Industry dynamism is a mighty force in the environment that can present an opportunity or a threat to the firm. Despite its apparent importance industry dynamism has been neglected so far in the discussion on the performance of diversified firms. This is likely due to the incomplete understanding of the concept of dynamism and the lack of appropriate measurement methods to capture this multidimensional construct. Both of these central issues are addressed in detail in the course of this research. The study of industry dynamism is of particular relevance today for both, scholars and practitioners. A recent McKinsey study underlines the importance of the concept and reveals: “decision makers in both the private and public sector should expect that uncertainty and volatility will become constant companions.
KeywordsFirm Performance Dynamic Environment Business Unit Dynamic Capability Diversify Firm
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