Abstract

We present the business federation as a new organizational form. We illustrate how management consulting firms can achieve economic growth through operating locally within an international network. We use management consulting firms operating in Western Europe as our empirical setting. Within the business federation local offices gain access to resources through an extreme form of delegation as it is not top management that delegates to local offices but rather local units that give top management the permission to handle certain tasks because it is most efficient to do so. Using questionnaire as instrument, the article illustrates how the business federation is supposed to function through the use of five organizational design parameters. The research shows a support for the claim that firms that operate close to principles of the business federation achieve a stronger economic growth than other firms operating further away from the federation, using profits per partner as the criteria. Firms that started out from strategy consulting achieve a higher growth rate than other firms. The research contradicts claims found in the academic literature as alternatives to the partnership model supports economic growth.

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