ABSTRACTThis article examines the proposition that the multidivisional structure is determined by both power and efficiency imperatives. It is theorized that combining the coalitional power and information‐processing perspectives of organizational choice enables us to explain and predict organizational form. The theory is tested on 291 Fortune 500 firms. The results largely confirm theoretical expectations. It is submitted that the multidivisional paradigm illustrates the central premises of the article: (1) a synthesis of efficiency and power perspectives is a viable research programme; and (2) theoretical pluralism increases empirical content and should be valued by those concerned with progress in the emerging field of strategic managemen