Bureaucratic versus Craft Administration: The Relationship of Market Structure to the Construction Firm

I would like to thank Harrison White for a number of helpful comments. Robert Miles, John Kotter, and Paul Lawrence also provided useful criticisms and suggestions. ThreeASQ reviewers contributed a great deal to the clarity and exposition of the arguments in this paper. This paper examines subcontracting and characteristics of firms in the construction industry. It argues that subcontracting by general contractors can be explained by complexity, size, and market extent. Data are provided to substantiatethese claims and to disconfirm the hypothesis that subcontracting isa responseto seasonal variability, a major alternative explanation. Extensive subcontracting has implications for the nature of the construction firm. The paper then examines Stinchcombe's (1959) thesis that construction firms are managed through craft administration. It is argued that firm size, role in the production process, and census classification problems are better explanations for the administrative structure of construction firms. This raises questions about the validity of Sti nchcombe's thesis.