A preoccupation with network approaches in terrorism studies has inadvertently marginalized the fact that terrorist groups are subject to many of the same bureaucratic forces that impact all purposeful organizations. Because typical organizations are subsumed in the concept of networks, it is curious that scholars have been so quick to bypass more traditional models of organizations and bureaucracy that may help us understand network topology. This article relies on the new institutional approach to organizational behavior. Using the Coase theorem to explain the costs and benefits associated with different organizational structures, it follows that counterterrorism efforts may drive some groups toward greater autonomy while compelling others to adopt common bureaucratic processes, often referred to as isomorphism. By exploring the different costs that terror groups face and examining the characteristics of terrorists associated with different groups, organizational theory can help explain a divergent trend in terrorism research: leaderless jihad and increased bureaucratization.