Over the last 20 years, strategy scholars have explored the relative influence of industry and corporate effects on business segment performance. The present research acknowledges the inherent multilevel, cross-classified nature of the data and demonstrates that results are not robust to statistical method. Using 1995-99 data from 'operating segments,' the multilevel analysis presented in this article found that (1) business segment effects explain twice as much variance in business segment performance as do corporate effects, (2) corporate effects explain almost four times more variance in business segment performance than industry effects, and (3) segments explain almost eight times more variation than industry effects. Methodologically, multilevel analysis offers statistical advantages over variance components analysis, nested ANOVA, and two-stage least squares. More importantly, the method provides a means for modeling relationships between the industry, corporation, and business segments, thereby moving beyond the descriptive nature of explained variance.
Some strategies for mitigating ordering inefficiencies in supply chains advise sharing information among decision‐makers. However, there has been little consideration of how individual perceptions intervene in the use of available information in decision‐making processes. This article reports the results of an experiment in which participants were instructed to minimize inventory holding and backlog costs for their supply chains as a whole. The analysis suggests that additional information affects supply chain inventory management costs only when rational decision‐making processes are followed. Decreased costs are observed when rational decision‐making is applied with backlog information. In contrast, increased costs are observed when consumer demand information is available.
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