Yamaguchi, ShotaroBraguinsky, SergueyOkazaki, TetsujiYuki, TakenobuUsing detailed plant- and individual-level data from a major Japanese cotton spinning company in the early 20th century, we examine the within-firm allocation of skilled human capital in conjunction with investment in physical capital, accompanying the firm's evolving strategic priorities. We show that the firm leveraged unit-level two-way complementarity between managerial talent and strategically important plants when the task was achieving large-scale output and positioning for a competitive cost advantage. The task of conducting product differentiation, however, ushered in “three-way complementarity,” where educated engineering human capital and capable managers needed to be bundled with specialized physical capital. A deeper dive into the “nano-economics” of resource allocation reveals that educated engineers experiencing product differentiation in pioneering plants were reallocated to other plants also pursuing product differentiation.en-USArticle