Organizational Form,Ownership Structure and Corporate Performance: A Contextual Empirical Analysis of UK Companies1

This paper contributes to the literature on organizational form and performance (the performance-conduct paradigm) by examining the impact of two sets of variables that have not been examined previously: measures of environmental uncertainty and alternative forms of controlling separation of ownership from control. The paper first examines the extent to which contextual variables such as perceived environmental uncertainty and age of the organizational form moderate the relationship between organizational form and corporate performance. Next, the paper extends the analysis by examining the possible effects of ownership and control structures on performance. Measures suggested by agency theory, such as conventional ownership proxies (i.e. proportion of shares held by identifiable, homogenous groups), the proportion of non-executive board members and Fama and Jensen's concept of separation of decision management from decision control are used in the analysis. The results indicate that these measures have direct impact on corporate performance in their own right, though the main impact is indirect through interactions with organizational form variables.