U-form (unitary form) organizationan organizational structure adopted by FIRMS in which the firm is managed centrally as a single unit specialized along functional lines (marketing, production finance, personnel). Williamson coined this term and argued that firms organized in this fashion are likely to suffer control loss and end up pursuing nonprofit management goals (see MANAGEMENT-UTILITY MAXIMISING) because senior executives responsible for the management functions cannot exert sufficient control over their subordinates selling a wide variety of products in many different markets. By contrast, it is argued that in firms with an M-FORM (MULTIDIVISIONAL) ORGANIZATION, top managers can set clear goals for company divisions and so suffer less control loss. See also MANAGERIAL THEORIES OF THE FIRM, BEHAVIOURAL THEORIES OF THE FIRM.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005