Beyond institutional voids: The organizational advantage of business groups
Description
We extend the “institutional voids” perspective on business groups by examining the value-adding potential of two characteristic features of business groups: their diverse portfolios and multi-entity organizational form. We argue that portfolio diversity affords affiliates privileged access to opportunities obscured by incomplete strategic factor markets. We hypothesize that the multi-entity organizational form enables superior sensing and seizing of these growth opportunities by affiliate firms. We further suggest that, in the context of institutional reforms, these characteristics strengthen business group affiliates’ ability to capitalize on the expanded set of opportunities created by reform programs. Empirical analyses based on a sample of Indian firms over the period 1994–2010 support our hypotheses. Implications for theory and directions for future research are discussed. Copyright © 2013 John Wiley & Sons, Ltd.
Copyright Date
January 2011
Publication Date
1-1-2011
Keywords
Strategic management, Business strategy
Conference
Academy of Management Annual Meeting, 12-16 August, 2011, San Antonio, USA
