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| Abstract |
The results show that the more closely LB is aligned with its parent's dominant logic-that is, the more congruent it is-the better it performs and the lower its costs relative to competitor LBs in the focal LB's industry. Improved performance and cost are not found when a LB is embedded within similar two-digit standard industrial codes (SICs) as those of other LBs within its parent's portfolio. Even though the SIC classification system has been used as a measure of 'output' relatedness based on similarity of product and customer market characteristics, the results suggest that resource congruence (and resource-based views of the firm) are better predictor of synergies and competitive advantage at the business level than is output relatedness. We also suggest that theories of managerial capability, dominant logic, and monitoring can explain our discovery of spillover and congruence effects that are not explained by economies of scope or resource sharing-based explanations alone. Copyright © 2004 John Wiley & Sons, Ltd.
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| Publisher Info |
Volume (Year): 25 (2004)
Issue (Month): 6-7 ()
Pages: 365-381
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