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

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  • Mahoney, Joseph T.

    (U of Illinois at Urbana-Champaign)

  • McNally, Regina C.

    (Michigan State U)

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.

Suggested Citation

  • Mahoney, Joseph T. & McNally, Regina C., 2004. "Explaining and Predicting the Choice of Organizational Form: Integrating Performance Ambiguity and Asset Specificity Effects," Working Papers 04-0109, University of Illinois at Urbana-Champaign, College of Business.
  • Handle: RePEc:ecl:illbus:04-0109
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    File URL: http://www.business.illinois.edu/Working_Papers/papers/04-0109.pdf
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    References listed on IDEAS

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    Cited by:

    1. Franken, Jason R.V. & Pennings, Joost M.E. & Garcia, Philip, 2009. "Do Transaction Costs and Risk Preferences Influence Marketing Arrangements in the Illinois Hog Industry?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(2), August.

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