Corporate Form and the State: Business Policy and Change from the Multidivisional to the Multilayered Subsidiary Form.

This paper examines a central issue in organizational research and addresses a core theoretical problem in historical and political sociology: The conditions under which social actors that share economic interests mobilize, and their capacity to alter dimensions of the social structure that impinge on those interests. The social actors of concern here are capitalist class fractions and state managers. The capital dependence perspective elaborated here suggests that when the institutional environment no longer ensures an adequate rate of capital accumulation, capitalists mobilize to restructure their environment. The specific focus is on how capitalists and state managers experimented with state business policy to change the politico-legal dimension of corporations' institutional environment in the 1970s and 1980s, and how the new business policy was a response to existing constraints on capital accumulation and a perceived solution to those constraints. The first part of this paper develops a theoretical framework that places the modem corporation in its historical and institutional context. The second part examines changes in state business policy in the 1980s that affect the corporate form. The third part identifies crucial characteristics of the emerging subsidiary form. The fourth part examines empirical data on the corporate form and presents several propositions to guide future research on why corporations are changing their form.