BEYOND THE M-FORM - TOWARD A MANAGERIAL THEORY OF THE FIRM

Driven by a set of radical changes in their internal and external envi ronments, large global corporations are innovating a new organizationa l form. Premised on knowledge and expertise rather than capital or sca le as the key strategic resource, this new form is fundamentally diffe rent from the multidivisional organization that had emerged in the 192 0s and had become the dominant corporate model in the post-War years. In this article, we describe this new organization using Asea Brown Bo veri (ABB) as an illustration, and highlight its differences from the classic M-form by contrasting its structure, processes and decision-ma king mechanism against the models proposed by Chandler (1962), Bower ( 1970) and Cyert and March (1963). Our conceptualization of this emergi ng organization is grounded in a managerial perspective that is very d ifferent from the disciplinary foundations of existing economic and be havioral theories of the firm. We conclude by arguing for the need to create a 'managerial theory of the firm' that would be more attuned to the premises of the key actors within the firm so as to be able to il luminate the corporate world as seen by managers and encompass the iss ues that they perceive to be important.