The evolutionary dynamics of diversified business groups in the west history and theory

Abstract

This chapter examines the historical origins, evolutionary paths, and long-term resilience of diversified business groups in the economies of Western Europe, North America, and Oceania from the nineteenth century to the present. In examining the developmental dynamics of diversified business groups in those economies, it aims to propose a new interpretation of the long-term evolution of large business enterprises in different market and institutional settings. The chapter suggests that diversified business groups are not simply transitional and second-best organizations that worked well only at the early phase of modern economic growth and will not necessarily become an obstacle for dynamic industrial development as the economies mature. Instead, as the business groups flexibly co-evolve with changing market and institutional environments, they can stay on as a viable model for business organizations even in developed markets.