A Systems View of Corporate Diversification

Teresa Lopes

International Studies of Management & Organization, 2015, vol. 45, issue 4, 342-358

Abstract: This article extends the systems view of the global economy to the study of corporate diversification. In the systems view, the economy is disaggregated from the industry and the firm level to explain the boundaries of the firm. The economic environment generates imperfections in markets and in firms. These imperfections generate costs, which create incentives for firms to internalize physical and intellectual linkages, such as manufacturing equipment and marketing knowledge. Drawing on the case of the global alcoholic beverages industry from the 1960s until the 2010s, I conclude that it is necessary to combine these two types of linkages and take into account the volatility of the environment in order to provide a dynamic and full account of corporate diversification.

Date: 2015
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DOI: 10.1080/00208825.2015.1006039

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