Dominant logic is a term that is used to identify the combination of beliefs and practices that a company employs as a means of earning a profit and achieving success. Within this context, the cultural norms of a company, along with the way that company leaders think and formulate the goals and the processes that govern the function of the business play a major role in how the business logically moves toward being successful. Periodically assessing the dominant logic within a company culture can provide important clues regarding the future prospects of that business, as well as sometimes leading to shifts in company thinking that improve those chances for success.
There are a number of benefits associated with the examination of dominant logic as it exists within a given company. By investigating and understanding the thought processes that prevail within a business culture, it is possible to gain insights into why certain policies and procedures are in place. Consideration of dominant logic also makes it easier to determine how efficiently current processes are serving the business, especially in terms of helping the company to be financially successful and achieve other stated goals.
It is important to note that the dominant logic of a company may be productive or unproductive. When the company’s thinking allows some room for exploring new ways of doing old tasks or at least acknowledges that there may be several different ways to pursue goals that are equally valid, then it can be said that the logic of the business is positive and likely to allow for a flexibility in thought that allows the business to change with the times. Alternatively, if the thought processes of the business are somewhat narrow and tend to not change over time, then there is a good chance that the ability of that company to grow will be severely stunted.
Applying the general concept of dominant logic outside the walls of a company can also be helpful. For example, if a business is thinking of entering new markets by purchasing other companies as a way to gain a presence on those markets, taking the time to explore the thinking of those targeted companies in terms of goals, aims, and processes can aid in determining if the two corporate cultures can be successfully merged into one. Taking the time to do this can minimize the problems that inevitably occur when a company comes under new leadership, since it is possible to come up with an integration plan that causes as little disruption for either party as possible.