Does it Pay to Orchestrate Resources Beyond the Firm?

We evaluate 217 global manufacturing firm ecosystems in an effort to explicate the extent to which performance heterogeneity across firms can be attributed to orchestrating resources either within and/or beyond the firm. Utilizing a multilevel Multiple Membership Multiple Classification (MMMC) model, we find that the focal firm alone accounts for nearly 20% of the performance heterogeneity across firms, while the focal firm’s specific suppliers and customers account for another nearly 50% of performance differences across firms. While much of the performance heterogeneity across firms seemingly stems from differences across external resources, our results suggest that a firm’s operations strategy guides the orchestration of both its internal and external resources to support its processes and create value for its stakeholders.