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Vertical Disintegration

   Also found in: Wikipedia 0.01 sec.
Vertical Disintegration
The separation of one company into several, with each performing activities leading to a single, finished product. Vertical disintegration occurs generally because diseconomies of scale, which are the result of inefficiency due to large size, make it more advantageous than remaining one corporation.


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Although in a quite different setting, Chen (2005) considers such a strategic effect of outsourcing or vertical disintegration.
This suggests that the growth of operating leases over time is an additional aspect of the vertical disintegration of production.
Although vertical disintegration would have little impact on the downstream market in which television stations and cable operators meet viewers, it has a more dramatic impact on the upstream market in which television stations and cable operators purchase programming from networks and program suppliers.
 
 
 
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