The Adoption of the Multi‐divisional Form in Large Czech Enterprises: The Role of Economic, Institutional and Strategic Factors

Abstract

In the Czech Republic and elsewhere in the region, researchers have noted the widespread adoption of the multi‐divisional form (MDF) by the former state‐owned enterprises. In contrast to the accepted explanations in western capitalist societies, the spread of the MDF in post‐Communist economies has had little or nothing to do with growth strategies such as diversification. Developing ideas from the existing western literature, the paper examines the role of economic, institutional and strategic choice factors in three large, former state enterprises within the Czech post‐Communist context. The findings suggest that all three factors are theoretically important, but neither equally nor independently so. In particular, economic factors acted as a major constraint on structural choice only under extreme conditions, while institutional factors and strategic choice are best understood as interdependent moments in a recursive process of structural enactment.