Abstract: Both research perspectives of external environment and internal organization were integrated, an internal and external combined analytical framework of impact of environmental uncertainty and organizational capacity bases is constructed, and choice mechanism for business adjustment is explored. Based on the multiple-case study of vertical diversity business adjustments of Bao Steel, Capital Steel, and Tisco, supplemented with ATLAS/ti 5.0, the software for qualitative data analysis, the conclusions are drawn. Results showed that business adjustment was determined by the co-effect of environmental uncertainty and organizational capacitybases; enterprise business adjustment was compelled by technological innovation of downstream industries, socio-economic environment, policies, resource constraint, and competition; capital capacity, technological capacity and managerial capabilities were support conditions for the enterprise business adjustment, which also bound the depth and width of business adjustment.