CORPORATE DIVERSIFICATION REVISITED: The PoliticalLegal Environment, the MultilayerSubsidiary Form, and Mergers and Acquisitions
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This article examines causes of product-line diversification in the largest 200 U.S. corporations between 1986 and 1996. The analysis shows that some corporations decreased their level of diversification. However, in contrast with previous studies, other corporations became more diversified. Change in the number of first-level subsidiaries and the value of mergers and acquisitions influenced corporate diversification. In contrast with the multidivisional form, the organizational characteristics of the multilayer-subsidiary form give management greater capacity to socialize capital, pursue mergers and acquisitions, and manage a large and diversified corporation. This multilayer-subsidiary form limits the managerial problem of bounded rationality by organizing product lines and product groups in legally independent subsidiary corporations that are embedded in their respective markets. 2008 Midwest Sociological Society.
author list (cited authors)
Prechel, H., Morris, T., Woods, T., & Walden, R.
complete list of authors
Prechel, Harland||Morris, Theresa||Woods, Tim||Walden, Rachel