcombe (1959) and Rolf Lundin with Anders Söderholm (1995): craft administration and the temporary organization.

Christophe Midler (1995): projectification, why strong projects reshape the permanent organization.

Beth Bechky (2006; with Gerardo Okhuysen, 2011): role systems and bricolage in temporary crews.

Jonas Söderlund and Fredrik Tell (2009, 2011): the P-form corporation; Andrea Prencipe with Tell (2001): learning across projects.

Rodney Turner and Maxim Miterev (2019; Miterev, Mancini, and Turner 2017): design choices for the form.

Mats Fred (2015, an interpretive study of three processes in Swedish municipalities): porous public organizations; (2020, a study of local government read in its abstract, its argument interpretive): projectification reviving reporting, documentation, and standardization, not breaking with bureaucracy.

Also called

PBO. Project-based firm (Whitley 2006). Project organization. P-form, Söderlund and Tell's term (2009, 2011). Project-based enterprise (DeFillippi and Arthur 1998).

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.

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