Interlocking Directorates and Its Strategic Meaning: In Relation to the Complicated Transfiguration of Competitive State
84 , 2017-08-31
The Clayton Act of 1914 prohibited interlocking directorates among competing corporation. But it didn’t condemn the practice in general. In fact after the Clayton Act 1914 the frequency of interlocking directorates suddenly increased. In the same period it was attacked by the reason that it was the root of many evils. However nowadays interlocking directorates has been receiving in the almost corporations and industries. Furthermore it has been receiving public attention that it is most flexible coordination or control. In this paper I try to seek the cause of interlocking directorates and its strategic meaning. My concern in this study is relevant to interdependence between interlocking directorates and 3 types of competition. Steuer argued that the importance of the vertical competition has influence on horizontal competition and interlocking directorates. I think also without consideration for vertical competition a firm’s market power can’t be exactly grasped . I admit for this reason his idea that vertical competition has great roll at horizontal competition. However I think follows that vertical competition does not mean competition theory but bargaining theory. Finally I concluded that interlocking directorates was caused by multidimensional factors and the change of its strategic meanings has relation to drastic environmental change. This suggest Ashby’s theorem “ law of requisite variety ”.