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Divisional Multimarket Contact Within And Between Multiunit Organizations, Arturs Kalnins
Divisional Multimarket Contact Within And Between Multiunit Organizations, Arturs Kalnins
Arturs Kalnins
The theory of multimarket contact has important but uninvestigated implications for interactions among a firm's divisions because divisions often meet and even compete in multiple geographical and product markets. I hypothesize that firms with incentives to induce competition among divisions will act to reduce levels of multimarket contact among those divisions. Further, I predict that, in markets with substantial uncertainty, firms will increase divisional multimarket contact. I find support for these hypotheses in the setting of the franchised fast-food industry.