IBS Lunchtime Research Seminar - The Dark Side of Relatedness: Resource Characteristics, Hierarchical Failure, and Diversification Outcomes

You are cordially invited to attend an International Business and Strategy Departmental Research Meeting, during which there will be a presentation by Niklas Lindlbauer, Kings College London. A reminder that attendance for IBS (full time, research oriented) staff and full-time students is compulsory, and where possible, must be in person. Individuals unable to attend in person, due to legitimate reasons will be provided a Teams link on request. Non-IBS staff are welcome to attend. If you have not received the email invite please email Angie Clark

Please join us in Room 108, Henley Business School.

Please make sure you let me know in advance if you intend to attend in person so that the correct amount of catering is booked.

Date: Wednesday 28th January 2026, HBS Room 108

Time: 13.00 - 14.30

Abstract:

Diversification is one of the most heavily researched subjects in strategy research. The dominant view in strategy is that diversification emerges because of market failures associated with trading flexible firm resources that are in excess. However, this view is incomplete, as it does not consider that the reasons resources may give rise to market failure are also the reasons they may cause hierarchical failure. A symmetric theory requires a comparative-institutional framework that considers the costs of internal governance of resources. While flexible resources are linked to value-creating related diversification, they also impose costs when they are difficult to measure, monitor, and control in use (i.e., their use involves asymmetric information). This means that it is difficult to set transfer prices and that their use may be subject to strategic behaviors. Thus, related diversification based on such resources has a “dark side”—the hierarchical failure associated with flexible resources—which may help to explain the inconclusive findings of diversification-performance research. We theorize the hierarchical failure associated with flexible resources, examine the comparative-institutional implications of such failure in terms of the scope of diversification, and discuss how firms can deploy internal governance mechanisms that reduce the dark side of diversification.

Speaker Bio: Niklas Lindlbauer is an Assistant Professor in Strategic Management at King's College London and a Research Associate at the University of Cambridge, where he also obtained his PhD. His research focuses on corporate strategy and strategic change. Specifically, he studies how diversified firms use resource allocation and redeployment for the purpose of strategic renewal and technological change. His research has been published in Strategic Management Journal (SMJ) and other leading management journals, and covered by the media, such as by the Financial Times. Both his research and teaching have received multiple competitive awards. Prior to academia, he worked for the strategy consulting firms McKinsey and BCG. He has been a Visiting Scholar at Georgetown University (McDonough School of Business) and Copenhagen Business School