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Multiple Facilities, Strategic Splitting And Vertical Structures: Stability, Growth And Distribution Reconsidered

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  • DAN COFFEY
  • PHILIP R. TOMLINSON

Abstract

This paper explores comparative cost structures when large firms split operations between separate production facilities in a way that puts pressure on wage rates and worker effort levels: one example of a ‘divide and rule’ strategy. It differentiates horizontal structures of this kind based on requirements for stability in a context of growing aggregate production vis‐à‐vis wages and effort. The analysis is formulated within a more general perspective that also considers vertical structures. It considers the implications for contemporary policy debates on desirable industrial forms, and concludes with a discussion of factors that might limit the scope for policies intended to promote industrial stability and redistribution via existing production networks.

Suggested Citation

  • Dan Coffey & Philip R. Tomlinson, 2006. "Multiple Facilities, Strategic Splitting And Vertical Structures: Stability, Growth And Distribution Reconsidered," Manchester School, University of Manchester, vol. 74(5), pages 558-576, September.
    • Handle: RePEc:bla:manchs:v:74:y:2006:i:5:p:558-576
    DOI: 10.1111/j.1467-9957.2006.00509.x
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    Cited by:

    1. Stephen P. Dunn, 2012. "John Kenneth Galbraith and the Theory of the Firm," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 8, Edward Elgar Publishing.

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