Dominant logic

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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.

Negatively, it is logic which "locks" your thinking into one way of making money and is often used when talking about inefficiency reasons for diversification of a company. 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.