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The combined diversification breadth and mode dimensions and the performance of large diversified firms
Author(s) -
Simmonds Paul G.
Publication year - 1990
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250110506
Subject(s) - diversification (marketing strategy) , mode (computer interface) , business , industrial organization , economic geography , economics , marketing , computer science , operating system
This paper examines the impact of the symbiotic relationship between diversification breadth and mode on firm performance. Seventy‐three Fortune 500 firms were classified by diversification breadth (related/unrelated) and mode (internal/external) and their performance during the period 1975–84 analyzed on four financial performance measures. The two related categories (related‐internal/related‐external) were generally higher performers than the two unrelated categories (unrelated‐internal/unrelated‐external) as hypothesized, but the differences were not significant on most performance measures. The unrelated‐external category appears to be the worst performer, which presents a dilema since this strategy has dominated the conglomerate movement.