Journal Article

Adoption of the Multidivisional Structure: Analyzing History from the Start

BRUCE KOGUT and DAVID PARKINSON

in Industrial and Corporate Change

Volume 7, issue 2, pages 249-273
Published in print June 1998 | ISSN: 0960-6491
Published online June 1998 | e-ISSN: 1464-3650 | DOI: https://dx.doi.org/10.1093/icc/7.2.249
Adoption of the Multidivisional Structure: Analyzing History from the Start

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  • Industrial History
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The multidivisional structure represents one of the most studied and important organizational innovations. Chandler's historical account stresses the imitation effects of industry adoption, and of firm efficiency, as influenced by such characteristics as size and diversification, on the diffusion of the divisional structure. Recent statistical work in the marketing literature has, however, found either no imitation or no firm characteristic effects on adoption. Studies in organizational sociology have questioned the role of efficiency in the adoption process. By collecting data from the time of the first adoption to 1980, the following study is able to analyze the critical early history of diffusion. A hazard model with imitation and firm covariates is used to predict the hazard rates. A sample of 62 firms is split into fast and slow adopters, and an inverse Gaussian hazard model is estimated to compare the drift among the split samples. The results largely confirm Chandler's historical account, but with some important qualifications that point to the importance of the local nature of information within industries.

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Subjects: Industrial History ; Business History ; Innovation ; Technological Change; Research and Development ; Industry Studies

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