Firm Diversity: Conceptualization and Measurement

Product diversification strategy and financial performance: meta-analytic evidence on causality and construct multidimensionality

“…Although a substantial number of studies seek to validate measures of diversification (e.g. Acar and Sankaran 1999;Keats 1990;Montgomery 1982;Pitts and Hopkins 1982;Robins and Wiersema 2003;Sambharya 2000;Srivastata et al 1994), we were unable to locate a meta-analytic conceptualization of inter-measure correlations. For this reason, we developed our own conceptualization of the diversification construct and validated it in a preparatory meta-analysis prior to proceeding to the main meta-analysis and hypotheses testing.…”

“…By definition, product diversification is the distribution of firm activities across a number of distinct businesses that are more or less related Pitts and Hopkins 1982;Rumelt 1974). In terms of alternative diversification strategies, empirical researchers usually distinguish between related and unrelated diversification, i.e.…”

“…between spreading activities into similar and into dissimilar businesses. Researchers have operationalized related and unrelated diversification by means of continuous as well as categorical measures; and to each of these have been ascribed specific strengths and weaknesses in terms of content validity, reliability, and ease of computation Ramanujam and Varadarajan 1989;Pitts and Hopkins 1982;Sambharya 2000). Inasmuch as empirical results on the convergent and predictive validity of continuous and categorical measurement schemes are mixed Montgomery 1982), the use of multiple measures is recommended to establish the robustness of research findings (Hoskisson and Hitt 1990;Ramanujam and Varadarajan 1989;Sambharya 2000).…”

Do strategic groups differ in reputation?

“…The number of lines an organization chooses to offer, as well as the relative emphasis placed on each line, reflects strategic choices having many implications (e.g., reduced portfolio risk). A Herfindal index is used to measure the extent of firm diversification across lines of business (Pitts and Hopkins, 1982).…”

International Diversification and Performance: Evidence from Singapore

“…As Pitts and Hopkins (1982) stress, the choice of the measure should be guided by the research question at hand. Diversification should be treated as a continuous variable, rather than a bivariate or developing categories based on arbitrary cutoff points (Ramanujam and Varadarajan, 1989).…”