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"Explaining and Predicting the Choice of Organizational Form: Integrating Performance Ambiguity and Asset Specificity Effects"

Joseph T. Mahoney and Regina C. McNally


First Author :

Joseph T. Mahoney
Business Administration
University of Illinois at Urbana-Champaign
1206 S. Sixth Street, M/C 706
350 Wohlers Hall
Champaign, IL 61820

217-244-7969 (Fax)

Second Author :

Regina C. McNally
Marketing and Supply Chain Management
Michigan State University
N370 North Business Complex
East Lansing, MI 48824

517-353-6381, ext. 255
517-432-1112 (Fax)

Abstract :
Organization theory suggests that various forms of performance ambiguity have governance implications for the strategic choice of control mechanism in organizational forms (e.g., Eisenhardt, 1985; Ouchi, 1979). Transaction costs theory emphasizes asset specificity as an important predictor of organizational form (e.g., Williamson, 1996). The current paper provides a new synthesis of performance ambiguity and asset specificity to better explain and predict the conditions under which various control mechanisms are more cost efficient.
Manuscript Received : 2004
Manuscript Published : 2004
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