A Two-Factor Model of Operational Relatedness and Strategic Relatedness
Recall that current research on the performance implications of diversification strategy is characterized by an increasing interest to conceptualize the relatedness construct. New measurement schemes are proposed that indicate relatedness on alternative bases and along multiple dimensions in order to capture a broadest possible range of potentials for synergy (Farjoun, 1994; Markides and Williamson, 1994; Pehrsson, 2006; Robins and Wiersema, 1995; Stimpert and Duhaime, 1997; St. John and Harrison, 1999; Tanriverdi and Venkatraman, 2005). As this line of research is getting increasingly multi-faceted, one may observe that the majority of empirical studies emphasize synergy in terms of economies of scope at the operational level. This happens at the expense of synergy that may be associated with aspects of dominant logic, distinctive competence, and effective management at the corporate, strategic level (Grant, 1988; Prahalad and Bettis, 1986).
KeywordsOperational Relatedness Core Business Diversification Strategy International Diversification Individual Business
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