This option enables per-chapter bibliographies. Each chapter must have its own bibliography. If you are using natbib for bibliographies, per-chapter bibliographies can be implemented using the chapterbib package. Please read its documentation carefully, as it requires each chapter to be a separate file. A newer alternative which I highly recommend is to use biblatex for your bibliography, which makes per-chapter bibliographies very simple. If you have per-chapter bibliographies you cannot have a global bibliography.