By demonstrating how distinctive sets of competencies can contribute to competitive advantage, recent research on the resource-based view of the firm has provided an important new perspective on the drivers of corporate strategy. However, this recent research has yet to address the topic of internal differentiation in resource development. As markets continue to fragment, multi-unit firms find it necessary to develop not one unique set of complimentary competencies but multiple distinct setts of complementary competencies to respond to the demands of different customer segments. This paper develops and tests a model of internal differentiation in resource development in service organizations. The empirical results of the test suggest that alignment between resource development and strategy must be achieved at the segment or business-unit level, not the level of the corporate enterprise.
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