Should PLCs Diversify into Related or Unrelated Industries? Evidence from Malaysia

Abstract

The primary issue in diversification strategy is concerning its type. A large body of research on the relative effect of related versus unrelated diversification still remains inconclusive. Scholars have been studying this topic through different research designs and in different contexts, although a greater part of the research was conducted in western economies. Importantly, certain scholars have asserted that powerful conclusions could be produced if product diversification is measured using powerful techniques and performance is assessed through combination of objective and subjective measures. This research builds up on that suggestion and revisits the subject using a sample of Malaysian PLCs as Malaysia has always been characterised by proliferation of diversified companies. This is also imperative keeping in view the challenges confronted by Malaysian economy in recent years and the significant repercussions of selecting type of diversification by Malaysian corporate sector. This study was conducted for multi-business PLCs listed on Main Market of Bursa Malaysia. T-tests based on 123 diversified PLCs revealed that related diversifiers outperformed unrelated diversifiers on

A Moderated Model for the Effect of Human Resource Management Strategy on Organizational Outcomes

“…Organizational performance represents an organization’s effectiveness. Performance is normally defined in terms of financial and non-financial components which are related to the extent to which an organization achieves its goals and objectives (Mehmood & Hilman, 2015; Sriviboon & Jermsittiparsert, 2019). To exemplify, an organization’s productivity, market growth and sales growth are its financial components.…”

Synchronization in Strategic Planning: A Roadmapping Framework

“…Previous research papers have highlighted that synchronization in strategic planning is bene¯cial for companies with related businesses rather than those with unrelated businesses [David (2011); Gupta et al (2007); Mehmood and Hilman (2015)]. Synchronization allows related multi-business¯rms to achieve competitive Fig.…”

“…Moreover, having taken into consideration that related multi-business companies can bene¯t from synchronization in strategic planning more than unrelated multibusiness companies [David (2011); Gupta et al (2007); Mehmood and Hilman (2015)], this research focuses on related multi-business companies with multiple business units.…”

Do CEO Overconfidence and International Diversification Strategy affect the Capital Structure of Shariah Compliant Companies?

“…Besides, the incentives given by the Malaysia's government has surged Malaysian firms to engage in the diversification strategies. Mehmood and Hilman (2015) reported that there were more than 70 percent of public listed firms on the main market of Bursa Malaysia from 2010 to 2012 engaging in diversification strategies. In term of corporate strategic financial policy, firm's diversification strategies are predicted to affect the decision in firm's capital structure (Hamyat, Sarita, Hasbudin, & Sujono, 2017).…”