Premium
Manufacturing‐based relatedness, synergy, and coordination
Author(s) -
St. John Caron H.,
Harrison Jeffrey S.
Publication year - 1999
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(199902)20:2<129::aid-smj16>3.0.co;2-f
Subject(s) - business , industrial organization , strategic business unit , competitive advantage , unit (ring theory) , value (mathematics) , manufacturing , marketing , operations management , computer science , economics , mathematics , mathematics education , machine learning
This paper explores the basic question of whether manufacturing‐based relatedness between business units within a multibusiness firm serves as a basis for a competitive advantage at the business unit level. We developed a system for describing manufacturing relatedness that combines the study of value chain activities with 4‐digit SIC codes, then we assessed presence of manufacturing synergies. We found no evidence that, on average, organizations involved in manufacturing‐related businesses are reaping financial benefits from shared resources in manufacturing. However, some firms, through explicit commitment to coordination, do realize performance benefits from such involvement. Copyright © 1999 John Wiley & Sons, Ltd.