There is a lack of applicable model for understanding stability affected by combination of incentive and direct control for an economic regulation within mixed-forms. The research on stability of an economic regulation has mostly been focused on incentive or direct control in a U-form or M-form dominated organization. Therefore, the purpose of this study has been to discover a universal model for explaining stability affected by combination theory, leading to high mixed-form organizations performance.

This dissertation illustrates the relative theories bound to the research topic and moves one step forward into hierarchies, the U-form dominated and M-form dominated mixed forms. And this dissertation puts forward a hypothesis on how to lead an economic regulation to more stable. The suggested theory was empirically tested in a case study and received strong support. The conclusion of the conducted research is that an economic regulation governed by an M-form dominated organization with stronger incentive and less direct control is more stable than a U-form dominated organization with weaker incentive and more direct control.