Dominant logic relates to the main means a company uses to make a profit. In essence, it is an interpretation of how a company has succeeded. It describes the cultural norms and beliefs that the company espouses.
Dominant logic can be useful when applied to corporate diversification. In this sense, dominant logic is a common way of thinking about strategy across different businesses.
Negatively, it is logic which locks a company into thinking about making money in only one way. It is often used when talking about inefficient reasons for diversification of a company. This narrowed approach by a company can prevent a conducive environment for innovating and can stifle creativity. Dominant Logic is antipodal to the idea of using different methods and ways for generating profit. It is similar to the idea of kaizen which focuses on one process.
In the field of strategic management, C. K. Prahalad and Richard A. Bettis first introduced the concept of Dominant Logic in 1986. Prahalad and Bettis suggested that the way top managers deal with the increasing diversity of strategic decisions in a company, which are caused by acquisitions or structural changes in the core business, depends on the cognitive orientation of those top managers. Dominant logic consists of the mental maps developed through experience in the core.
Famous quotes containing the words dominant and/or logic:
“What makes revolutionists is either self-pity, or indignation for the sake of others, or a sympathetic perception of the dominant undercurrent of progress in things. The nature before us is revolutionist from the direct sense of personal worth,... that pride of life, which to the Greek was a heavenly grace.”
—Walter Pater (1839–1894)
“It is the logic of our times,
No subject for immortal verse—
That we who lived by honest dreams
Defend the bad against the worse.”
—Cecil Day Lewis (1904–1972)