Hybrid Governance Structures Research Articles

Mechanisms of governance in the project-based organization:: Roles of the broker and steward

The last 50 years has seen a shift in the nature of work, from mass production, with stable customer requirements and slowly changing technology, to the current situation where every product or service may be supplied against a bespoke design, and technology changes continuously and rapidly. This modern environment is a more project-based economy. The management of the former situation was well understood, based on classical management theory, developed over the previous 100 years. Classical management offers the traditional organization many strengths derived from the functional hierarchy at its core. These include strong central planning, governance and control, knowledge management and human resource development. The project-based organization requires a new approach to its management, which addresses the unique, novel and transient nature of its work, but retains the strengths of classical management. This paper is one of a series aimed at deriving such a management paradigm for the project-based organization. In this paper, we describe governance structures adopted by successful project-based organizations, and how they use them to manage the interface between projects and their clients. We describe two roles observed at this interface, labelled the broker and steward. We provide a Transaction Cost perspective of the governance mechanisms observed and the two roles. We note that the same governance mechanisms are adopted whether the project is managed in the market or the hierarchy. This is in stark contrast to the classically managed organization, and suggests different pressures act on the project-based organization requiring hybrid governance structures to be adopted for all projects. We outline the roles of the broker and steward in the different project governance structures we have identified. We consider why it is necessary to have two roles, a broker and a steward, and not one person fulfilling both.

From hybrids to hierarchies: shareholder wealth effects of joint venture partner buyouts

This study examines the parent firm performance implications of joint venture (JV) partner buyouts, which involve the conversion of a hybrid governance structure to an internal unit within the firm's hierarchy. Transaction cost theory, as developed and applied in the international literature and market entry research, is extended to the post-entry investment setting to isolate sources of value creation or dissipation from the governance changes effected by JV partner buyouts. The evidence complements recent research on JV longevity and its determinants. Copyright © 2001 John Wiley & Sons, Ltd.

THE LIMITS OF HIERARCHY: “ENTERPRISE CORPORATIONS” IN CHINA

In shifting from central planning to market allocation of resources, a number of Chinese government organs were converted into “enterprise corporations,” hybrid governance structures which were supposed to attain the best of both market incentives and hierarchical coordination. This paper examines specific cases of enterprise corporations in light of the trade‐offs between markets and hierarchies predicted by transaction cost economics. It analyzes the problems which arose in the attempt to replicate the high‐powered incentives of markets within hierarchies.