Chapter 2: Partnership as a Major Type of Organization Form
INTRODUCTION This chapter provides an overview of partnerships as a special class of organizations. A distinction is made between ownership-derived governance and organization structure to articulate their distinctive features. Partnerships are highly human asset-intensive which means that they govern the ﬁrms’ strategic capabilities but also face major challenges in attracting, specializing and advancing their members. Here we delineate the properties of partnerships and contrast them with other classes of organizations. The ownership-governance and organizational structure in human assetintensive ﬁrms assume each other. In other words, the creation and upgrading of strategic capabilities by the corporate leadership are very much a function of the authority and control structure that surrounds the organizational strategists. Ownership structure deals mainly with the relationship between owners and managers around the ﬁrm as a bundle of strategic assets – in knowledge-intensive ﬁrms mostly carried by people – while organization structure deals with managers and employees, the stratiﬁcation of people into various echelons and positioned in diﬀerent departments. The governance structure is central to the building and upgrading of strategic capabilities. The ﬁrm comprises a bundle of routines – both lower order routines such as sales, marketing, ﬁnance and production and higher order or meta-routines that govern the organization of lower order routines. In Chapter 4, for instance, results are presented on a ﬁrm’s superior human and social capital and the performance advantages that are associated with such non-ﬁnancial capital. Chapter 6 describes mergers and acquisitions between professional services ﬁrms and explores their relative success based upon...
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