The M-form structure is designed to create checks and balances for managers that increase the probability that a diversified firm will be managed in ways consistent with the interests of its equity holders.

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The M-form structure, which stands for multidivisional form, is designed to decentralize decision-making power and create checks and balances for managers to ensure that the different divisions of a diversified firm are managed in ways consistent with the interests of its equity holders. This structure separates the firm into different business units or divisions, each with their own manager responsible for their unit's operations and profitability. Overall, the M-form structure aims to increase efficiency and accountability while reducing the risks associated with centralization.

The M-Form Structure Is Designed to Create Checks and Balances