Explaining organizational diversity in emerging industries: The role of capabilities

Abstract

Is any firm able to internalize any transaction at any time? What explains changes in the vertical coordination strategy adopted by firms through time in a context of institutional and technological stability? This paper uses the example of an emerging wine region, the state of Missouri, to discuss the sources of organizational diversity. We analyse ten case studies of Missouri wineries to investigate the reasons why different organizational strategies are chosen by each firm. This outcome is observed although their managers have similar perceptions when it comes to optimal organizational choices. The fundamental idea developed in this paper is that organizational alignment is based not only on the characteristics of transactions and governance structures, but also on the features of the capabilities and resources owned by economic agents. Two main objectives are accomplished in this work: (1) a set of theoretical propositions is offered, providing a conceptual framework that can be used in other contexts; (2) the conclusions drawn here are compared with other contributions dealing with potentially related phenomena, such as the so-called plural forms.