Manufacturing-based relatedness, synergy, and coordination

Caron H. St. John; Jeffrey S. Harrison

doi:10.1002/(sici)1097-0266(199902)20:2<129::aid-smj16>3.3.co;2-6

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Manufacturing-based relatedness, synergy, and coordination

Caron H. St. John¹; Jeffrey S. Harrison²

¹ Clemson University · ² University of Central Florida

Strategic Management Journal 1999

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.

DOI: 10.1002/(sici)1097-0266(199902)20:2<129::aid-smj16>3.3.co;2-6
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