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Diversification, Refocusing, and Economic Performance

1995 Business & Economics
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Release : 1995
Genre : Business & Economics
Kind : eBook
Book Rating : 111/5 ( reviews)

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Book Synopsis Diversification, Refocusing, and Economic Performance by : Constantinos Markides

Download or read book Diversification, Refocusing, and Economic Performance written by Constantinos Markides. This book was released on 1995. Available in PDF, EPUB and Kindle. Book excerpt: This work examines the causes and consequences of the "refocusing" phenomenon, where companies have stopped diversifying and begun focusing once more on their core product lines. Coverage includes a discussion of the effects of refocusing on market value, profitability and organizational structure.

Purposive Diversification and Economic Performance

1993-06-25 Business & Economics
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Release : 1993-06-25
Genre : Business & Economics
Kind : eBook
Book Rating : 151/5 ( reviews)

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Book Synopsis Purposive Diversification and Economic Performance by : John T. Scott

Download or read book Purposive Diversification and Economic Performance written by John T. Scott. This book was released on 1993-06-25. Available in PDF, EPUB and Kindle. Book excerpt: Exploring hypotheses about purposive diversification and ensuing economic performance, this study offers insights into the debate about cooperation versus competition among firms.

Diversification, Industry Dynamism, and Economic Performance

2013-07-01 Business & Economics
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Release : 2013-07-01
Genre : Business & Economics
Kind : eBook
Book Rating : 774/5 ( reviews)

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Book Synopsis Diversification, Industry Dynamism, and Economic Performance by : Matthias Knecht

Download or read book Diversification, Industry Dynamism, and Economic Performance written by Matthias Knecht. This book was released on 2013-07-01. Available in PDF, EPUB and Kindle. Book excerpt: ​The decision to diversify lies at the core of corporate strategy and is one of the most important decisions for top management. Matthias Knecht introduces a new perspective on corporate diversification that extends the academic discussion and reveals substantial new insights with regards to one of the most pressing questions in strategic management: what makes a diversification strategy successful? The author introduces the dynamism of industries as the dominant force in the firm’s environment that influences the organization on all levels. Due to strategic, organizational, and managerial similarities of businesses competing in similar dynamic environments, synergistic benefits and superior economic performance can be realized through the combination of dynamic-related businesses in the corporate portfolio. This study provides a quantitative, multidimensional operationalization of industry dynamism and an in-depth assessment of the dynamism of a wide range of industries. At the core of the study lies the investigation of the performance impact of dynamic-related diversification strategies. The results provide new insights into successful portfolio construction strategies in the face of today’s dynamic environments.

Diversification, Refocusing, and Firm Value

2010
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Release : 2010
Genre :
Kind : eBook
Book Rating : /5 ( reviews)

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Book Synopsis Diversification, Refocusing, and Firm Value by : Gonul Colak

Download or read book Diversification, Refocusing, and Firm Value written by Gonul Colak. This book was released on 2010. Available in PDF, EPUB and Kindle. Book excerpt: At any point in time a firm faces three restructuring choices: diversify, refocus, or do nothing. This study analyzes the causes and the consequences of these actions in a unified framework using the appropriate methodologies. Various factors, such as firm's characteristics and multinational nature, its industry's characteristics, its exchange and index inclusion, and divested (or acquired) segment(s)' industry conditions, are considered as the determinants of the diversifying and the refocusing decisions. The estimation results from the corresponding multinomial logit model suggest that refocusing occurs generally due to firm-specific reasons, and diversification due to outside factors, such as industry and economic conditions. Added or dropped segment's industry profitability, its relationship to the core business of the firm, and its relatedness to the businesses of the conglomerate's other segments have a nontrivial effect on either decision. In a related analysis, the paper explicitly models and estimates the valuation consequences that are sustained by the firm after it undertakes a refocusing or a diversification action. To isolate the changes in firm's value that are due to these decisions only, a 2SLS estimation is used to control for endogeneity that arises because the factors that affect a firm's value are likely to have also induced the firm to make the corresponding decision. The novelty of my approach is in its inclusion of variables measuring the consequences due to both actions, the diversification and the refocusing, in the same valuation equation. Contrary to some earlier findings, I find no evidence of 'diversification discount' or 'refocusing premium.' The choice of this paper to analyze all corporate restructuring decisions in a unified framework yields valuable business insights into the reasons for undertaking such corporate events.

Diversification and Focus

2005
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Release : 2005
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Book Synopsis Diversification and Focus by : Lee Perry

Download or read book Diversification and Focus written by Lee Perry. This book was released on 2005. Available in PDF, EPUB and Kindle. Book excerpt: We propose a new application of the resource-based view (RBV) that is more consistent with Penrose's (1959) original framework. We use that framework to study the relationship between diversification and refocusing strategies and economic performance. We propose that the RBV may be enhanced by the explicit recognition of Penrose's two classes of resources, administrative and productive resources. This distinction suggests a focus on the administrative decisions of managers, including the multiple decisions associated with diversification and refocusing strategies, which lead to economic performance. Second, we argue that RBV theory is a theory about extraordinary performers or outliers, not averages. Therefore, the statistical methods used in applying the theory must account for individual firm differences, rather than based on means, which statistically neutralize firm differences. We introduce a novel Bayesian Hierarchical method to examine actions taken by new CEOs and the resulting effects on economic performance over time. The unique feature of this Bayesian method is it allows us to make meaningful probability statements about the diversification and refocusing strategies of individual firms.

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