Coordinating Changes in M-form and U-form Organizations

Yingyi Qian, Gérard Roland and Chenggang Xu

No 284, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: We introduce a method of modelling coordination inside an organization as a process of "attribute matching." Using this method, we compare organizational forms (U-form and M-form) in coordinating changes. In our model, organizational forms affect the information structure of an organization and thus the way to coordinate changes. Compared to the U-form, the M-form organization achieves better coordination but suffers from higher costs due to a lack of scale economies or a lack of what we call "attribute compatibility." The M-form has a distinctive advantage in carrying out experimentation which gives the organization more flexibility leading to more innovation and reform. We apply our theory to business firms, transition economies, and the organization of government (especially federalism). In the case of transition economies, our theory relates the initial conditions of organizational differences with reform strategies, especially the "big-bang" approach in Eastern Europe and the "experimental" approach in China.

Keywords: organization; M-form; U-form; innovation; transition; organization of government; experimentation (search for similar items in EconPapers)
Pages: pages
Date: 1999-05-01
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (2)

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Working Paper: Coordinating Changes in M-Form and U-Form Organizations (2000)
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