Capital Dependence, Business Political Behavior, and Change to the Multilayered Subsidiary Form Academic Article uri icon

abstract

  • In response to economic globalization and uncertainty, big business mobilized politically in the 1970s and 1980s and state managers set up neoliberal economic policies that restructured the institutional arrangements in which corporations are embedded. This article examines why corporations change or do not change their form during a period of economic uncertainty (1981-1993). Using a sample of the 100 largest U.S. industrial parent companies, we examine why some corporations organize all or most of their business units as subsidiaries while others retain their multidivisional form. The event-history analysis shows that whereas business political behavior significantly reduces the probability of change to the MLSF, capital dependent corporations are significantly more likely to change from the multidivisional form to the multilayered subsidiary form (MLSF). The case study of Enron Corporation shows that in the absence of regulation, the MLSF results in opportunistic managerial behaviors.

published proceedings

  • Social Problems

author list (cited authors)

  • Boies, J., & Prechel, H.

citation count

  • 30

complete list of authors

  • Boies, John||Prechel, Harland

publication date

  • August 2002