Organizing the Usual Suspects: Structuring Temporary Organizations

Abstract

Temporary vertical groups shift boundary decisions from a make, buy, or ally choice by a single firm acting alone to a collaborative decision influenced by the entire group. Using archival data on bridge construction project networks, we apply traditional theories of the firm at the group level of analysis. Using maximum likelihood estimation (Tobit) techniques, our findings on uncertain and complex construction projects support traditional organizational logics. However, contrary to orthodox Transaction Cost Economics (TCE) predictions, we found that longer and larger projects did not lead to more embedded vertical groups.