Drawing on the classic concepts of integration and differentiation from contingency theory, we analyze the impact of influential business unit (BU) executives on the capital resource allocation decisions of the multibusiness firm. Capital resource allocation is one of the most important tasks of the top management team (TMT), yet management scholars have yet to explore the fundamental link between TMT structure and resource reallocation decisions. We hypothesize that greater BU influence within the firm's TMT drives greater reallocation because BU executives are positioned to focus on organizational elements related to differentiation. We also hypothesize contextual factors, based on the multidimensional nature of managerial influence, which act to limit the effect of BU influence. To support this analysis, we develop two unique measures: The first captures the degree of capital reallocation from year to year within the multibusiness firm, and the second measures the relative influence of BU executives. An empirical analysis on the sample of Fortune 1000 firms confirms that BU influence is associated with capital reallocation and that BU influence is moderated by research and development (R&D) intensity and unrelated diversification.

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In the extant innovation literature, the question of how a firm's technological innovation position relates to service innovation has been relatively understudied. While the extant literature finds strong support for technological innovation with respect to product and process, the question of an additional innovation search has received little attention. I seek to advance this area of research by examining factors that influence the technologically innovative product manufacturing firm to innovate in new services. Using data on entry into professional services, I find empirical evidence that platform innovators are more likely to innovate in services than device innovators. Also, as manufacturing firms diversify into non-manufacturing technologies, they will be more likely to innovate in services. The study suggests that a multiproduct-service innovation cycle is a useful complement to the classic product-process innovation model in prior research because it provides insights into a broader range of innovation choices available to the firm.

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