Vertical integration describes a style of management control. Vertically integrated companies are united through a hierarchy with a common owner. Usually each member of the hierarchy produces a different product or (market-specific) service, and the products combine to satisfy a common need. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly, although it might be more appropriate to speak of this as some form of cartel.
Vertical integration refers to
|“||integration of these elements — processes, systems, and people — within management functions, from the department level down through each of the corresponding management functions in the component agencies.||”|
- ↑ Department of Homeland Security: Progress Made in Implementation and Transformation of Management Functions, but More Work Remains, at 15 n.32.
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