Abstract

This paper aims to examine whether Taiwan's ten large business groups are moving towards isomorphism. Drawing on the perspective of market and technological determinism, it argues that firms operating in the same market and performing the same technology have a tendency to move towards isomorphism. But given agency theory and the resource-based theory of the firm, firms will pursue diversification growth strategies. As a result, they will operate in multiple markets, and their structures and activities will be channeled through a variety of technological paradigms. Diversity is thus possible. However, from the viewpoint of organizational sociology, this kind of diversification is not a form of organizational diversity but a form of isomorphism in diversification, that is, the extent to which firms pursue diversification is isomorphic with one another. In order to testify this proposition, we develop the notion of isomorphism coefficient for measuring inter-firm differences, using multidimensional scale analysis. The result of our analysis shows that Taiwan's business groups though performing a series of diversification activities over the last twenty years tend to be increasingly evolving in an isomorphic manner.