Visions of Corporate Organisation: From the Multidivisional to the Segmented Form of Organisation in AT&T, IBM, and NEC

Martin Fransman

in Visions of Innovation

Published in print May 1999 | ISBN: 9780198289357
Published online November 2003 | e-ISBN: 9780191596261 | DOI:

Series: Japan Business and Economics Series

 Visions of Corporate Organisation: From the Multidivisional to the Segmented Form of Organisation in AT&T, IBM, and NEC

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The chapter begins by analysing the tendency for the modern large industrial corporation to decentralize by examining the transition from the unitary form of organization (or U‐Form) to the multidivisional form (or M‐Form). The discussion then moves on to consider the difficulties arising in IBM and AT&T (both US companies) that led to major reorganizations of both these companies around 1990; it is shown that in order to deal with these difficulties, IBM and AT&T have come to believe that their activities need to be further decentralized, and it is this vision of organization that led them to construct what is referred to in this chapter as a segmented form of organization (or S‐Form). The characteristics of the S‐Form are then analysed by comparing it with the U‐Form and the M‐Form. The case of NEC (Japan) is then examined, and it is shown that it was in 1965, when the company underwent its most significant organizational change since the war, that NEC adopted an S‐Form of organization; they then underwent further major reorganization in 1991–2. The final part of the chapter deals with the different ways in which AT&T, IBM, and NEC, in the light of their different visions of organization, have attempted to coordinate their activities in order to realize synergies and economies of scope within the context of their decentralized S‐Forms of organization; these modes of coordination are categorized and their strengths and weaknesses analysed.

Keywords: activities; AT&T; companies; coordination; corporate organization; decentralization; firms; IBM; Japan; M‐Form; multidivisional form; NEC; organization; segmented form; S‐Form; U‐Form; unitary form of organization; USA; vision

Chapter.  7054 words.  Illustrated.

Subjects: Microeconomics

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