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- Publisher
- Wiley
- Copyright
- Copyright © 1996 John Wiley & Sons, Ltd.
- ISSN
- 0143-2095
- eISSN
- 1097-0266
- DOI
- 10.1002/(SICI)1097-0266(199605)17:5<395::AID-SMJ826>3.0.CO;2-E
- Publisher site
- See Article on Publisher Site
Abstract
This paper develops and tests the hypothesis that greater R&D diversification is associated with less divisionalization in multidivisional firms. It argues, from transaction cost theory, that the extent of divisionalization of a large firm is indicative of its emphasis on interdivisional coordination, since fewer divisional boundaries reduce interdivisional bargaining costs. Also, greater interdivisional coordination is required to pursue strategies which exploit R&D undertaken in diverse but complementary fields, that is, strategies aimed at broadening technological capabilities. Conversely, less interdivisional coordination is required for more specialized R&D, that is, for strategies aimed at deepening existing capabilities. The hypothesis finds support in patent and organizational data.
Journal
Strategic Management Journal – Wiley
Published: May 1, 1996