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A Computer Simulation Test of the M-Form Hypothesis
Richard M. Burton and Borge Obel
Administrative Science Quarterly
Vol. 25, No. 3 (Sep., 1980), pp. 457-466
Published by: Sage Publications, Inc. on behalf of the Johnson Graduate School of Management, Cornell University
Stable URL: http://www.jstor.org/stable/2392263
Page Count: 10
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This research tests Williamson's M-form hypothesis which posits an information imperative of organizational form instead of a technology imperative. The experimental design is a two-by-two factorial design. Two levels of decomposability of technology are the values for the first variable. The multidivisional form (M-form) and the unitary (U-form) are the values for the second variable. The data are generated from a perturbed decomposed mathematical programming model that is coordinated by a Dantzig-Wolfe pricing approach. The data are analyzed using the Kruskal-Wallis nonparametric approach. The results substantiate Williamson's hypothesis that the M-form of organization is superior to the U-form organization alternative. For each of the two levels of decomposability of technology, the M-form of organization yields higher profit solutions than the U-form.
Administrative Science Quarterly © 1980 Johnson Graduate School of Management, Cornell University