Unbundling is a neologism to describe how the ubiquity of mobile devices, Internet connectivity, consumer web technologies, social media and information access in the 21st century is affecting older institutions by “break[ing] up the packages they once offered, providing particular parts of them at a scale and cost unmatchable by the old order.” Unbundling has been called “the great disruptor”.
What is ‘Unbundling’
Unbundling is a process by which a large company with several different lines of business retains one or more core businesses and sells off the remaining assets, product/service lines, divisions or subsidiaries. Unbundling is done for a variety of reasons, but the goal is always to create a better performing company or companies (except in the case of government-forced unbundling).
A company’s board of directors, its managers or regulators may call for unbundling. The board of directors may call for it if the company’s stock is performing poorly and/or the company needs to raise capital or wants to distribute cash to shareholders. Management might call for unbundling if it thinks the result would be a new company that would perform better on its own. Regulators may force unbundling when they perceive a company to have become anticompetitive. When the board or managers calls for unbundling, it often improves the company’s stock price; the opposite tends to happen when regulators call for it.
- Unbundling the corporation – go.gale.com [PDF]
- Unbundling institutions – www.journals.uchicago.edu [PDF]
- Unbundling the institution‐based view of international business strategy – www.oxfordhandbooks.com [PDF]
- Unbundling, public infrastructure financing and access charge regulation in the German rail sector – www.sciencedirect.com [PDF]
- Higher education, unbundling, and the end of the university as we know it – www.tandfonline.com [PDF]
- The unbundling of residential mortgage finance – www.jstor.org [PDF]
- Infrastructure financing with unbundled mechanisms – search.proquest.com [PDF]
- Unbundling management accounting innovations – www.sciencedirect.com [PDF]
- The evolution and future of the BRICS: Unbundling politics from economics – www.sciencedirect.com [PDF]