In this study, we analyze how the organizational architecture of a multibusiness firm affects the adaptation of its constituent business units. Using an inductive analysis of GE's governance system from 1951 to 2001, we examine how the integration of corporate and business unit attention occurs within and across the firm's governance channels. Our theory identifies an unexplored aspect of the M-form's architecture: collective vertical interactions between the corporate office and business units through cross-level channels. Overall, we articulate three types of channel integration-cross-level, cross-functional, and channel coupling-and examine their effects on responsiveness to threats and opportunities. We find that despite an elaborate organizational architecture, there were periods when GE's governance system did not allow for coordination of corporate and business unit agendas. Our theory proposes that the temporal coupling of specialized, cross-level channels creates an organizational architecture that is both differentiated and integrated. This architecture integrates levels and issues simultaneously, yet focuses attention sequentially, providing more effective conditions for joint attention and coordination between the corporation office and the business unit and adaptive change at the business unit level.
- governance channels
- strategic adaptation
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management