Organizational Form: Vertical Financial Ownership vs. Integration Methods
Explore the choice between vertical financial ownership and other methods of vertical integration in organizations. Factors such as task programmability, specificity, contracts, and social conditioning are discussed, along with different organizational forms like hierarchy, clan, and joint ventures.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
The Choice of Organizational Form: Vertical Financial Ownership Versus Other Methods of Vertical Integration Joseph T. Mahoney Strategic Management Journal 13(8): 559 84 (1992)
Low task programmability: Observing input (effort) is a poor measure for making rewards. High nonseparability: Observing output is a poor measure for making rewards. High specificity: Human, physical and/or site firm-specific investments are high. Spot market: The price system works smoothly. Long-term contract: Obligations of principals and agents are specified and enforced by third-parties (courts) Relational contract: Obligations of principals and agents are specified and self-enforced. Social conditioning applicable. Inside contract: A hybrid arrangement between contract and hierarchy that is best described as a 'manager as monitor setup. Joint ventures: An equity agreement whereby a separate entity is created. Hierarchy: A superior-subordinate relationship; financial ownership. Clan: Organization that is based on a vital sense of human solidarity.
