Managerial Discretion, Organization Form, and the Multi-division Hypothesis

  • Oliver E. Williamson


Implicit in my previous research on the sources and consequences of managerial discretion [43], [46] has been the assumption that the firm is organized along the lines of what I will refer to here as the ‘unitary form’. Although the possibility of divisionalization was recognized and some of the organizational effects of divisionalization were briefly discussed ([43], pp. 120, 124, 160–1), these were left mainly undeveloped.


Capital Market Organizational Innovation Functional Executive Managerial Discretion Unitary Form 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. [1]
    Adelman, M. A., ‘The Antimerger Act, 1950–60’, American Economic Review, li (May 1961) 236–44.Google Scholar
  2. [2]
    Alchian, A. A., ‘Corporate Management and Property Rights’, in Economic Policy and the Regulation of Corporate Securities, ed. H. G. Manne,(Washington, D.C., 1969).Google Scholar
  3. [3]
    Ansoff, H. I., and Weston, J. F., ‘Merger Objectives and Organization Structure’, Quarterly Review of Economics and Business, u (Aug 1962) 49–58.Google Scholar
  4. [4]
    Arrow, K. J., ‘Control in Large Organizations’, Management Science, x (Sep 1963) 397–408.Google Scholar
  5. [5]
    Ashby, W. Ross, Design for a Brain (New York, 1960).CrossRefGoogle Scholar
  6. [6]
    Baumol, W. J.,Business Behavior, Value and Growth (New York, 1959).Google Scholar
  7. [7]
    Baumol, W. J.,‘The Theory of Expansion of the Firm’, American Economic Review, La (Dec 1962) 1078–87.Google Scholar
  8. [8]
    Baumol, W. J., The Stock Market and Economic Efficiency (New York, 1965).Google Scholar
  9. [9]
    Baumol, W. J., and Fabian, T., ‘Decomposition, Pricing for Decentralization, and External Economies’, Management Science, xi (Sep 1964) 1–32.CrossRefGoogle Scholar
  10. [10]
    Berle, A. A., and Means, G. C., The Modern Corporation and Private Property (New York, 1932).Google Scholar
  11. [11]
    Blair, J. M., ‘The Conglomerate Merger in Economics and Law’, Georgetown Law Review, xliu (summer 1958) 79–92.Google Scholar
  12. [12]
    Brown, Donaldson, ‘Pricing Policy in Relation to Financial Control’, Management and Administration, i (Feb 1924) 195–8.Google Scholar
  13. [13]
    Celler, Hon. Emanuel, ‘A Study of Conglomerates: Where Are They Leading Us?’, address before the American Management Association, 12 June 1969.Google Scholar
  14. [14]
    Chandler, A. D., Jr, Strategy and Structure, (Anchor Books ed., New York, 1966).Google Scholar
  15. [15]
    Charnes, A., Clower, R. W., and Kortanek, K. O., ‘Effective Control through Coherent Decentralization with Preemptive Goals’, Econometrica, xxxv (Apr 1967) 244–320.Google Scholar
  16. [16]
    Cole, A. H., ‘The Entrepreneur: Introductory Remarks’, American Economic Review, lviii (May 1968) 60–3.Google Scholar
  17. [17]
    Cyert, R. M., and March, J. G., A Behavioral Theory of the Firm (Englewood Cliffs, N.J., 1963).Google Scholar
  18. [18]
    Downs, A., Inside Bureaucracy (New York, 1967).Google Scholar
  19. [19]
    Edwards, C. D., statement in Economic Concentration, Part 1: Overall and Conglomerate Aspects, Hearings Before the Subcommittee on Antitrust and Monopoly, 82nd Congress (Washington, D.C., 1964) 36–47.Google Scholar
  20. [20]
    Emery, J. C., Organizational Planning and Control Systems: Theory and Technology (New York, 1969).Google Scholar
  21. [21]
    Galbraith, J. K., The New Industrial State (New York, 1967).Google Scholar
  22. [22]
    Hayes, S. L. III, and Taussig, R. A., ‘Tactics of Cash Takeover Bids’, Harvard Business Review, xiv (Mar-Apr 1967) 136–47.Google Scholar
  23. [23]
    Heflebower, R. B., ‘Observations on Decentralization in Large Enterprises’, Journal of Industrial Economics, ix Nov 1960) 7–22.Google Scholar
  24. [24]
    Jewkes, J., ‘How Much Science’, Economic Journal, lxx (Mar 1960) 1–13.Google Scholar
  25. [25]
    Klaw, Spencer, ‘The Soap Wars: A Strategic Analysis’, Fortune (June 1963) pp. 123 ff.Google Scholar
  26. [26]
    March, J. M., and Simon, H. A., Organizations (New York, 1958).Google Scholar
  27. [27]
    Marris, R., ‘A Model of the ‘Managerial’ Enterprise’, Quarterly Journal of Economics, lxxvii (May 1965) 185–209.Google Scholar
  28. [28]
    Marris, R., The Economic Theory of ‘Managerial’ Capitalism (New York, 1964).Google Scholar
  29. [29]
    Mason, E. S. (ed.), The Corporation in Modern Society (Cambridge, 1960).Google Scholar
  30. [30]
    Mitchell, J. N., ‘Antitrust Policies’, B.N.A. Antitrust and Trade Regulation Reporter 10 June 1969, x-9 to x-11.Google Scholar
  31. [31]
    Monsen, R. J., Jr, and Downs, A., ‘A Theory of Large Managerial Firms’, Journal of Political Economy, IA= (June 1965) 221–36.Google Scholar
  32. [32]
    Nevins, A., and Hill, F. E., Ford: Expansion and Challenge, 1915–1933 (New York, 1957).Google Scholar
  33. [33]
    Peterson, S., ‘Corporate Control and Capitalism’, Quarterly Journal of Economics, lxxix (Feb 1965).Google Scholar
  34. [34]
    Posner, R. A., ‘Natural Monopoly and its Regulation’, Stanford Law Review, xxi (Feb 1969) 548–643.Google Scholar
  35. Reid, S. R., Mergers, Managers and the Economy (New York, 1968).Google Scholar
  36. Schumpeter, J. A., Capitalism, Socialism, and Democracy (New York, 1947).Google Scholar
  37. [37]
    Schumpeter, J. A., The Theory of Economic Development (New York, 1961).Google Scholar
  38. [38]
    Simon, H. A., ‘On the Concept of Organizational Goal’, Administrative Science Quarterly, ix (June 1964) 1–22.Google Scholar
  39. [39]
    Sirkin, G., The Visible Hand: The Fundamentals of Economic Planning (New York, 1968).Google Scholar
  40. [40]
    Turner, D. F., ‘Conglomerate Mergers and Section 7 of the Clayton Act’, Harvard Law Review, lxxvtu (May 1965) 1313–95.Google Scholar
  41. [41]
    Turner, D. F.,and Williamson, O. E., ‘Market Structure in Relation to Technicaland Organizational Innovation’ (forthcoming).Google Scholar
  42. [42]
    Vickers, Sir Geoffrey, Towards a Sociology of Management (New York, 1967).Google Scholar
  43. [43]
    Williamson, O. E., The Economics of Discretionary Behavior: Managerial Objectives in a Theory of the Firm (Englewood Cliffs, N.J., 1964).Google Scholar
  44. [44]
    Williamson, O. E., ‘Hierarchical Control and Optimum Size Firm’, Journal of Political Economy, lxxv (Apr 1967) 123–38.Google Scholar
  45. [45]
    Williamson, O. E., ‘The Economics of Defense Contracting: Incentives and Performance’,in Issues in Defense Economics (New York, 1967) pp. 218–56.Google Scholar
  46. [46]
    Williamson, O. E., ‘A Dynamic Stochastic Theory of Managerial Behavior’, in Prices: Issues in Theory, Practice, and Public Policy, ed. A. Phillips and O. E. Williamson (Philadelphia, 1968) pp. 11–31.Google Scholar
  47. [47]
    Williamson, O. E., ‘Corporate Control and the Theory of the Firm’, in Economic Policyand the Regulation of Corporate Securities, ed. H. G. Manne (Washington, D.C., 1969).Google Scholar
  48. [48]
    Williamson, O. E., ‘Administrative Controls and Regulatory Behavior’, (forthcoming).Google Scholar
  49. [49]
    Williamson, O. E., Corporate Control and Business Behavior (Englewood Cliffs, N.J., 1970).Google Scholar

Copyright information

© The President and Fellow of Harvard College 1971

Authors and Affiliations

  • Oliver E. Williamson

There are no affiliations available

Personalised recommendations