Corporate Strategy Session 3文档.pptVIP

* * * * * * * * * * * * * * * * * * * Session 03 ? Furrer 2002-2008 * 1980 1990 2000 Focused = 95% or more of sales within main industry. Dominant Business = Between 80% and 95% of sales within main industry. Diversified = Between 20% and 40% of sales outside main industry. Highly Diversified = More than 40% of sales outside main industry. Reference: Franko, 2004 Level of Diversification Session 03 ? Furrer 2002-2008 * How Parents Create Value Stand-alone influence Linkage influence Central functions and services Corporate development Source: Goold, Campbell and Alexander, 1994 Session 03 ? Furrer 2002-2008 * Summary Model of the Relationship between Firm Performance and Diversification Resources Capital Market Intervention and Market for Managerial Talent Diversification Strategy Firm Performance Internal Governance Strategy Implementation Incentives Managerial Motives Ref.: Hoskisson and Hitt, 1990 Session 03 ? Furrer 2002-2008 * Rumelt’s Strategy, Structure and Economic Performance (1974) represents a landmark in the study of corporate strategy. His key finding was the superiority of related over unrelated diversification. Empirical studies of the relationship between diversification strategy and performance initially confirmed the superiority of related diversification over unrelated diversification (Bettis, 1981; Christensen and Montgomery, 1981; Rumelt, 1982: Lecraw, 1984). Summary Session 03 ? Furrer 2002-2008 * However, as the volume of empirical work on the relationship between diversification strategy and performance grew, the findings became more inconsistent. Some studies found no significant relationship between relatedness in diversification and profitability (Grant et al., 1988) While other studies found unrelated diversification to be more profitable than related diversification (Michel and Shaked, 1984; Luffman and Reed, 1984; Lubatkin, 1987). Some other studies observed a curvilinear relationship (Grant et al, 1988; Lubatkin and Chatterjee, 1994; P