ANOVA for showing that corporate effects are not significant, Rumelt primarily emphasizes his VCA findings. Rumelt argues that"it is only by estimating the variances of effects that relative importance can be assessed. (Rumelt, 1991: 173) Rumelt's results agree with Schmalensee in finding a very small corporate effect and modest industry effect, but Rumelt also finds a strong business effect which in Schmalensee (1985)was part of the error term. Rumelt finds that business effects are much larger than either the corporate or industry effects Rumelt(1991)discusses the small corporate effect as a conundrum. He finds it "surprising to find vanishingly ffects in these data" ne extent of literature on corporate strategy, corporate culture, the number of corporate management consulting firms, and the focus on senior corporate leaders in the business world(Rumelt, 1991: 182). While RumeIt's conclusion is formally based on the size of his estimated variance component, he suggests that corporate strategy may be relatively unimportant for explaining business unit performance In addition to more general concerns about vCA(see Brush bromiley, 1997), the small corporate effect in VCA may come from structural assumptions in Rumelt's(1991) variance components model. He decomposes the total variance of business unit profitability (or)into variance and covariance terms +2C in which o2, is the variance of stable industry effects, o? B is the variance of stable corporate effects, o2, is the variance of the year effect, o is the variance of the business effects, o?,is the variance of transient industry effects, o'e is the variance of transient corporate effects, and