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Internal organization and enterprise performance: Some UK evidence
Author(s) -
Hill Charles W. L.
Publication year - 1985
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090060404
Subject(s) - profitability index , closeness , business , sample (material) , work (physics) , knowledge management , management , industrial organization , classical economics , economics , computer science , mathematics , finance , engineering , mechanical engineering , mathematical analysis , chemistry , chromatography
The research reported in this paper is based upon the theoretical work of O. E. Williamson (1970, 1975) concerning the impact of internal organizational form upon business behaviour and enterprise financial performance. A sample of 144 large UK firms are classified according to the organizational classification scheme developed by Williamson and Bhargava (1972). An empirical investigation is then undertaken which lests for the impact of organisational form upon financial performance. The results are broadly consistent with both theoretical predictions and the findings of other researchers in so far as the pure M‐form (multidivisional) structure is found to be associated with superior profitability. However, the evidence also suggests that the frequency of occurrence of pure M‐form firms as a subset of all multidivisions may be rather lower than previously thought, and the closeness of the multidivisional/pure M‐form link is questioned.