Nonmarket, nonbureaucratic organizational arrangements—"hybrids"—are significant features in today's fast-changing business world. This article describes the rationale for various kinds of hybrid forms such as craft-based producer networks, strategic partnerships in high-technology, extended trading groups, and vertically disaggregated large firms. It argues that these hybrids are a response to recent structural changes in the economy. Hybrids capture some of the powerful incentives associated with small firms, are better able to access know-how located outside of organizational boundaries, and provide for more rapid and reliable information flow. Finally, this article discusses the limitations of hybrid forms and speculates as to whether they represent a fundamental or transitional change.
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