One literature stream contributes to the analysis of internal structure and organization of divisional companies, studying the functions assigned to headquarters or divisions. Another part of the literature has focused on frontier of the firm issues and the firm's core activities. Few works are in crossing these two traditions. The purpose of this paper is devoted to the pattern of activity within large companies, through the two criteria of decentralization and contracting out. Our goal is to understand whether the determinants are identical for both internal and external boundaries of the firm. This study builds on empirical study dedicated to the publishing industry. Our analysis leads to discuss determinants of internal and external borders. We show that functions or activities with high potential of economies of scale are mainly centralized and internalized. On reverse, those related to core business and non-programmable are mostly at a divisional level and contracted out.
