The Allocation of Ownership Rights in Consulting Firms



This paper investigates the antecedents of the allocation of ownership rights in the case of large consulting firms. We draw on theoretical work by Hansmann (1996) and others in order to develop hypotheses, which we then test using regression analysis. We also explore the performance effects of the allocation of ownership rights. The results confirm the significance of capital requirements, business risk and organization size as determinants of the allocation of ownership rights in consulting firms. We do not find ownership allocation to be a significant driver of performance. The results confirm Hansmann’s view that the optimal allocation of ownership rights is an endogenously determined by the conditions under which firms operate.


Biographical information:

Ansgar Richter is the Head of the Chair of Management and Consulting at the European Business School in Wiesbaden, Germany. An organization theorist by background, his research focuses primarily on the strategy and structure of consulting firms and other professional service firms. Ansgar Richter studied philosophy and economics at the universities of Frankfurt and Bochum before moving to the London School of Economics, where he completed a Masters degree in Industrial Relations and Personnel Management and a PhD in Management. He also was a visiting scholar at the University of California at Berkeley. Subsequent to his studies, he worked for several years as a management consultant with McKinsey & Company, Inc, where he advised companies in Germany, Great Britain, Luxembourg, Finland and the United States on matters of corporate strategy and organisation. In 2002, he decided to move back into academia. Since that time, he has published extensively, both in academic and in practitioner-oriented journals. In 2005, he was a visiting scholar at the Stanford Graduate School of Business.
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J. Hans van Oosterhout