The Performance Effects of Diversification in the Context of Its Decline: A Meta-Analytical Review

Abstract

We study changes in the performance effects of declining levels of diversification over time. Using results from two meta-analytical approaches (MARA and HOMA), we contribute to literature by arguing that the pressure to reduce diversification has affected those firms particularly strongly whose diversification strategies were most detrimental to firm performance.

Business groups and the study of international business: A Coasean synthesis and extension

“…Research on US conglomerates suggests that very large and highly diversified unitary corporations have high hierarchy transaction costs (Williamson, 1967;Daley, Mehrotra, & Sivakumar, 1997;Rajan, Servaes, & Zingales, 2000;Richter, Schommer, & Karna, 2017). Might BGs consisting of multiple distinct firms incur lower hierarchy transaction costs than unitary conglomerates?…”

Strategic integration of manufacturing organizations

“…Moreover, an integrated organisation can sense, through its supportive supply chain network, current or future threats in its external environment. For example, an integrated manufacturing organisation can promptly sense that its industry will very soon experience a rapid drop in demand and, thus, decide to implement related or conglomerate (unrelated) diversification (Richter et al, 2017).…”