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How does vertical integration and diversification impact a company’s organizational structure and activity?

How does vertical integration and diversification impact a company’s organizational structure and activity?

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Answer #1

How does vertical integration and diversification impact a company’s organizational structure and activity?

  • vertical integration makes a company self sufficient by expanding vertically from owning suppliers and distribution networks
  • vertical integration eliminates suppliers and distributors thus expanding the organizational structure and workforce
  • diversification is when a company ventures into new businesses
  • diversification expands workforce to manage different field of businesses
  • diversification requires centralized leadership to centrally manage all fields
  • vertical integration requires disintegrated leadership to manage each department individually
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