The combined diversification breadth and mode dimensions and the performance of large diversified firms | Zendy

Simmonds Paul G. | Zendy

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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.

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