While effects of public policy are one of the foundations of organizational theory, less explored is how these effects may depend on other external environmental factors. We focus on how policy is a necessary, but not sufficient, condition to understand the growth of banking in the U.S. states, 1896-1978. Three characteristics of banks—simultaneous production and distribution, pooled intra-organizational coordination, and agency relationships—result in a trade-off between centralized and dispersed growth strategies. Which strategy prevails depends on how policy enabling branching interacts with technological, economic, and cultural environments. Our findings contribute to understanding the contingent effects of policy on organizations and the rise of large corporations in the twentieth century.