Skip to main content
SpringerLink
Log in

Business group affiliation and competitive repertoire

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

We connect business group research with literature on competitive repertoire—a firm’s portfolio of actions that characterize its strategy—to examine the influence of business group affiliation on firm strategy. We theorize that access to a larger stock and a broad range of resources, both within the firm and through the business group network, enables affiliate firms to execute a higher number (competitive repertoire intensity) and a wider variety (competitive repertoire complexity) of competitive actions. Our analysis of a sample of Indian firms during 2009–2017 supports our hypotheses. In supplementary analyses, we find that business group characteristics—size and affiliate intra-group position—positively influence competitive repertoire. We also find that competitive repertoire intensity mediates affiliation-firm performance relationship. Our findings enhance our understanding of business groups by establishing the link between affiliation-firm strategy-performance. Our work also extends research on network-based and ownership-based antecedents of competitive repertoire. We discuss these implications in detail.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. In Model 2, the regression coefficient β on B.G. affiliation dummy is 0.76. This suggests an increase by 2.14 (e 0.76) times in the value of dependent variable when the B.G. affiliation dummy is 1.

  2. We thank one of the reviewers for suggesting this line of analysis.

  3. We thank one of the reviewers for motivating us to think along these lines.

References

  • Andrevski, G., & Ferrier, W. J. (2019). Does it pay to compete aggressively? Contingent roles of internal and external resources. Journal of Management, 45(2), 620–644

    Article  Google Scholar 

  • Andrevski, G., Brass, D. J., & Ferrier, W. J. (2016). Alliance portfolio configurations and competitive action frequency. Journal of Management, 42(4), 811–837

    Article  Google Scholar 

  • Andrevski, G., Richard, O. C., Shaw, J. D., & Ferrier, W. J. (2014). Racial diversity and firm performance: The mediating role of competitive intensity. Journal of Management, 40(3), 820–844

    Article  Google Scholar 

  • Ashwin, A. S., Krishnan, R. T., & George, R. (2015). Family firms in India: Family involvement, innovation and agency and stewardship behaviors. Asia Pacific Journal of Management, 32(4), 869–900

    Article  Google Scholar 

  • Ayyagari, M., Dau, L. A., & Spencer, J. (2015). Strategic responses to FDI in emerging markets: Are core members more responsive than peripheral members of business groups? Academy of Management Journal, 58(6), 1869–1894

    Article  Google Scholar 

  • Ballinger, G. A. (2004). Using generalized estimating equations for longitudinal data analysis. Organizational Research Methods, 7(2), 127–150

    Article  Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120

    Article  Google Scholar 

  • Barney, J. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27(6), 643–650

    Article  Google Scholar 

  • Basdeo, D. K., Smith, K. G., Grimm, C. M., Rindova, V. P., & Derfus, P. J. (2006). The impact of market actions on firm reputation. Strategic Management Journal, 27(12), 1205–1219

    Article  Google Scholar 

  • Bowman, E. H., & Helfat, C. E. (2001). Does corporate strategy matter? Strategic Management Journal, 22(1), 1–23

    Article  Google Scholar 

  • Boyd, B. K. (1995). CEO duality and firm performance: A contingency model. Strategic Management Journal, 16(4), 301–312

    Article  Google Scholar 

  • Campbell, A., & Goold, M. (1995). Corporate strategy: The quest for parenting advantage. Harvard Business Review, 73(2), 120–132

    Google Scholar 

  • Carnes, C. M., Xu, K., Sirmon, D. G., & Karadag, R. (2019). How competitive action mediates the resource slack–performance relationship: A meta-analytic approach. Journal of Management Studies, 56(1), 57–90

    Article  Google Scholar 

  • Carney, M., Gedajlovic, E. R., Heugens, P. P., Van Essen, M., & Van Oosterhout, J. H. (2011). Business group affiliation, performance, context, and strategy: A meta-analysis. Academy of Management Journal, 54(3), 437–460

    Article  Google Scholar 

  • Carney, M., Van Essen, M., Estrin, S., & Shapiro, D. (2018). Business groups reconsidered: beyond paragons and parasites. Academy of Management Perspectives, 32(4), 493–516

    Article  Google Scholar 

  • Certo, S. T., & Semadeni, M. (2006). Strategy research and panel data: Evidence and implications. Journal of Management, 32(3), 449–471

    Article  Google Scholar 

  • Chang, S. J., & Hong, J. (2000). Economic performance of group-affiliated companies in Korea: Intragroup resource sharing and internal business transactions. Academy of Management Journal, 43(3), 429–448

    Article  Google Scholar 

  • Chang, S. J., & Singh, H. (2000). Corporate and industry effects on business unit competitive position. Strategic Management Journal, 21(7), 739–752

    Article  Google Scholar 

  • Chattopadhyay, S., & Bercovitz, J. (2020). When one door closes, another door opens… for some: Evidence from the post-TRIPS Indian pharmaceutical industry. Strategic Management Journal, 41(6), 988–1022

    Article  Google Scholar 

  • Chin, M. K., & Semadeni, M. (2017). CEO political ideologies and pay egalitarianism within top management teams. Strategic Management Journal, 38(8), 1608–1625

    Article  Google Scholar 

  • Chen, M. J. (2009). Competitive dynamics research: An insider’s odyssey. Asia Pacific Journal of Management, 26(1), 5–25

    Article  Google Scholar 

  • Chen, M. J., & Miller, D. (2012). Competitive dynamics: Themes, trends, and a prospective research platform. Academy of Management Annals, 6(1), 135–210

    Article  Google Scholar 

  • Chittoor, R., Kale, P., & Puranam, P. (2015). Business groups in developing capital markets: Towards a complementarity perspective. Strategic Management Journal, 36(9), 1277–1296

    Article  Google Scholar 

  • Colli, A., & Colpan, A. M. (2016). Business groups and corporate governance: review, synthesis, and extension. Corporate Governance: An International Review, 24(3), 274–302

    Article  Google Scholar 

  • Colpan, A. M., & Hikino, T. (2018). Business Groups in the West: Origins, Evolution, and Resilience. Oxford University Press

  • Colpan, A. M., Hikino, T., & Lincoln, J. R. (2010). Introduction. In A. M. Coplan, T. Hikino, & J. R. Lincoln (Eds.), The Oxford Handbook of Business Groups (pp. 1–14). Oxford, UK: Oxford University Press

    Chapter  Google Scholar 

  • Connelly, B. L., Tihanyi, L., Certo, S. T., & Hitt, M. A. (2010). Marching to the beat of different drummers: The influence of institutional owners on competitive actions. Academy of Management Journal, 53(4), 723–742

    Article  Google Scholar 

  • Connelly, B. L., Tihanyi, L., Ketchen, D. J., Carnes, C. M., & Ferrier, W. J. (2017). Competitive repertoire complexity: Governance antecedents and performance outcomes. Strategic Management Journal, 38(5), 1151–1173

    Article  Google Scholar 

  • Connelly, B. L., Lee, K. B., Tihanyi, L., Certo, S. T., & Johnson, J. L. (2019). Something in common: Competitive dissimilarity and performance of rivals with common shareholders. Academy of Management Journal, 62(1), 1–21

    Article  Google Scholar 

  • Cuervo-Cazurra, A. (2006). Business groups and their types. Asia Pacific Journal of Management, 23(4), 419–437

    Article  Google Scholar 

  • Derfus, P. J., Maggitti, P. G., Grimm, C. M., & Smith, K. G. (2008). The Red Queen effect: Competitive actions and firm performance. Academy of Management Journal, 51(1), 61–80

    Article  Google Scholar 

  • Elango, B., & Pattnaik, C. (2007). Building capabilities for international operations through networks: a study of Indian firms. Journal of International Business Btudies, 38(4), 541–555

    Article  Google Scholar 

  • Ferrier, W. J. (2001). Navigating the competitive landscape: The drivers and consequences of competitive aggressiveness. Academy of Management Journal, 44(4), 858–877

    Article  Google Scholar 

  • Ferrier, W. J., & Lee, H. (2002). Strategic aggressiveness, variation, and surprise: How the sequential pattern of competitive rivalry influences stock market returns. Journal of Managerial Issues, 14(2), 162–180

    Google Scholar 

  • Ferrier, W. J., & Lyon, D. W. (2004). Competitive repertoire simplicity and firm performance: The moderating role of top management team heterogeneity. Managerial and Decision Economics, 25(6–7), 317–327

    Article  Google Scholar 

  • Ferrier, W. J., Smith, K. G., & Grimm, C. M. (1999). The role of competitive action in market share erosion and industry dethronement: A study of industry leaders and challengers. Academy of Management Journal, 42(4), 372–388

    Article  Google Scholar 

  • Fombrun, C., & Shanley, M. (1990). What’s in a name? Reputation building and corporate strategy. Academy of Management Journal, 33(2), 233–258

    Article  Google Scholar 

  • Gaur, A. S., & Kumar, V. (2009). International diversification, business group affiliation and firm performance: Empirical evidence from India. British Journal of Management, 20(2), 172–186

    Article  Google Scholar 

  • George, R., & Kabir, R. (2012). Heterogeneity in business groups and the corporate diversification–firm performance relationship. Journal of Business Research, 65(3), 412–420

    Article  Google Scholar 

  • Giachetti, C. (2016). Competing in emerging markets: Performance implications of competitive aggressiveness. Management International Review, 56(3), 325–352

    Article  Google Scholar 

  • Gnyawali, D. R., Offstein, E. H., & Lau, R. S. (2008). The impact of the CEO pay gap on firm competitive behavior. Group & Organization Management, 33(4), 453–484

    Article  Google Scholar 

  • Gnyawali, D. R., & Madhavan, R. (2001). Cooperative networks and competitive dynamics: A structural embeddedness perspective. Academy of Management Review, 26(3), 431–445

    Article  Google Scholar 

  • Gnyawali, D. R., He, J., & Madhavan, R. (2006). Impact of co-opetition on firm competitive behavior: An empirical examination. Journal of Management, 32(4), 507–530

    Article  Google Scholar 

  • Gopal, S., Manikandan, K. S., & Ramachandran, J. (2021). Are there limits to diversification in emerging economies? Distinguishing between firm-level and business group strategies. Journal of Management Studies, 58(6), 1532–1568

    Article  Google Scholar 

  • Gubbi, S. R., Aulakh, P. S., & Ray, S. (2015). International search behavior of business group affiliated firms: Scope of institutional changes and intragroup heterogeneity. Organization Science, 26(5), 1485–1501

    Article  Google Scholar 

  • Guillen, M. F. (2000). Business groups in emerging economies: A resource-based view. Academy of Management Journal, 43(3), 362–380

    Article  Google Scholar 

  • Gulati, R., Nohria, N., & Zaheer, A. (2000). Strategic networks. Strategic Management Journal, 21(3), 203–215

    Article  Google Scholar 

  • Haleblian, J., McNamara, G., Kolev, K., & Dykes, B. J. (2012). Exploring firm characteristics that differentiate leaders from followers in industry merger waves: A competitive dynamics perspective. Strategic Management Journal, 33(9), 1037–1052

    Article  Google Scholar 

  • Hansen, M. H., Perry, L. T., & Reese, C. S. (2004). A Bayesian operationalization of the resource-based view. Strategic Management Journal, 25(13), 1279–1295

    Article  Google Scholar 

  • Holmes, R. M. Jr., Hoskisson, R. E., Kim, H., Wan, W. P., & Holcomb, T. R. (2016). International strategy and business groups: A review and future research agenda. Journal of World Business, 53(2), 134–150

    Article  Google Scholar 

  • Hughes-Morgan, M., & Ferrier, W. J. (2017). ‘Short interest pressure’ and competitive behaviour. British Journal of Management, 28(1), 120–134

    Article  Google Scholar 

  • Hughes-Morgan, M., Ferrier, W. J., & Labianca, G. (2011). The joint effect of the top management team heterogeneity and competitive behavior on stock returns and risk. In Carpenter, M.A. & Weikel, M.K. (Eds.), The handbook of research on top management teams (pp. 261–283)

  • Hughes-Morgan, M., Kolev, K., & Mcnamara, G. (2018). A meta-analytic review of competitive aggressiveness research. Journal of Business Research, 85, 73–82

    Article  Google Scholar 

  • India Business Insight (2020). http://indiabusinessinsight.com/ibi/aboutIbid/, Accessed June 9, 2020

  • Kenny, D. A., Kashy, D. A., & Bolger, N. (1998). Data analysis in social psychology. In D. Gilbert, S. Fiske, & G. Lindzey (Eds.), The handbook of social psychology (pp. 233–265)

  • Khanna, T., & Palepu, K. (1997). Why focused strategies may be wrong for emerging markets. Harvard Business Review, 75(4), 41–48

    Google Scholar 

  • Khanna, T., & Palepu, K. (2000). Is group affiliation profitable in emerging markets? An analysis of diversified Indian business groups. The Journal of Finance, 55(2), 867–891

    Article  Google Scholar 

  • Ketchen Jr, D. J., Hult, G. T. M., & Slater, S. F. (2007). Toward greater understanding of market orientation and the resource?based view. Strategic Management Journal, 28(9), 961–964

  • Kraaijenbrink, J., Spender, J. C., & Groen, A. J. (2010). The resource-based view: A review and assessment of its critiques. Journal of Management, 36(1), 349–372

  • Lamin, A. (2013). Business groups as information resource: An investigation of business group affiliation in the Indian software services industry. Academy of Management Journal, 56(5), 1487–1509

    Article  Google Scholar 

  • Lavie, D. (2006). The competitive advantage of interconnected firms: An extension of the resource-based view. Academy of Management Review, 31(3), 638–658

    Article  Google Scholar 

  • Liang, K. Y., & Zeger, S. L. (1986). 1. Longitudinal data analysis using generalized linear models. Biometrika, 73(1):3–22

  • Lim, E. (2019). Attainment discrepancy and new geographic market entry: The moderating roles of vertical pay disparity and horizontal pay dispersion. Journal of Management Studies, 56(8), 1605–1629

    Article  Google Scholar 

  • Luo, X., & Chung, C. N. (2005). Keeping it all in the family: The role of particularistic relationships in business group performance during institutional transition. Administrative Science Quarterly, 50(3), 404–439

    Article  Google Scholar 

  • Ma, X., & Lu, J. W. (2017). Business group affiliation as institutional linkages in China’s emerging economy: A focus on organizational traits and institutional conditions. Asia Pacific Journal of Management, 34(3), 675–697

    Article  Google Scholar 

  • MacKinnon, D. P., Lockwood, C. M., & Williams, J. (2004). Confidence limits for the indirect effect: Distribution of the product and resampling methods. Multivariate Behavioral Research, 39(1), 99–128

    Article  Google Scholar 

  • McGrath, R. G., Chen, M. J., & MacMillan, I. C. (1998). Multimarket maneuvering in uncertain spheres of influence: Resource diversion strategies. Academy of Management Review, 23(4), 724–740

    Article  Google Scholar 

  • Majumdar, S. K., & Bhattacharjee, A. (2014). Firms, markets, and the state: Institutional change and manufacturing sector profitability variances in India. Organization Science, 25(2), 509–528

    Article  Google Scholar 

  • Manikandan, K. S., & Ramachandran, J. (2015). Beyond institutional voids: Business groups, incomplete markets, and organizational form. Strategic Management Journal, 36(4), 598–617

    Article  Google Scholar 

  • McGee, J., & Thomas, H. (1986). Strategic groups: theory, research and taxonomy. Strategic Management Journal, 7(2), 141–160

    Article  Google Scholar 

  • Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman, H. J. Jr. (1978). Organizational strategy, structure, and process. Academy of Management Review, 3(3), 546–562

    Article  Google Scholar 

  • Mintzberg, H. (1978). Patterns in strategy formation. Management Science, 24(9), 934–948

    Article  Google Scholar 

  • Mishra, S., & Suar, D. (2010). Does corporate social responsibility influence firm performance of Indian companies? Journal of Business Ethics, 95(4), 571–601

    Article  Google Scholar 

  • Mukherjee, D., Makarius, E. E., & Stevens, C. E. (2018). Business group reputation and affiliates’ internationalization strategies. Journal of World Business, 53(2), 93–103

    Article  Google Scholar 

  • Ndofor, H. A., Sirmon, D. G., & He, X. (2011). Firm resources, competitive actions and performance: investigating a mediated model with evidence from the in-vitro diagnostics industry. Strategic Management Journal, 32(6), 640–657

    Article  Google Scholar 

  • Nikolaev, B., Shir, N., & Wiklund, J. (2020). Dispositional positive and negative affect and self-employment transitions: The mediating role of job satisfaction. Entrepreneurship Theory and Practice, 44(3), 451–474

    Article  Google Scholar 

  • Offstein, E. H., Gnyawali, D. R., & Cobb, A. T. (2005). A strategic human resource perspective of firm competitive behavior. Human Resource Management Review, 15(4), 305–318

    Article  Google Scholar 

  • Pant, A., & Ramachandran, J. (2012). Legitimacy beyond borders: Indian software services firms in the United States, 1984 to 2004. Global Strategy Journal, 2(3), 224–243

    Article  Google Scholar 

  • Park, K. M., Jung, K., & Noh, K. C. (2014). Strategic action and customer mobility: Antecedents and consequences of strategic actions in the Korean mobile telecommunication service industry. Asia Pacific Journal of Management, 31(1), 171–193

    Article  Google Scholar 

  • Pattnaik, C., Chang, J. J., & Shin, H. H. (2013). Business groups and corporate transparency in emerging markets: Empirical evidence from India. Asia Pacific Journal of Management, 30(4), 987–1004

    Article  Google Scholar 

  • Pattnaik, C., Lu, Q., & Gaur, A. S. (2018). Group affiliation and entry barriers: The dark side of business groups in emerging markets. Journal of Business Ethics, 153(4), 1051–1066

    Article  Google Scholar 

  • Penrose, E. T. (1959). The theory of the growth of the firm. New York: Sharpe

    Google Scholar 

  • Perreault, W. D. Jr., & Leigh, L. E. (1989). Reliability of nominal data based on qualitative judgments. Journal of Marketing Research, 26(2), 135–148

    Article  Google Scholar 

  • Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press

    Google Scholar 

  • Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3), 879–891

    Article  Google Scholar 

  • Preacher, K. J., & Selig, J. P. (2012). Advantages of Monte Carlo confidence intervals for indirect effects. Communication Methods and Measures, 6(2), 77–98

    Article  Google Scholar 

  • Purkayastha, A., Pattnaik, C., & Pathak, A. A. (2022). Agency conflict in diversified business groups and performance of affiliated firms in India: Contingent effect of external constraint and internal governance. European Management Journal, 40(2), 283–294

    Article  Google Scholar 

  • Purkayastha, S., Kumar, V., & Lu, J. W. (2017). Business group heterogeneity and the internationalization-performance relationship: Evidence from Indian business groups. Asia Pacific Journal of Management, 34(2), 247–279

    Article  Google Scholar 

  • Ramachandran, J., Manikandan, K. S., & Pant, A. (2013). Why conglomerates thrive (outside the US). Harvard Business Review, 91, 110–119

    Google Scholar 

  • Ramachandran, J., Pant, A., & Pani, S. K. (2012). Building the BoP producer ecosystem: The evolving engagement of Fabindia with Indian handloom artisans. Journal of Product Innovation Management, 29(1), 33–51

    Article  Google Scholar 

  • Ramaswamy, K., Purkayastha, S., & Petitt, B. S. (2017). How do institutional transitions impact the efficacy of related and unrelated diversification strategies used by business groups? Journal of Business Research, 72, 1–13

    Article  Google Scholar 

  • Shukla, D. M., Mital, A., Qureshi, I., & Wang, T. (2020). Valuation effects of alliance portfolio expansion speed and strength: Evidence from high-tech firms. Journal of Business Research, 113, 370–383

    Article  Google Scholar 

  • Siegel, J., & Choudhury, P. (2012). A reexamination of tunneling and business groups: New data and new methods. The Review of Financial Studies, 25(6), 1763–1798

    Article  Google Scholar 

  • Vissa, B., Greve, H. R., & Chen, W. R. (2010). Business group affiliation and firm search behavior in India: Responsiveness and focus of attention. Organization Science, 21(3), 696–712

    Article  Google Scholar 

  • Yang, W., & Meyer, K. E. (2015). Competitive dynamics in an emerging economy: Competitive pressures, resources, and the speed of action. Journal of Business Research, 68(6), 1176–1185

    Article  Google Scholar 

  • Yiu, D. W., Lu, Y., Bruton, G. D., & Hoskisson, R. E. (2007). Business groups: An integrated model to focus future research. Journal of Management Studies, 44(8), 1551–1579

    Article  Google Scholar 

  • Yu, T., & Cannella, A. A. (2007). Rivalry between multi-national enterprises: An event history approach. Academy of Management Journal, 50(3), 665–686

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Larsen & Toubro Limited, Minerals and Metals SBG, Kokata, India

    T V Arun Kumar

  2. Indian Institute of Management Tiruchirappalli, Pudukottai Main Road, 620 024, Tiruchirappalli, Tamil Nadu, India

    K S Manikandan

Authors
  1. T V Arun Kumar
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. K S Manikandan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to K S Manikandan.

Additional information

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Arun Kumar, T., Manikandan, K.S. Business group affiliation and competitive repertoire. Asia Pac J Manag (2022). https://doi.org/10.1007/s10490-022-09855-4

Download citation

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s10490-022-09855-4

Keywords

Search

Navigation