1 Paper to be presented at the DRUID Summer Conference 2003 on CREATING, SHARING AND TRANSFERRING KNOWLEDGE. The role of Geography, Institutions and Organizations. Copenhagen June 12-14, 2003 Theme A-E Theme E: Networks, Projects and New Organizational forms as Vehicles for Knowledge Building and Transfer Project baronies: Growth and governance in the project-based firm David M Gann and Ammon J Salter* Innovation Studies Centre, The Business School, Imperial College London 12 Princess Gate, London SW7 2AZ Corresponding author: a.j.salter@sussex.ac.uk May 12, 2003 Abstract: Project-based firms grow through the execution and management of projects. Despite considerable interest in project-based forms of organising design, production and service delivery, there have been few attempts to locate the growth and development of these organisations within a conceptual framework. Using case studies from design, engineering and project management consultancies, we examine the formation of project ‘baronies’ within these organisations. We identify four ideal types of firm: Centralist; Tight Federation; Loose Federation, and Separatist. We contrast different constitutional settlements among the ‘barons’ inside each type of firm, examining the implication of the settlement for knowledge, capture, transfer and learning. The paper develops a conceptual framework for explaining the growth of project-based firms. We discuss the extent to which this can be generalised across a wide range of project-based activities and we conclude with questions and issues for further research. Keywords: Project-based firms, resource-based theory of the firm, innovation, learning JEL – code: L22, L23, L84