Ownership and Performance of Professional Service Firms

Posted: 23 May 2013 Last revised: 25 May 2013

See all articles by Royston Greenwood

Royston Greenwood

University of Alberta - Department of Strategic Management and Organization

David L. Deephouse

Alberta School of Business, University of Alberta

Stan Xiao Li

York University - Schulich School of Business

Date Written: February 1, 2006

Abstract

Understanding the effects of ownership upon organizational performance is a well-established theme in organization theory, but comparison across ownership forms has been neglected. We develop hypotheses comparing public corporations, private corporations and partnerships and test them in a sample of large management consultancies. We find that private corporations and partnerships outperform public corporations. We attribute this difference to increased monitoring by owners and greater motivation by professional workers seeking ownership stakes. Contrary to Durand and Vargas (2003), we find that organizational complexity has neither a direct nor a moderating effect.

Keywords: organizational performance, ownership, professional service firms

Suggested Citation

Greenwood, Royston and Deephouse, David L. and Li, Stan X., Ownership and Performance of Professional Service Firms (February 1, 2006). Organization Studies, Vol. 28, No. 2, 2007, University of Alberta School of Business Research Paper No. 2013-404, Available at SSRN: https://ssrn.com/abstract=2268738

Royston Greenwood (Contact Author)

University of Alberta - Department of Strategic Management and Organization ( email )

Edmonton, Alberta T6G 2R6
Canada

David L. Deephouse

Alberta School of Business, University of Alberta

Edmonton, Alberta T6G 2R6
Canada
780 492-5419 (Phone)
780 492-3325 (Fax)

Stan X. Li

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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