This conclusion is, of course, consistent with the earlier argument that external control (in this case, from headquarters) pushes an organization toward machine bureaucracy. The point is invariably illustrated when a conglomerate takes over an entrepreneurial company and imposes a lot of bureaucratic systems and standards on its simple structure.
The divisionalized form was created to solve the problem of adaptability in machine bureaucracy. By overlaying another level of administration that could add and subtract divisions, the organization found a way to adapt itself to new conditions and to spread its risk. But there is another side to these arguments. Some evidence suggests that the control systems of these structures discourage risk taking and innovation, that the division head who must justify his or her performance every month is not free to experiment the way the independent entrepreneur is.