M-form

The multidivisional form of organization that evolved out of the early 1900s, classic examples being AT&T and General Motors. This organizational structure, processes and decision-making mechanisms are well examined in the models proposed by Chandler (1962), Bower (1970) and Cyert and March (1963).

At MIT, business historian Alfred Chandler had become fascinated by the rapid spread of the new strategies and the organizations needed to manage them, and was tracing the trend to its roots in the pre-War period. His carefully documented research provided a richly textured interpretation of the new multidivisional organization that was beginning to dominate corporate structures in the United States and abroad (Chandler, 1962). At Carnegie Mellon, another extraordinary research effort was building on the foundations laid by Herbert Simon and James March in modeling human behavior to better understand how decisions were made in the complex new emerging corporations. The resulting behavioral theory of the firm was consolidated and formalized in the work of Cyert and March (1963). Several years later, at Harvard Business School, Joseph Bower's research into business planning and investment decision making led to a model of the strategic processes in multidivisional organizations, thereby creating a bridge between the new corporate structure described by Chandler and the theory of decision-making proposed by Cyert and March (Bower, 1970). (Source: Bartlett & Ghoshal, 1993).

In the M-form, the renewal process is clearly driven by highly effective leaders at the company's top level. In this specific attribute. This is in contrast to the Cyert and March model which is fundamentally different from Chandler's conceptualization of the classic M-form organization, which was premised on a strong leadership role of the top management. Alfred Sloan's towering presence in General Motors is perhaps the best known illustration of this role, as reflected in Chandler's (1962) description of him as the architect of GM's strategy, the builder of its structure, and the designer of its systems. Even since Sloan and his pioneering contemporaries discovered how the then emerging strategy of diversification was facilitated by the divisional structure and how that structure could be supported by some tightly designed planning and control systems, this strategy-structure-systems link has become an article of faith that has shaped top management roles in most large M-form organizations. (Bartlett, 1993).