Between Markets and Hierarchies: Towards a Better Taxonomy of Hybrid Organizational Forms?

Abstract In this paper, the authors attempt to better classify and characterize hybrid organizational forms. They proceed by briefly discussing some general principles of taxonomy and then they critically evaluate extant taxonomic schemas of hybrid forms that typically use as their reference point the dichotomous ideal types of market and hierarchy. The problem of classifying hybrids in relation to these ideal types is demonstrated, and it is pointed out that these ideals have contested meanings and governance modes are treated as ‘natural givens’. The paper concludes with the observation that if we sharpen our definition of what constitutes firms and markets, the task in accounting for what lies in between is made much easier. Specifically, and following Hodgson, it is concluded that by returning to a conceptualization of firms as legal entities, much analytical confusion can be averted. In addition, it is suggested that theorizing needs to be accompanied by empirical work that focuses on the actual practices that are used to control and coordinate exchange relationships.