Examining a key corporate role: The influence of capital allocation competency on business unit performance

• 成果类型: Article
• 署名作者: Arrfelt, Mathias; Wiseman, Robert M.; McNamara, Gerry; Hult, G. Tomas M.
• 署名单位: Arizona State University; Arizona State University-Tempe; Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2264
• 发表日期: 2015
• 页码: 1017-1034
• 关键词: capital allocation competency; overinvestment; corporate effect; corporate strategy; business unit performance

摘要

Research on the role of the corporate office in firm performance has focused on establishing how much performance variance can be attributed to a corporate effect, with little attention devoted to understanding how this influence occurs. In this study, we model capital allocation competency as a dynamic managerial capability and find that lower levels of allocation competency in the form of excess investment to business units with relatively poorer future prospects reduce business unit performance. We also find that market conditions affect performance implications of capital allocationallocation competency is more salient in more competitive markets. These results enhance our understanding of how the corporate office influences business unit performance through its role in allocating capital across business units. Copyright (c) 2014 John Wiley & Sons, Ltd.