From Social Ties to Embedded Competencies: The Case of Business Groups

32 Pages Posted: 2 Apr 2008

See all articles by Pursey P.M.A.R. Heugens

Pursey P.M.A.R. Heugens

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Stelios C. Zyglidopoulos

University of Cambridge - Judge Business School

Date Written: March 31, 2008

Abstract

Our current views of economic competition are still rooted in the imagery of the isolated firm that transacts with its buyers, suppliers, and competitors via largely anonymous factor and product markets. Yet this view is fundamentally at odds with the growing importance of business groups in the global economy. We thus need a reconceptualized version of our idea of economic competition, which is capable of explaining competitive advantage at the group-versus-group rather than firm-versus-firm level of analysis. In the present paper we build on insights derived from organizational sociology and organizational economics to develop a business group-level theory of competition and competitive advantage based on embedded competencies.

Keywords: business groups, business group, embeddedness, competencies, capabilities, RBV, resource-based view, affiliated firms, collective action, stand-alone firms, tunneling, network, profit sharing, profit redistribution, bailing out, bailouts, kinship, family business groups, family business

Suggested Citation

Heugens, Pursey P.M.A.R. and Zyglidopoulos, Stelios C., From Social Ties to Embedded Competencies: The Case of Business Groups (March 31, 2008). Available at SSRN: https://ssrn.com/abstract=1114758 or http://dx.doi.org/10.2139/ssrn.1114758

Pursey P.M.A.R. Heugens (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
0031 10 408 2365 (Phone)
0031 10 408 9012 (Fax)

Stelios C. Zyglidopoulos

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0) 1223 760576 (Phone)
+44 (0) 1223 339701 (Fax)

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