Actions Speak Louder than Modes: Antecedents and Implications of Parent Implementation Capabilities on Business Unit Performance

Strategic Management Journal, Vol. 32, No. 5, pp. 457-485, 2011

29 Pages Posted: 28 Apr 2010 Last revised: 21 Jun 2011

Date Written: May 2011

Abstract

Firm boundaries and strategic execution affect the firm’s ability to generate rents, grow, and survive. Boundaries are determined through governance mode choices, such as whether to make or buy a particular good or activity. While significant work has addressed the performance implications of this fit, less attention has been directed toward strategic execution, or implementation. In particular, the impact of corporate parents has been understudied. We suggest that parent-level implementation capabilities of operating expertise gained through related experience and coordination from collocation combine with governance mode choices to jointly affect performance. By employing theories of organizational economics and testing predictions in casual dining chains, this paper unpacks the relationship between implementation, governance mode choice, and performance. Our findings suggest that parent capabilities may be more important than mode choice fit and that parent benefits are contingent upon mode choice and type of performance.

Suggested Citation

Parmigiani, Anne E. and Holloway, Sam S., Actions Speak Louder than Modes: Antecedents and Implications of Parent Implementation Capabilities on Business Unit Performance (May 2011). Strategic Management Journal, Vol. 32, No. 5, pp. 457-485, 2011, Available at SSRN: https://ssrn.com/abstract=1597317

Anne E. Parmigiani (Contact Author)

University of Oregon ( email )

1280 University of Oregon
Eugene, OR 97403
United States

Sam S. Holloway

University of Portland ( email )

Portland, OR 97203
United States

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