THE MULTIDIVISIONAL STRUCTURE - ORGANIZATIONAL FOSSIL OR SOURCE OF VALUE

The multidivisional (M-form) structure has been variously characterize d as the most significant organizational innovation in the twentieth c entury (Williamson, 1985) and as an organizational fossil that is incr easingly irrelevant in the modern world (Bettis, 1991). Against this b ackground, the purpose of this paper is threefold. First, to criticall y evaluate three perspectives, including transaction cost, strategic m anagement and sociological, relating to the M-form firm. Second, to ex amine what the empirical evidence finds about relationships proposed b y these perspectives. Finally, to develop a model that summarizes the relationships proposed among these perspectives and make suggestions a bout future theory building and areas where further empirical work is needed