The study investigates conglomerate capital resource allocation. A prescriptive model of resource allocation within conglomerate internal capital markets, based upon Oliver Williamson's theory of internal capital markets and the normative literatures of Management and Economics, is first presented. Discrepancies between the model and the research literature are identified.;Results of empirical research investigating corporate strategies and policies for allocating capital within 12 Fortune 500-sized unrelated diversified corporations, and the extent to which conglomerate internal capital markets exist are reported and discussed. A number of post-research hypotheses about variables believed to be positively and negatively associated with the three components of internal capital markets, central resource allocation, use of dominant uniform economic criteria, and interunit competition for funds, are presented.;A descriptive model of conglomerate resource allocation, based upon the reported research and research literature, is then developed. Differences between the prescriptive and descriptive models are identified and discussed, including implications for internal capital market theory and conglomerate research. Modifications and contributions to theory are proposed.
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