Manufacturing-based relatedness, synergy, and coordination
Article Abstract:
Multibusiness companies involved in manufacturing-related businesses were found not to be benefiting from their shared manufacturing resources. Data on more than 6,000 companies with multiple business segments drawn from the Compustat Industry Segment File were used to examine manufacturing synergies and cooperation between specific business units within a particular corporate portfolio. The findings do not support the hypotheses that firms with a pattern of manufacturing-based relatedness would perform better than single-business or multiple-business competitors within the same industry. The results show that diversified companies across the full sample of firms are not achieving performance benefits from having many business units.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1999
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The combined diversification breadth and mode dimensions and the performance of large diversified firms
Article Abstract:
A study examined the effect of the relationship between the extent and method of diversification on the performance of diversified firms. The 73 firms used in the study were members of the Fortune 500 from 1975 through 1984 and maintained the same diversification strategy during that time. Diversification was classified as being related-internal, related-external, unrelated-internal, or unrelated-external. Related-internal and related-external diversification strategies performed better than the unrelated diversification strategies, but there were no significant differences on the majority of performance measures. The unrelated-external strategy, which was used by most conglomerates, appeared to produce the worst performance.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1990
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Diversification strategy and performance in Canadian manufacturing firms
Article Abstract:
C.A. Montgomery's 1985 research on the relationships among diversification, market share, and profitability was re-examined by studying 46 Canadian manufacturing firms. Montgomery concluded that highly diversified companies would have lower market shares than less diversified companies, and that diversification would not increase profitability. The results of the analysis of Montgomery's study supported Montgomery's conclusion that there was a positive relationship between performance and technologically related diversification.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1990
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