Vertical Integration as Organizational Strategy Formation

Abstract

This paper contributes to research into the strategy-environment relationship, especially looking at the issue of vertical integration. It aims at a synthesis of process and content approaches to strategic change on the level of the organization's dominant group. The key factor is uncertainty, which will be defined as the gap between perceptual competence of the dominant group and environmen tal difficulty. After presenting a typical vertical integration case, the vertical integration literature is surveyed. Next, a framework of strategy-making under uncertainty serves as a vehicle to formulate some propositions on the formation of vertical integration strategy.