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The Evolution of intracorporate domains: divisional charter losses in high-technology, multidivisional corporations

Author: Galunic, D. Charles ; Eisenhardt, K. M.INSEAD Area: Strategy Series: Working Paper ; 95/75/OB/SM Publisher: Fontainebleau : INSEAD, 1995.Language: EnglishDescription: 47 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: Modern corporations have become synonymous with the multidivisional form of organization. Variously interdependent divisions are "charted" to look after one or more business areas, in effect defining the "turf" of the division and its purpose within the corporation, and collectively defining the corporate domain. However, once created, these divisional charters should not be regarded as rigid; they are susceptible to change. These charter changes are seen as an adaptive device for large, multidivisional corporations in fast-paced environments. This paper presents a process model of how divisions change their domains in hypercompetitive contexts, focusing on the specific question of how divisions lose all or portions of their business charters. It is based on a larger inductive study of charter changes in 10 divisions, both domestic and foreign, of a large, multinational, high-technology corporation. Data were collected over an 18 month period. Over 80 informants were interviewed
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Modern corporations have become synonymous with the multidivisional form of organization. Variously interdependent divisions are "charted" to look after one or more business areas, in effect defining the "turf" of the division and its purpose within the corporation, and collectively defining the corporate domain. However, once created, these divisional charters should not be regarded as rigid; they are susceptible to change. These charter changes are seen as an adaptive device for large, multidivisional corporations in fast-paced environments. This paper presents a process model of how divisions change their domains in hypercompetitive contexts, focusing on the specific question of how divisions lose all or portions of their business charters. It is based on a larger inductive study of charter changes in 10 divisions, both domestic and foreign, of a large, multinational, high-technology corporation. Data were collected over an 18 month period. Over 80 informants were interviewed

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