Corporate diversification

Business Model Opportunities When News Has Become a Public Good

Book

Full-text available

Oct 2023

Atte Jääskeläinen

https://urn.fi/URN:ISBN:978-952-335-979-6 This dissertation explores business model opportunities for news when information is freely accessible. It asks: How have news agencies responded to the declining commercial value of news in their strategies and business models? What, if any, are the critical elements of sustainable business models to produce news that has become a public good? The root causes of the European news agency industry transformation are first analysed through the changes new technologies have brought to competitive forces. Successful new business models in European national news agencies are then examined through case studies of selected agencies. Finally, survey-based statistical methods combined with interviews and qualitative analyses are used to test empirically whether the news is a so-called anti-rival good, meaning that news is a good that increases in value when used by others. Three emerging opportunities for new business model innovations are analysed in depth: resource-based diversification, platform business models, and user contributions. The findings show that incumbent firms’ resources or capabilities have been used successfully for related business diversification, either into new services to media customers or into new, more profitable markets, such as corporations and institutions. A specific diversification category is innovating platform business models using resources built for news operations as “incumbent advantages” in platform strategies, including platform launches. Multisided platforms enable the development of profitable business models that employ the same resources as general news services. Using the news to subsidize a platform may allow news services to be produced sustainably, even at a loss. The findings also suggest that incumbent firms benefit from, for example, existing owner and client relationships and an established trusted brand. The analyses of user contributions show that, on average, the news may even lose value due to contributions by other users. However, intercorrelations reveal interesting opportunities for value creation, as value perceptions vary, and value shifts depend on the types of value the news story creates for the user. A deep understanding of what values news creates and how they are interlinked is called for in digital news service design

Abnormal Stock Market Returns to Business Model Extension Announcements -Value Drivers & Moderators

Preprint

Full-text available

Apr 2024

Thiemo Werner

This study has two guiding research questions: (1) how does company, industry, and macroeconomic uncertainty influence the capital market reaction to the extension of the business model of a company, and (2) what is the interplay between traditional product industry diversification and business model extension? We create a unique dataset by examining joint ventures (JV) in the high-tech industry between 1998 and 2019 with multiple cases of business model extensions. Utilizing an event study setup for the JV announcements, we then measure the effect of business model extensions. We find that JV announcements with business model extensions lead to higher abnormal stock market returns. We also find that this effect is nuanced because company-level, industry-level, and macro economic uncertainty increases the positive effect of business model extensions. Further, we find that, under these uncertainties, combinations of business model extensions and product industry diversification are value-creating, while traditional product industry diversification is value-destroying.

DIVERSIFICAÇÃO GEOGRÁFICA E O DESEMPENHO EM COOPERATIVAS DE CRÉDITO BRASILEIRAS

Conference Paper

Jan 2023

Resumo Este trabalho identificou se a diversificação geográfica afeta o desempenho de cooperativas de crédito singulares brasileiras, a partir de uma análise de dados em painel de 644 cooperativas, no período de 2016-2 a 2022-1. Através da análise treze modelos de regressão, estimados pelo Método do Momentos Generalizados Sistêmico, observou-se a existência da relação entre a diversificação geográfica e o desempenho das cooperativas de crédito brasileiras. No entanto, a relação identificada foi distinta quanto ao tipo de desempenho analisado. Ao considerar o desempenho financeiro a relação encontrada foi negativa, enquanto no desempenho social a relação foi positiva. Esses achados sugerem que a diversificação geográfica seria uma estratégia mais voltada para a captação de associados e para o crescimento, em vez de estimular maiores retornos. Portanto, este estudo se destaca por fomentar as discussões sobre os possíveis efeitos da diversificação geográfica no desempenho das cooperativas de crédito. Palavras-chave: postos de atendimento; mercados; desempenho financeiro; desempenho social.

Property Rights and Firm Scope

Article

Sep 2023

The voluminous strategy research on the determinants of corporate scope is often premised on a well-established property rights regime, which contrasts with the weak property rights protection that still characterizes most countries today. We address this gap by applying property rights theory to theorize and empirically examine how the strengthening of the property rights regime affects corporate scope. Our analysis exploits the enactment of a property law that enhanced the formal protection of private properties in China as a quasi-experiment. We show that with a strengthened property rights regime, the horizontal relatedness among private firms’ businesses increases, but their vertical relatedness decreases, compared with state-owned firms. Further, these effects are less prominent for politically connected firms that are afforded informal protection of property rights. Our findings shed new light on the property rights regime as a critical determinant of firms’ horizontal and vertical scope.

Trees in the Forest: How Do Family Owners Make CSR Decisions in Business Groups?

Article

Full-text available

Oct 2022
J BUS ETHICS

Previous studies have been split over how to view family owners’ CSR engagement, arguing that they either engage in or disengage from CSR based on different motives (i.e., preserving socio-emotional wealth vs. seeking rent expropriation). Focusing on family owners in business groups, this study integrates these divergent views. We hypothesize that family owners would pursue both motives simultaneously by optimizing the level of CSR of each affiliated firm depending on their ownership level. Furthermore, we argue that this tendency is moderated by group-level contexts. Using a sample of Korean business groups, we found that family ownership is negatively associated with affiliated firms’ CSR. Also, this negative relationship is more pronounced when firms belong to business groups with more charitable corporate foundations and when business networks are greater in their scope and scale. This study contributes to the literature by offering a more complete understanding of how family owners make CSR decisions in business group contexts.

Corporate Diversification and Ponzi Finance

Preprint

Full-text available

Jan 2025

Min Bai

This study investigates the relationship between corporate diversification and Ponzi finance within China's A-share-listed non-financial firms from 2006 to 2020. Our research reveals a positive and significant correlation between diversification and Ponzi finance. Asset liquidity, bank borrowing, and profitability emerge as crucial mediating factors in this relationship. We also find that this relationship is stronger in highly marketized regions, while weaker in sectors with government policy support. Furthermore, our analysis underscores the potential for increased institutional investor shareholdings and investments in research and development to mitigate the adverse effects of diversification on Ponzi finance. These findings contribute to the understanding of management strategies in Chinese firms and their implications for Ponzi finance, aiding in the identification and mitigation of financial risks at the firm level.

Coherent diversification in corporate technological portfolios

Preprint

Jul 2017

We study the relationship between firms' performance and their technological portfolios using tools borrowed from the complexity science. In particular, we ask whether the accumulation of knowledge and capabilities related to a coherent set of technologies leads firms to experience advantages in terms of productive efficiency. To this end, we analyzed both the balance sheets and the patenting activity of about 70 thousand firms that have filed at least one patent over the period 2004-2013. From this database it is possible to define a measure of the firms' coherent diversification, based on the network of technological fields, and relate it to the firms' perfomance in terms of labor productivity. Such a measure favors companies with a diversification structure comprising blocks of closely related fields over firms with the same breadth of scope, but a more scattered diversification structure. We find that the coherent diversification of firms is quantitatively related to their economic performance and captures relevant information about their productive structure. In particular, we prove on a statistical basis that a naive definition of technological diversification can explain labor productivity only as a proxy of size and coherent diversification. This approach can be used to investigate possible synergies within firms and to recommend viable partners for merging and acquisitions.

Abnormal Stock Market Returns to Business Model Extension Announcements — Value Drivers & Moderators

Conference Paper

Full-text available

Nov 2024

Thiemo Werner

This study explores how company, industry, and macroeconomic uncertainties, as well as product-industry diversification, affect capital market reactions to business model extensions (BMEs). The value-creation potential of BME in incumbent companies remains a subject of ongoing debate and is currently not substantiated by market-value-focused empirical research. We add to an emerging research stream that provides empirical evidence for the strategic value of BME, important moderators of value creation, and the interplay with traditional product-industry diversification. We utilize an event-study setup to measure the value-creating effect of BME and its moderators. Using a unique dataset of joint ventures in the high-tech industry, we measure the effects of BME and its moderators on abnormal stock market returns. Our findings confirm that BME leads to higher abnormal stock market returns. This effect is amplified under company-level, industry-level, and macroeconomic uncertainty. Additionally, we discover that under these uncertainties, combinations of BME and product-industry diversification are value-creating, whereas product-industry diversification alone tends to be value-destroying.

The Relationship Between Strategic Types and Strategic Management Processes

Article

Full-text available

Oct 2024

Belal DAHIAM SAIF Ghaleb

This study explores the definition of strategic management processes, their stages, and how different strategy types are integrated within these processes. It examines how strategies align with organizational objectives, environments, and performance. The aim is to enhance knowledge and understanding to improve strategic decision-making and ensure effective strategic planning and implementation. Using a compilation and analysis method, this study synthesizes previous research to help businesses gain competitive advantage, adapt to changing conditions, and assess performance. The study focuses on the relationships between strategy types and strategic management processes, as well as the potential future impacts of these interactions.

Exploring the Linkages between Organizational Resilience, Corporate Diversification Strategy, and Slack Resources

Article

Sep 2024

Ahmad N. Abuzaid

Objective: Organizational resilience is crucial for the success of any business. However, the existing research on the subject is limited, and a more well-defined and unified paradigm is needed. Therefore, the central goal of this research study is to inspect whether the level of slack resources significantly influences the association between diversification strategy and the organization’s ability to build resilience. Methodology: The investigation analyzed a study sample of 291 employees from three different telecommunications firms in Jordan using a quantitative, descriptive, and correlational design to achieve its objectives. Structural Equation Modeling with the Amos 26 software was used to test the research hypotheses. Results: The study has revealed a positive correlation between diversification strategy and organizational resilience. In addition to this, the research has found that slack resources are positively associated with organizational resilience. It has also shed light on the significant mediating impact of slack resources in this relationship. Recommendations: These findings indicate that slack resources can amplify the potential benefits of a diversification strategy, which, in turn, enhances an organization’s resilience. The study suggests companies should utilize their slack resources when diversifying into new markets or products. A diversification strategy can enable them to adeptly tackle any challenges that come their way and become more resilient in the long run. الهدف: هدفت هذه الدراسة الى اختبار ما إذا كان مستوى الموارد الراكدة يؤثر على العلاقة بين استراتيجية التنويع وقدرة المنظمة على بناء المرونة. تكون مجتمع الدراسة من شركات الاتصالات في الأردن والبالغ عددها ثلاث شركات. المنهج: تم جمع بيانات الدراسة من خلال استبانة وزعت على عينة قصدية تكونت من 291 موظفا يعملون في الشركات المبحوثة. تم استخدام المنهج الكمي والوصفي والتصميم الارتباطي لتحقيق أهداف الدراسة، كما تم تطبيق اسلوب نمذجة المعادلات الهيكلية باستخدام برنامج Amos 26 لاختبار الفرضيات، النتائج: كشفت الدراسة عن وجود علاقة إيجابية بين استراتيجية التنويع والمرونة التنظيمية، كما توصلت الدراسة الى أن الموارد الراكدة ترتبط بشكل إيجابي بالمرونة التنظيمية، و أن التأثير الوسيط للموارد الراكدة في العلاقة بين استراتيجية التنويع والمرونة التنظيمية دال احصائيا، وتشير هذه النتائج إلى أن الموارد الراكدة يمكن أن تزيد من الفوائد المحتملة لاستراتيجية التنويع، والذي بدوره يعزز مرونة المنظمة. التوصيات: اوصت الدراسة بضرورة استفادة الشركات المبحوثة من مواردها الراكدة عند تطبيق استراتيجيات التنويع سواء في الأسواق أو المنتجات الجديدة، و أن تطبق الشركات المبحوثة استراتيجية التنويع لمعالجة أي تحديات تعترض طريقها والحفاظ على مرونتها على المدى الطويل.

Diversification and Growth of Farms

Article

Mar 2002

The liberalization of agricultural markets has increased the interest of farmers (as well as those working on policies concerned with their welfare) in agricultural diversification strategies. However, empirical research on diversification in European agricultural markets is very limited. This paper follows OUSTAPASSIDIS (1992) and investigates the relationship between different diversification strategies and farm performance (farm growth rates). The results of fixed- and random-effect models for approx. 3900 farms in Schleswig-Holstein for the period 1988/89-1997/98 show that diversification into related products increases growth rates whereas the opposite applies for diversification into unrelated products. Initial farm size has a significant and negative impact on the rate of growth which implies ß-convergence of farm sizes.

Discussion on Diversification and Firm Profitability

Article

Full-text available

Jul 2018

The desire for our firm to improve their profitability lead to adoption of different measure of performance to enable them occupied the large share of the market. This research work focuses discussion on diversification and profitability. The purpose of the study was to examine diversification and performance on profitability. The study is to examine diversification in relationship with performance on profitability in an organization and also access the fundamental theories of diversification, models of diversification and firm performance. The methodology of the study is anchored on secondary material. Finding shows that multinational diversification was more successful in generating increased in return on capital than product diversification and also diversification was positively related to changes in profitability. It is recommended that despite the fact that the finding show little profit for limited diversification small firm are encourage diversifying in related product than unrelated product. Key words: Diversification, profitability, firm performance.

The Impact of Restrictions on the State-Owned Enterprises to Expand their Operations into New Product Lines in Latvia

Conference Paper

Full-text available

Jun 2024

Inguss Vircavs

There is a practice among OECD countries of establishing restrictions for state-owned enterprises to develop new products in addition to their main production. Scarce attention is paid to how such an approach affects public enterprises’ performance in favour of the public good; thus, it must be clarified. This research aims to propose competition policy improvements based on the evaluated impact of new product restrictions on competition neutrality. The research methodology includes interviews with Latvian public sector stakeholders concerning the advantages of optimal use of the company’s resources and risks’ diversification. Private sector disadvantages if state-owned enterprises offer their products in private-dominated markets are considered. It was observed that national policy is contradictory: there is an emphasis on efficiency goals, but the expansion initiatives by state-owned enterprises in the market are accepted reluctantly. Taking advantage of state-owned enterprises to boost R&D innovations is important to fostering Latvian regional development policies.

EFFECTS OF INCOME DIVERSIFICATION ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED IN SIERRA LEONE

Article

Full-text available

May 2024

James L. S. Kollie

p>The aim of this study was to determine the effect of income diversification on the financial performance of commercial banks in Sierra Leone. A descriptive research design was adopted. A census targeting the listed commercial banks in Sierra Leone from the year 2018 to 2022 was conducted. The statistical significance of each independent variable was tested by performing a t-test at a 5% level of significance. The significance of the regression model was tested by performing an F-test at a 5% significance level. The independent variables' explanatory power was evaluated using the coefficient of determination, R^2. The study found that income diversification was negatively related to financial performance. The results of the t-test indicated that the effect was not statistically significant. It also found that size and capital adequacy had a positive effect, which was statistically significant, while liquidity had a negative impact on financial performance and was not statistically significant. The coefficient of determination for the regression was found to be 35.7%. This implies that the independent variable explained only 35.7% of the changes in the dependent variable. The study concluded that income diversification is a costly affair for commercial banks since it has a negative impact on financial performance. It also concluded that size and capital adequacy had a positive impact on financial performance while liquidity had a negative impact. This study recommends that commercial banks should not commit resources to diversifying their income because diversification appears to be a costly affair. Also, investors should not be concerned about a bank’s income diversification in selecting investment opportunities as diversification of income does not generate positive financial performance. EFFETS DE LA DIVERSIFICATION DES REVENUS SUR LA PERFORMANCE FINANCIÈRE DES BANQUES COMMERCIALES COTÉES EN SIERRA LEONE L'objectif de cette étude était de déterminer l'effet de la diversification des revenus sur la performance financière des banques commerciales en Sierra Leone. Un plan de recherche descriptif a été adopté. Un recensement ciblant les banques commerciales cotées en Sierra Leone de l'année 2018 à 2022 a été réalisé. La signification statistique de chaque variable indépendante a été testée en effectuant un test t à un niveau de signification de 5 %. La signification du modèle de régression a été testée en effectuant un test F à un niveau de signification de 5 %. Le pouvoir explicatif des variables indépendantes a été évalué en utilisant le coefficient de détermination, R^2. L'étude a révélé que la diversification des revenus était négativement liée à la performance financière. Les résultats du test t ont indiqué que l'effet n'était pas statistiquement significatif. Il a également été constaté que la taille et l'adéquation des capitaux avaient un effet positif, qui était statistiquement significatif, tandis que la liquidité avait un impact négatif sur la performance financière et n'était pas statistiquement significative. Le coefficient de détermination pour la régression a été trouvé à 35,7 %. Cela implique que la variable indépendante expliquait seulement 35,7 % des changements de la variable dépendante. L'étude a conclu que la diversification des revenus est une affaire coûteuse pour les banques commerciales car elle a un impact négatif sur la performance financière. Il a également conclu que la taille et l'adéquation des capitaux avaient un impact positif sur la performance financière tandis que la liquidité avait un impact négatif. Cette étude recommande que les banques commerciales ne devraient pas engager de ressources pour diversifier leurs revenus car la diversification semble être une affaire coûteuse. De plus, les investisseurs ne devraient pas se préoccuper de la diversification des revenus d'une banque dans la sélection des opportunités d'investissement car la diversification des revenus ne génère pas de performance financière positive. EFFETTI DELLA DIVERSIFICAZIONE DEI REDDITI SULLA PERFORMANCE FINANZIARIA DELLE BANCHE COMMERCIALI ELICOTTE IN SIERRA LEONE Lo scopo di questo studio era determinare l'effetto della diversificazione dei redditi sulla performance finanziaria delle banche commerciali in Sierra Leone. È stato adottato un disegno di ricerca descrittivo. È stato condotto un censimento mirato alle banche commerciali elencate in Sierra Leone dal 2018 al 2022. La significatività statistica di ciascuna variabile indipendente è stata testata eseguendo un test t al livello di significatività del 5%. La significatività del modello di regressione è stata testata eseguendo un test F al livello di significatività del 5%. Il potere esplicativo delle variabili indipendenti è stato valutato usando il coefficiente di determinazione, R^2. Lo studio ha scoperto che la diversificazione dei redditi era negativamente correlata alla performance finanziaria. I risultati del test t hanno indicato che l'effetto non era statisticamente significativo. Si è anche scoperto che la dimensione e l'adeguatezza di capitale avevano un effetto positivo, che era statisticamente significativo, mentre la liquidità aveva un impatto negativo sulla performance finanziaria e non era statisticamente significativa. Il coefficiente di determinazione per la regressione è stato trovato essere del 35,7%. Ciò implica che la variabile indipendente spiegava solo il 35,7% delle variazioni della variabile dipendente. Lo studio ha concluso che la diversificazione dei redditi è una questione costosa per le banche commerciali poiché ha un impatto negativo sulla performance finanziaria. Ha anche concluso che la dimensione e l'adeguatezza di capitale avevano un impatto positivo sulla performance finanziaria mentre la liquidità aveva un impatto negativo. Questo studio raccomanda che le banche commerciali non dovrebbero impegnare risorse per diversificare i loro redditi perché la diversificazione sembra essere una questione costosa. Inoltre, gli investitori non dovrebbero preoccuparsi della diversificazione dei redditi di una banca nella selezione delle opportunità di investimento poiché la diversificazione dei redditi non genera una performance finanziaria positiva. EFECTOS DE LA DIVERSIFICACIÓN DE INGRESOS EN EL RENDIMIENTO FINANCIERO DE LOS BANCOS COMERCIALES ENUMERADOS EN SIERRA LEONA El objetivo de este estudio fue determinar el efecto de la diversificación de ingresos en el rendimiento financiero de los bancos comerciales en Sierra Leona. Se adoptó un diseño de investigación descriptivo. Se realizó un censo dirigido a los bancos comerciales enumerados en Sierra Leona desde el año 2018 hasta el 2022. La significancia estadística de cada variable independiente se probó realizando una prueba t a un nivel de significancia del 5%. La significancia del modelo de regresión se probó realizando una prueba F a un nivel de significancia del 5%. El poder explicativo de las variables independientes se evaluó utilizando el coeficiente de determinación, R^2. El estudio encontró que la diversificación de ingresos estaba relacionada negativamente con el rendimiento financiero. Los resultados del test t indicaron que el efecto no era estadísticamente significativo. También se encontró que el tamaño y la adecuación de capitales tenían un efecto positivo, que era estadísticamente significativo, mientras que la liquidez tenía un impacto negativo en el rendimiento financiero y no era estadísticamente significativa. El coeficiente de determinación para la regresión se encontró que era del 35,7%. Esto implicaba que la variable independiente explicaba solo el 35,7% de los cambios en la variable dependiente. El estudio concluyó que la diversificación de ingresos es un asunto costoso para los bancos comerciales ya que tiene un impacto negativo en el rendimiento financiero. También concluyó que el tamaño y la adecuación de capitales tenían un impacto positivo en el rendimiento financiero mientras que la liquidez tenía un impacto negativo. Este estudio recomienda que los bancos comerciales no deberían comprometer recursos para diversificar sus ingresos porque la diversificación parece ser un asunto costoso. Además, los inversores no deberían preocuparse por la diversificación de ingresos de un banco en la selección de oportunidades de inversión ya que la diversificación de ingresos no genera un rendimiento financiero positivo. EFEITOS DA DIVERSIFICAÇÃO DE RENDA NO DESEMPENHO FINANCEIRO DOS BANCOS COMERCIAIS LISTADOS NA SERRA LEONE O objetivo deste estudo foi determinar o efeito da diversificação de renda no desempenho financeiro dos bancos comerciais na Serra Leoa. Foi adotado um desenho de pesquisa descritivo. Foi realizado um censo direcionado aos bancos comerciais listados na Serra Leoa do ano de 2018 a 2022. A significância estatística de cada variável independente foi testada realizando um teste t a um nível de significância de 5%. A significância do modelo de regressão foi testada realizando um teste F a um nível de significância de 5%. O poder explicativo das variáveis independentes foi avaliado usando o coeficiente de determinação, R^2. O estudo descobriu que a diversificação de renda estava negativamente relacionada ao desempenho financeiro. Os resultados do teste t indicaram que o efeito não era estatisticamente significativo. Também foi constatado que o tamanho e a adequação de capitais tiveram um efeito positivo, que foi estatisticamente significativo, enquanto a liquidez teve um impacto negativo no desempenho financeiro e não foi estatisticamente significativa. O coeficiente de determinação para a regressão foi encontrado como 35,7%. Isso implicava que a variável independente explicava apenas 35,7% das mudanças na variável dependente. O estudo concluiu que a diversificação de renda é um assunto custoso para os bancos comerciais, pois tem um impacto negativo no desempenho financeiro. Também concluiu que o tamanho e a adequação de capitais tiveram um impacto positivo no desempenho financeiro, enquanto a liquidez teve um impacto negativo. Este estudo recomenda que os bancos comerciais não devem comprometer recursos para diversificar sua renda, pois a diversificação parece ser um assunto custoso. Além disso, os investidores não devem se preocupar com a diversificação de renda de um banco na seleção de oportunidades de investimento, pois a diversificação de renda não gera desempenho financeiro positivo. ΕΠΙΠΤΩΣΕΙΣ ΤΗΣ ΠΟΙΚΙΛΙΟΠΟΙΗΣΗΣ ΤΩΝ ΕΣΟΔΩΝ ΣΤΗΝ ΟΙΚΟΝΟΜΙΚΗ ΕΠΙΔΟΣΗ ΤΩΝ ΕΜΠΟΡΙΚΩΝ ΤΡΑΠΕΖΩΝ ΠΟΥ ΕΙΝΑΙ ΚΑΤΑΤΕΘΕΙΣΜΕΝΕΣ ΣΤΗ ΣΙΕΡΑ ΛΕΟΝΕ Σκοπός αυτής της μελέτης ήταν να καθοριστεί η επίδραση της ποικιλίας των εσόδων στην οικονομική απόδοση των εμπορικών τραπεζών στη Σιέρρα Λεόνε. Ένα περιγραφικό σχέδιο έρευνας υιοθετήθηκε. Πραγματοποιήθηκε ένας απογραφή που στόχευε στις εμπορικές τράπεζες που είναι καταχωρημένες στη Σιέρρα Λεόνε από το έτος 2018 έως το 2022. Η στατιστική σημαντικότητα κάθε ανεξάρτητης μεταβλητής ελέγχθηκε με εκτέλεση ενός τ-τεστ σε επίπεδο σημαντικότητας 5%. Η σημαντικότητα του μοντέλου παλινδρόμησης ελέγχθηκε με εκτέλεση ενός F-τεστ σε επίπεδο σημαντικότητας 5%. Το εξηγητικό δυναμικό των ανεξάρτητων μεταβλητών αξιολογήθηκε χρησιμοποιώντας το συντελεστή προσδιορισμού, R^2. Η μελέτη διαπίστωσε ότι η ποικιλία των εσόδων ήταν αρνητικά σχετιζόμενη με την οικονομική απόδ JEL: G21, G28, L25, O16 Article visualizations: </p

DIVERSIFICATION AND COORDINATION IN AGRICULTURAL COOPERATIVES: STUDY PROPOSAL

Article

Feb 2024

Agricultural cooperatives have diversified their businesses in response to economic, financial and political changes. Despite its economic and social importance and its distinct organizational characteristics, few studies address diversification in cooperatives. When diversifying, new activities require the cooperative and members to adapt to the demands of end markets, emphasizing vertical coordination and focusing on business terms. In addition, the cooperative begins to coordinate several production chains with the member. As a result, some doubts arise regarding the efficiency of the cooperatives' governance structure for these activities and the impact on other associated activities. With this, the objective was to present a study proposal aiming to identify how the diversification strategies adopted in agricultural cooperatives relate to the governance structure and what the consequences are for other existing exchange relationships. To this end, a theoretical discussion was held according to the complementarity of Transaction Cost Economics (ECT) and Measurement Cost Economics (ECM), with the support of a bibliographical survey on the diversification strategy in cooperatives and the relationship with members.

Non-governmental organizations’ motivation to diversify: self-interest or operation-related? Evidence from Uganda

Article

Full-text available

Jan 2023

Understanding the mechanisms that guide non-governmental organizations’ (NGOs) managerial decisions is a key to effective development policies. One fundamentally strategic decision is the number of activities an NGO offers. We provide a conceptual framework based on the agency theory to study the motivations underlying strategic decisions of development NGOs in Uganda. We test whether diversifying into many activities is driven by operational reasons or by personal gains of NGO managers. Following a historic flood in 2007, NGOs that rely more on contractual income offer fewer activities than their counterparts in less affected areas. The results support theoretical explanations that operational motives such as risk-reduction or cost complementarity dominate personal and for-profit-like motives. Our article contributes to the debates around the ethical and governmental foundation of the non-profit sector, highlighting the different roles of personal and operational aspects in the decision-making process.

Effect of Diversification on Financial Performance of Quoted Manufacturing Firms in Nigeria

Article

Full-text available

Dec 2023

Corporate diversification has been a concern for corporate organizations that are determined for growth and expansion. Despite the existence of several frameworks of corporate governance and management to ensure effective and efficient management of subsidiaries and business segments, firms are still facing financial performance challenges resulting from management policies, structural and operational deficiencies, and accountability and transparency issues which could not be addressed by available studies conducted in advanced and industrialized countries with stable and low risks environment. Effect of subsidiaries diversification on the financial performance of Nigeria's quoted manufacturing firms is an empirical panacea for developing nations. This study examines the effect of subsidiaries diversification and business segments diversification on the financial performance (return on assets, return on equity, and return on capital employed) of quoted manufacturing firms in Nigerian. The study used Ex-post-facto research design and secondary data from 42 firms out of the 63 quoted manufacturing firms in Nigeria from 2007 to 2017. Structural equation modeling (SEM) (Partial Least Squares, PLS) was used for data analysis and test of hypotheses. PLS Results indicate that while subsidiaries diversification has no significant effect, business segments diversification has a significant effect on the ROA, ROE, and ROCE of quoted manufacturing firms in Nigeria. The study concluded that the financial performance of quoted manufacturing firms in Nigeria is significantly affected by expansion through business segments The study recommends that quoted manufacturing firms in Nigeria should create more businesses with unique products and geographical locations within the main company to improve their financial performance. The study also recommends that quoted manufacturing firms in Nigeria should carefully select their choice of diversification through the creation of subsidiaries to maintain and improve superior financial performance.

Effect of Diversification on Financial Performance of Quoted Manufacturing Firms in Nigeria

Article

Full-text available

Dec 2021

Umar Gunu Suleiman

Corporate diversification has been a concern for corporate organizations that are determined for growth and expansion. Despite the existence of several frameworks of corporate governance and management to ensure effective and efficient management of subsidiaries and business segments, firms are still facing financial performance challenges resulting from management policies, structural and operational deficiencies, and accountability and transparency issues which could not be addressed by available studies conducted in advanced and industrialized countries with stable and low risks environment. Effect of subsidiaries diversification on the financial performance of Nigeria's quoted manufacturing firms is an empirical panacea for developing nations. This study examines the effect of subsidiaries diversification and business segments diversification on the financial performance (return on assets, return on equity, and return on capital employed) of quoted manufacturing firms in Nigerian. The study used Ex-post-facto research design and secondary data from 42 firms out of the 63 quoted manufacturing firms in Nigeria from 2007 to 2017. Structural equation modeling (SEM) (Partial Least Squares, PLS) was used for data analysis and test of hypotheses. PLS Results indicate that while subsidiaries diversification has no significant effect, business segments diversification has a significant effect on the ROA, ROE, and ROCE of quoted manufacturing firms in Nigeria. The study concluded that the financial performance of quoted manufacturing firms in Nigeria is significantly affected by expansion through business segments The study recommends that quoted manufacturing firms in Nigeria should create more businesses with unique products and geographical locations within the main company to improve their financial performance. The study also recommends that quoted manufacturing firms in Nigeria should carefully select their choice of diversification through the creation of subsidiaries to maintain and improve superior financial performance.

Diversificação e Desempenho em Cooperativas de Crédito: uma Abordagem Não Linear

Article

Full-text available

Aug 2023

Este estudo verificou a existência de uma relação não linear entre a diversificação e o desempenho das cooperativas de crédito brasileiras ao analisar dados em painel de 455 cooperativas de crédito no período de junho de 2012 a dezembro de 2019. Por meio de três modelos de regressão, estimados pelo Método dos Momentos Generalizado Sistêmico, identificouse que a diversificação possui uma relação não linear com o desempenho, na forma de U. Esse resultado demonstra a existência de um ponto mínimo para a diversificação, a partir do qual aumentos na diversificação de produtos financeiros proporcionariam efeitos positivos no desempenho. Este estudo se destaca por trazer um modelo curvilíneo para a diversificação em cooperativas de crédito. Tal achado facilita o entendimento de qual nível de diversificação é benéfico para o desempenho das cooperativas, além de poder favorecer a formação de estratégias e análises de implementação de novos produtos financeiros nas cooperativas de crédito.

Diversification and Performance in Credit Unions: A Non-Linear Approach

Article

Full-text available

Aug 2023

This study verified the existence of a non-linear relationship between diversification and the performance of Brazilian credit unions by analyzing panel data from 455 credit unions from June 2012 to December 2019. Through three regression models, estimated by the Systemic Generalized Method of Moments, it was identified that diversification has a non-linear U-shaped relationship with performance. This result demonstrates the existence of a minimum point for diversification, from which increases in diversification of financial products would provide positive effects on performance. This study stands out for bringing a curvilinear model for diversification in credit unions. This finding facilitates the understanding of which level of diversification is beneficial for the performance of credit unions, in addition to favoring the formation of strategies and analysis of the implementation of new financial products in credit unions. Keywords: Inverted U; curvilinear relationship; Systemic GMM

The Effect of Mergers and Acquisitions on Bank Risk Taking

Article

Full-text available

Jul 2023

Lu Wang

This paper evaluates how the risks associated with mergers and acquisitions (M&As) affect Bank Holding Companies’ (BHCs) levels of insolvency risk. Bank insolvency is hypothesized to be affected by M&As directly and indirectly through banks’ market risk, geographical diversification, and activity diversification. The relationship between bank insolvency, diversification, and market risk are estimated as a system using the Generalized Method of Moments (GMM). The key finding is that M&As erode banks’ insolvency, both directly and indirectly through the effects associated with their geographical diversification.

Changes in the industrial and geographical diversifi cation of leading fi rms in European manufacturing

Chapter

Nov 2004

External Financing and Firm Growth: Evidence from Micro, Small, and Medium Enterprises in Iran

Preprint

Full-text available

Mar 2023

This study examines the relationship between access to finance and growth in sales for Micro, Small, and Medium Enterprises (MSMEs) in Iran. Using data from 486 firms in five provinces, our findings indicate that external financing positively impacts sales growth for MSMEs. The results suggest that financing for research and development expenditures, production diversification, new employment and advertising can significantly contribute to increased sales growth. We also find that spending on intellectual property, labor training and land and building acquisition have a negative moderating effect on the relationship between finance and sales growth.

comportements des directeurs à l’adoption d’une stratégie de diversification dans les sociétés anonymes non cotées

Article

Full-text available

Jun 2019

Cette étude a pour objectif d’analyser les comportements des directeurs à l’adoption de la stratégie de diversification et les effets de ces comportements sur la mise en œuvre stratégique. Nous avons étudié dans ce travail quatre comportements des directeurs : la sécurité perçue de l’emploi, le niveau d’engagement, la rémunération exigée et la promotion. Utilisant l’analyse de la variance, les résultats montent que la nature de la diversification influence seulement le niveau d’engagement des directeurs et la rémunération qu’ils exigent à l’adoption de la stratégie de diversification. Par contre, il apparait que, à travers l’analyse de régression, tous ces comportements ont un effet positif sur le degré de réussite de la mise en œuvre stratégique, suggérant ainsi que l’évaluation du projet de diversification doit prendre en compte, non seulement les coûts réels, mais aussi les coûts éventuels dus à l’insatisfaction des responsables fonctionnels et régionaux de l’entreprise.

Article

Full-text available

Jan 2023
PLOS ONE

Multiproduct firms often diversify into technologically related activities to exploit efficiencies of joint production; however, unrelated products in the company’s portfolio provide access to distinct markets and can help to avoid industry-specific shocks. Yet, the underlying mechanisms of related and unrelated diversification are still poorly understood. Here we investigate diversification decisions of firms in periods when corporations’ markets are hit by a demand shocks. In these times, cost efficiency considerations might drive firms to reduce costs by narrowing product portfolios and focusing on combinations of technologically related products, in which economies of scope and mutual capabilities can be exploited. To test this hypothesis, we consider two measures of demand shocks, decreasing sales volumes on the product market and increasing import competition; and analyze their association with changes of product portfolios of Hungarian firms in the 2003-2012 period. We find that production has become more coherent in terms of technological relatedness after firms were exposed to demand shocks. Evidence suggests related adjustment of firm production after demand shocks such that products unrelated to firms’ core product are dropped from the portfolio but related products are added.

Evaluating multilevel resilience of Russian urban economies 2010–2019

Article

Full-text available

Dec 2022
ECOL SOC

In this paper we examine the coevolution of individual cities and the city networks to which they belong, during aneconomic shock. We take an individual city and its city network to be the meso and macro levels, respectively, of a social-economicsystem. Focusing on the economic shocks felt by Russian cities in 2014 following the Ukrainian conflict, we demonstrate that the sameshock had different effects at the meso level (a city’s employment structure) and macro level (a city’s interfirm linkages to other cities,both national and international). To explain our findings, we draw on panarchy theory to propose a multilevel perspective of resiliencethrough the coevolution of adaptive cycles at the meso and macro levels of urban economies. To evaluate resilience at each level, wefirst operationalize the panarchy concept of connectedness using a previously developed metric called “tightness,” which quantifies theinterdependencies among economic activities. We next operationalize the panarchy concept of potential by measuring a city’s degreeof economic specialization. At the meso level, we find that larger cities suffered less employment loss than smaller cities during theshock and that by 2019 the structure of the meso level had largely returned to its 2010 structure. On the other hand, at the macro level,we found that the 2019 macro level structure changed considerably from 2010. Thus, we show that the meso level was disturbed butreturned to a previous state (engineering resilience) while the macro level transitioned to a new state (ecological resilience). Resultssuggest that policy makers would benefit from distinguishing between the meso and macro levels, enabling the development of multilevelurban policies to address future shocks.

Diversification relatedness and economic performance: does the resource plasticity channel matter?

Article

Full-text available

Jan 2022

Los grupos económicos en México a partir de una tipología de arquitectura y gobierno corporativos. Una revisión de sus explicaciones teóricas

Article

Jan 2011

Rubén Chavarín Rodríguez

En este artículo se desarrolla una tipología de arquitectura y gobierno corporativos con el fin de analizar a los grupos económicos mexicanos. La tipología ayuda a comprender la evolución de las redes de negocios mexicanas hacia una coordinación centralizada de las empresas; también ayuda a entender cómo los cambios en el gobierno corporativo han tendido a preservar un estado de pocos contrapesos en las decisiones de los accionistas mayoritarios. Asimismo, el artículo presenta una revisión teórica que proporciona un conjunto de posibles explicaciones de la formación y funcionamiento de los grupos económicos. Esta revisión permite valorar las ventajas analíticas de un enfoque socioeconómico que interpreta a estas redes de negocios a partir de la interacción entre factores socioculturales, institucionales y económicos, lo que aporta una base teórica para comprender la persistencia histórica de este sistema de negocios en México y otros países.

In Pursuit Of Diversification Opportunities, Efficiency, And Revenue Diversification: A Generalization And Extension For Social Entrepreneurship

Article

Full-text available

Oct 2022

Research Summary Our study generalizes and extends a cumulative body of research on diversification into the contexts of social entrepreneurship. We examine the extent to which internationalization and program diversification affect a coveted, yet understudied, outcome for social organizations—revenue diversification—and investigate efficiency as a boundary condition of those relationships. Our longitudinal analyses, based on roughly 53,000 observations of Canadian nonprofits that engage in social entrepreneurship, indicate that program diversification is positively related to nonprofits' revenue diversification, but internationalization is not. Further, we found that efficiency compliments these relationships. Our findings are partially in line with research from the for‐profit literature, but also extend this line of research by suggesting that different types of diversification are associated with revenue diversification in the context of social entrepreneurship. Managerial Summary Founders, executives, and managers of social organizations often strategically design and implement programs and internationalization strategies to achieve better organizational outcomes. Our results reveal that pursuing program diversification opportunities are related to revenue diversification and that highly efficient nonprofits are more likely to increase their revenue diversification as they pursue more program diversification and internationalization opportunities. Social entrepreneurs and their organizations may therefore learn from, build upon, and to some degree tailor theories and strategies of for‐profit organizations to better serve their social and environmental mission and ensure long‐term financial stability.

Peripheral financialisation and monopoly capitalism in Nigeria: the case of the Dangote Business Group

Article

Sep 2022

This article examines financialisation of non-financial corporations (NFCs) in developing countries using the example of the Dangote Business Group in Nigeria, the largest conglomerate on the Nigeria Stock Exchange (NSE). Our findings suggest that Nigeria is characterised by a financialisation process, where speculative activities expand in banking and capital markets, but not in manufacturing NFCs. Macro-financialisation in banking and capital markets does little to provide finance for Nigeria’s manufacturing NFCs. In the face of insufficient financing from banks and the capital market, NFCs rely on internal funding and trade credit within diversified business groups (DBGs). At the firm level, the financial accounts of Nigerian manufacturing NFCs such as the Dangote Group show weak evidence of speculative financial activities and high levels of investment in productive capacity. This results from a combination of volatile capital markets with excessive risk for NFCs and profitable opportunities in the real economy. While these two factors curtail the negative implications of speculative macro-financial activities, monopoly capitalist concentration processes in DBGs work to undermine effective demand through the disproportionate allocation of profit at the expense of wages.

Nowhere to hide: Response of corporate restructuring activities to mandatory segment disclosure

Article

Full-text available

Jul 2022
J CORP FINANC

We examine the effect of mandatory financial disclosures, specifically SFAS 131, on corporate restructuring activities by using difference-in-differences (DiD) and regression discontinuity design (RDD) settings. After the adoption of SFAS 131, firms are less likely to engage in acquisitions than are the control firms. Furthermore, conditional on firms' engagement in acquisition activities, acquirers are less likely to complete their initiated acquisition deals, especially for those value-destroying deals. After the implementation of SFAS 131, we find that the equity market reacts positively to large and diversifying deals that are subject to mandatory segment disclosures. Overall, our results suggest that the segment disclosure standard helped prevent managers from undertaking new, value-destroying M&As post-SFAS 131. Finally, these SFAS 131–induced corporate restructuring activities are shown to help reduce the risk of a stock price crash.

Analyse des déterminants de la stratégie de diversification de Cevital agro-industrie

Article

Full-text available

Jul 2022

La recherche vise à analyser les déterminants de la stratégie de diversification de cevital agro-industrie. Les données ont été collectées par le biais d'entretiens semi directifs et ont fait l'objet d'une analyse de contenu thématique selon l'approche de Paillé et Muchelli. Nous avons conclu que l'excédent de ressources et la recherche d'économie d'envergure et de transaction sont les principaux déterminants de la stratégie de diversification de cevital agro-industrie.

Analyse d’un écosystème d’innovation territorial : le cas de Niort TechAnalysis of a Territorial Innovation Ecosystem: The Case of Niort TechAnálisis de un ecosistema de innovación territorial: el caso de Niort Tech

Article

Jan 2021

Diversification Decisions of Family SMEs under Uncertainty: Goals as a Rule of Thumb

Article

Aug 2023

Leveraging on the behavioural mixed gamble lens, we contend that heterogeneity in organisational goals leads to different diversification behaviours in family firms. Using survey and archival data on a sample of 988 family SMEs homogenous in their (high) family involvement level, we show that family SMEs that pursue nonfinancial (financial) goals exhibit lower (higher) probability of extending the boundaries of the firm to new product and/or market domains. Interestingly, in the face of threats, only those family SMEs that prioritise financial goals exacerbate their propensity to diversify, while increased vulnerability leads to an even lower probability of adopting diversification decisions among family SMEs with nonfinancial goals.

Organization Capital and Labor Investment Efficiency

Article

Jan 2021

Strategic Orientation, Corporate strategy and firm performance: The case of Wilderness Holdings Limited

Article

Full-text available

Jun 2021

Jaloni Pansiri

This study investigates the growth of Wilderness Holdings Limited from its inception in 1983 to its entry into international markets. Using document analysis, the study identifies strategic orientation, and new market entry as two major ‘tipping points’ critical to WHL growth. This study found that WHL used vertical integration, acquisitions, downscoping, strategic alliances and partnerships to propel new market entry into eight countries in Africa. Its growth over the years was complex and possibly unique to itself specifically in respect to how downscoping and acquisition can be used together to propel growth. From a loss of BWP4, 967,000 in 2009, WHL’s profits reached BWP62, 751,000 in 2018. While WHL’s strategy may not be copied, it is essential for firms to blend different strategies in a manner that would lead to growth. However, the limitation of the WHL’s strategy is that it ultimately leads to over-diversification, unless downscoping is equally intensified.

ASSESSING THE IMPACT OF DIVERSIFICATION STRATEGIES ON THE FINANCIAL PERFORMANCE OF NON-FINANCIAL FIRMS: EVIDENCE FROM THE GHANA STOCK EXCHANGE

Article

Full-text available

Jan 2025

The impact of geographical and product diversification on the financial performance of non-financial enterprises listed on the Ghana stock exchange is investigated in this study. The objective is to find out how various diversification measures affect the profitability of the company. The research used a number of statistical methods, such as correlation and multiple regression analyses, using data gathered from a cross-section of businesses outside of the banking sector. Distributing resources across different product lines might not boost profitability, according to the results, which show that product diversification hurts financial performance. However, geographical diversification was found to have a positive effect, albeit relatively modest, indicating that expanding into new geographic markets can contribute to enhanced firm competitiveness and value creation. These findings add to what is already known about the relationship between company diversity and financial performance, and they show how important it is for managers to weigh the pros and cons of various diversification techniques. The study emphasizes the importance of considering industry and market characteristics when making strategic decisions regarding diversification.

Social software and strategy

Preprint

Mar 2018

Aligning interests, motivating contributions to knowledge work, and giving direction to multiple business units and market initiatives represent daily challenges facing the strategist in most companies. The diversity of contexts within an organization has thus led critical management thinkers to suggest that in the presence of multiple initiatives and discourses, the introduction of a new technology has multiple unintended consequences for organization. New technology is regularly subject to power struggles, conflicting goals, and discrepant events (Markus, 1983; Barley, 1986; Orlikowski, 1992; Ciborra, 1996; Leonardi, 2008) which impact on how strategies are shaped within organizations.

Beyond Internal Control over Financial Reporting: The Chinese Experience

Book

Nov 2023

Daoguang Yang

EFFECT OF STRATEGIC POSITIONING ON FIRM PERFORMANCE: A SURVEY OF CONTAINER FREIGHT STATION OPERATORS IN MOMBASA COUNTY, KENYA

Article

Full-text available

Apr 2019

EFFECT OF CORPORATE DIVERSIFICATION STRATEGY ON CORPORATE PERFORMANCE OF HASHI ENERGY (K) LTD

Article

Full-text available

Apr 2019

CEO Compensation and Firms Performance: An Empirical Investigation of India Panel Data

Article

Full-text available

Jun 2023

CEO Compensation and Firms Performance: An Empirical Investigation of India Panel Data

Article

Full-text available

Jun 2023

Diversification is not a new phenomenon in emerging economies like India. However, in the contemporary environment, it has become more important for a firm to go for intensive market research and take a calculated risk before diversifying, to sustain itself in the competitive market scenario. Several corporate failures in the Indian market have given reason to think about the structure of corporate governance in focussed and diversified firms. Hence the link between the firm's corporate governance mechanisms and the value of diversification is yet to be established in the Indian context. The level of CEO compensation in diversified firms is greater than focused firms (Martinez and Alvarez, 2019), but the gap still exists in the Indian context, that whether sensitivity to CEO pay does increase firm market performance (Utami and Kusuma, 2019) which also required to study. This paper presents the results of the empirical analysis on the relationship between CEO compensation, firm's performance, and agency costs in focussed and diversified firms listed in BSE 500.

Adopting strategic diversification measures and organizational performance in manufacturing concerns: an empirical overview

Article

Jan 2023

Jonah Ojiru

The study was on strategic diversification measures and organizational performance. Two research questions were raised to guide the study. The study was anchored on the cost transaction theory. Also, a sample size of 217 was determined using the right statistical formula. Findings revealed a positive relationship between product and geographical diversification on performance. Recommendations and conclusions were drawn along that line.

Diversification Strategies of Large Business Groups in the Philippines

Article

Full-text available

Jan 2013

This paper describes the diversification strategies of 11 major Philippine business groups. First, it reviews the benefits and drawbacks of related and unrelated diversification from the literature. Then, it describes the forms of diversification being pursued by some of the large Philippine business groups. The paper ends with possible explanations for the patterns of diversification in these Philippine business groups and identifies directions for future research.

PENGARUH LEVEL DIVERSIFIKASI, JUMLAH SEGMEN, DAN JENIS SEKTOR INDUSTRI TERHADAP KINERJA PERUSAHAAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2016 â€“ 2018

Article

Aug 2020

The high competition in the business world with many competitors has forced the company to develop its business, one of them by diversification. This study aims to investigate the influence of diversification level, segment numbers, and industrial sector types on firm performance measured by the excess value. The theory underlying this research is agency theory, which describes the relationship between the company owner with the company management, The number of samples of this study are 333 companies from miscellaneous industry sector, and consumer goods sector, and basic industry and chemicals sector listed on the Indonesia Stock Exchange throughout 2017 â€“ 2018. The results showed that data can be pooled for 3 years, all classic assumption tests are fulfilled, and partial regression coefficient test found that variable diversification level and variable number of segments > 0.05, then Ho1 and Ho2 rejected, while type of miscellaneous industry sector and Type of consumer goods sector <0.05, then Ho3 and Ho4 received. The conclusion showed that variable diversification level and variable number of segments has not sufficient evidence of negative effect on excess value, while type of miscellaneous industry sector and Type of consumer goods sector sufficient evidence of negative effect on excess value. Keywords: Firm Performance, Diversification Level, Number of Segments, and Industrial Sector. References: Amyulianthy, R., & Nuraini, Sari. (2013), â€œPengaruh Diversifikasi Terhadap Kinerja Perusahaanâ€, Binus Business Review, Vol.4, no.1, pp.215â€“230. Berger, P. G., & Eli, O. (1995), â€œDiversificationâ€™s Effect on Firm Valueâ€, Journal of Financial Economics, Vol.37, pp.39â€“65. Bowerman, B. L., Oâ€™Connell, R. T., & Murphree, E. S. (1979), Business Statistics in Practice, Edisi 7, New York: McGraw-Hill/Irwin. Chandra, D., & Triyani, Y. (2015), â€œPengaruh Level Diversifikasi, Leverage, Return On Asset, Umur Perusahaan, Dan Sektor Industri Terhadap Nilai Perusahaan Yang Terdaftar Di BEI Periode 2009-2011â€, Jurnal Akuntansi Manajemen, Vol.4, no.2, pp.66â€“84. Cooper, D. R., & Schindler, P. S. (2013), Business Research Methods, Edisi 12, New York: McGraw-Hill. 'Diversifikasi Usaha, Unilever Masuk Bisnis Saus Sambal' (2018), CNBC Indonesia, 28 September, diakses 9 Oktober 2019, https://www.cnbcindonesia.com/market/20180928100757-17-35152/diversifikasi-usaha-unilever-masuk-bisnis-saus-sambal Ghozali, I. (2013), Aplikasi Analisis Multivariette Dengan Program IBM SPSS 23, Edisi 8, Semarang: Badan Penerbit Universitas Diponegoro. Gujarati, D., & Dawn, P. (2009), Basic Econometrics, Edisi 4, New York: McGraw-Hill. Harto, P. (2005), â€œKebijakan Diversifikasi Perusahaan Dan Pengaruhnya Terhadap Kinerja: Studi Empiris Pada Perusahaan Publik Di Indonesiaâ€, SNA VIII Solo, pp.297-307. Ikatan Akuntan Indonesia (2014), Standar Akuntansi Keuangan, Jakarta: Salemba Empat. Jensen, M. C., & William, H. M. (1976), "Theory of The Firm: Managerial Behavior, Agency Cost and Ownership Structure", Journal of Financial Economic, Vol.3, No.4, pp.1-75. Kamus Besar Bahasa Indonesia. 2014. â€œKamus Besar Bahasa Indonesia Onlineâ€, diakses 5 Oktober 2019 http://www.kbbi.web.id. Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2016), Intermediate Accounting, Edisi 16, John Wiley and Sons, Inc. Lucyanda, J., & Wardhani, R. H. K. (2017), â€œPengaruh Diversifikasi Dan Karakteristik Perusahaan Terhadap Kinerja Perusahaanâ€, Jurnal Riset Akuntansi dan Keuangan. Montgomery, Cynthia A. (1994), Corporate Diversification, Journal of Economic Perspectives, Vol.8, No.3, pp.163-178. Rani, P. (2015). â€œPeran Kepemilikan Manajerial Dalam Memoderasi Pengaruh Strategi Diversifikasi Terhadap Kinerja Perusahaanâ€, Jurnal Akuntansi dan Keuangan, Vol.4, no.2, pp.162â€“82. Salindeho, A. O., Ivonne, S. S., & Joubert, B. M. (2018), â€œPengaruh Diversifikasi Usaha Terhadap Kinerja Keuangan Dan Return Saham Study Kasus Pada Perusahaan Manufaktur Automotive and Effect of Business Diversification of Financial Performance and Return Stock Case Stock in Automotive and Component Manufacturingâ€, Jurnal Riset Akuntansi dan Keuangan, Vol.6, no.3, pp.1078â€“87. Sari, I. A., Wiratno, A., & Suyono, E. (2014), â€œPengaruh Strategi Diversifikasi Dan Karakteristik Perusahaan Terhadap Kinerja Perusahaanâ€, JAFFA (Journal of Auditing, Finance, and Forensic Accounting), Vol.02, no.1, pp.13â€“22. Scott, W. R. (2015), Financial Accounting Theory, Edisi 7, Toronto: Pearson Canada Inc. Setionoputri, A., Meiden, C., & Siagian, D. (2007), â€œPengaruh Diversifikasi Korporat Terhadap Excess Value Perusahaan Manufaktur, Perdagangan Grosir Dan Eceran, Serta Properti Dan Real Estate Yang Terdaftar Di BEI Tahun 2005-2007â€ Bidang Akuntansi Private: Akuntansi Keuangan dan Pasar Modal, pp.1â€“25. Satoto, S. S. (2009), â€œStrategi Diversifikasi Terhadap Kinerja Perusahaanâ€, Jurnal Keuangan dan Perbankan, Vol.13, no.2, pp.280â€“287. Spence, M. (2002), â€œSignaling in Retrospect and the Informational Structure of Marketsâ€, American Economic Review, Vol.92, no.3, pp.434â€“459. Thompson, A. J. G., & Peteraf, M. (2012), Crafting and Executing Strategy: Concept and Cases, Edisi 18, New York: McGraw Hill. Virginia, Y. M., & Ratnasih, C. (2017), â€œPengaruh Lingkungan Kerja Dan Stres Kerja Terhadap Produktivitas Kerja Dan Berimplikasi Pada Kinerja Karyawanâ€, Journal of Chemical Information and Modeling, Vol.53, no.9, pp.1689â€“99. Wolk, H. I., Dodd, J. L., & Tearney, M. G. (2003), Accounting Theory: Conceptual Issues in a Political and Economic Environment, Edisi 6, Mason: South-Western College Pub.

EFFECT OF CORPORATE DIVERSIFICATION STRATEGIES ON PERFORMANCE OF INSURANCE FIRMS IN KENYA EFFECT OF CORPORATE DIVERSIFICATION STRATEGIES ON PERFORMANCE OF INSURANCE FIRMS IN KENYA

Article

Full-text available

Feb 2022

The main aim of this research project was to analyze how diversification strategy affects the performance of insurance firms in Kenya. The following objectives were used to provide guidance; to determine the significance of vertical diversification strategy on performance of insurance firms in Kenya, to study the effect of horizontal diversification strategy on performance of insurance firms in Kenya, to establish the effect of concentric diversification strategy on performance of insurance firms in Kenya and to establish the effect of conglomerate diversification strategy on performance of insurance firms in Kenya. The research adopted the modern portfolio theory, Ansoff market growth theory, the agency theory and performance maximization theory. A descriptive survey design was used in this research. The study population was the 54 insurance firms in Kenya. The target respondents were the chief finance officers or their representatives. Both secondary and primary data was utilized. Primary data was obtained using questionnaires which were administered through both drop and pick later method and email. Data was analysed using both descriptive statistics such as mean and standard deviation and inferential statistics which included correlation and regression analysis. The study revealed a significant positive relationship between horizontal diversification, vertical diversification, concentric diversification, conglomerate diversification, and performance of insurance firms in Kenya. Its regression analysis revealed that 45.6% of changes in performance of these firms were attributed to the collective use of the diversification strategies. This study concluded that diversification strategies are essential strategies for firms to use in their endeavor to improve on their performance levels. Based on the findings, horizontal diversification strategy had the greatest influence on performance followed by concentric while conglomerate and vertical diversification had the least influence on performance of insurance firms in Kenya. It was therefore recommended that managers and shareholders of the firms that are yet to diversify their portfolio should diversify to remain competitive and profitable in this turbulent business environment. It was further recommended that management of the insurance firms should come up with sound policies to guide them when diversifying.

Bankruptcy Risk Levels and their Main Determinants of Acquired Listed Companies in Cyprus

Article

Dec 2020

The objective of this study is to explore the course of the bankruptcy risk levels of acquired companies listed in Cyprus Stock Exchange. Mergers and acquisitions increase in number and value in contemporary global economy, yet with uncertain outcomes as the risk of realizing loses out of these agreements is often. Past research confirms that the level of performance following mergers and acquisitions is often lower than before. The originality of this study is that it explores the levels of bankruptcy risk following acquisitions rather than just the performance of acquired companies, and in that this is the first study in the marker of Cyprus. Altman’s Z score is used as a method to evaluate the levels of bankruptcy risk for a five years post-acquisition period. In addition, this study explores the level of influence of current ratio (CR), debt ratio (DR) and net profit analysis (NPA) to the course of the Z score values, using both Pearson correlations and holistic approach. The findings suggest that the levels of bankruptcy risk of the acquired companies increase in the period examined, and that this increase is mainly the result of changes to the current ratio (85%) and to the debt ratio (69%), rather than to profitability. Moreover, there are strong indications that the current is the main influence upon the levels of risk at the start of the post-acquisition period, gradually losing its lead to debt ratio.

STRATEGIC FORECAST OF MULTIFACTORIAL IMPACT ON THE EFFICIENCY OF DIVERSIFIED ENTERPRISES

Article

Full-text available

Nov 2021

The purpose of the present scientific research is to perform a strategic forecast of multifactorial impact on the efficiency of diversified enterprises, construction of a multifactorial linear regression model of strategic forecast of profitability level of the studied enterprises, as well as a multifactorial model of logistic regression of strategic forecast of low profitability risks as a result of implementation of innovative strategies of diversified enterprises’ development of in the long run. To achieve this purpose, the main criteria were ranked (Kruskal — Wallis ranking criteria (KWC) to assess the differences between the medians of different samples (c > 2), where KWC is a nonparametric alternative to the F-criterion in the one-factor analysis of variance. If the conditions necessary for the application of the F-criterion in multivariate variance-regression analysis are met, the KWC has the same influence. To build the models, the method of construction of multifactor models of logistic regression with step-by-step inclusion/exclusion of features was used (Stepwise with the inclusion threshold p < 0.1 and the exclusion threshold p > 0.2). The research was conducted on the basis of data from the State Statistics Committee and on the basis of data analysis of the surveyed agro-industrial enterprises. Strategic forecast of the results of multifactorial impact on the efficiency of diversified enterprises was made, based on the formation of a rational management structure of innovative strategies for the development of diversified agro-industrial enterprises. The obtained results allowed to obtain the median indicators of the general set of research objects and a clear bifurcation picture of the strategic development of enterprises for the future. A methodical approach to the implementation of strategic forecasting of multifactorial impact on the efficiency of diversified enterprises, based on the development of strategic guidelines for diversified enterprises taking into account the system of restraining factors of innovative development. This allowed to establish that selection and development of innovative strategies assessment of compliance of internal capabilities of the enterprise (potential of innovative development) with external (market opportunities and threats), with regard to the pace of scientific and technological progress and the resulting change in the elements of micro- and macrosystems of the infrastructure of the enterprise. The multifactorial analysis and construction of the multifactor model of linear regression of strategic forecast of agro-industrial enterprises’ profitability, as well as the multifactorial model of logistic regression of strategic forecast of low profitability risks probability have proved the usefulness of implementation of innovative strategies of competitiveness on domestic and foreign markets. Keywords: agro-industrial enterprise, diversified enterprise, innovative development strategy, optimal strategic decision, strategic forecast. JEL Classification С53, O13, O12 Formulas: 4; fig.: 9; tabl.: 4; bibl.: 33.

Organization Social Practice and Performance in the Kenya National Police Service: A Case of Central Police Division, Nairobi

Article

Full-text available

Oct 2021

The National Police Service of Kenya has gone through numerous transformations which are aimed at making it more effective and socially aligned to the needs of the Kenyan population. The transformation has seen the renaming of the policing unit from Kenyan Police Force to its current name. The Strategy such as renaming the institution to National Police Service implies that the institution is improving its commitment to improve service delivery to the citizens in a favorable social framework. However, minimal studies have been done to determine the existence of any relationship between organizational social practices and performance of the police institution. Therefore, the current study was formulated to establish the influence of organizational social practices on the performances of the National Police Service. The independent variables of the study included leadership style, organization structure, professionalism, and organization politics. Practice and system theories were reviewed alongside relevant sources of empirical literatures were reviewed to give the current studies sound theoretical and empirical foundations. Descriptive research design was used to guide collection, analysis, and interpretation of the research data. Semi-structured questionnaires were used to collect quantitative and qualitative data was collected from 150 police officers who were purposively sampled from Central Police Division in Nairobi County. A combination of descriptive and inferential analyses were performed to establish the current trends of the study variables and relationships thereof. The study found out that the respondents were in agreement with almost statements on the four organizational social practices including leadership style, organization structure, and professionalism and organization politics. Leadership style and professionalism were established to have the highest impact (0.300; p= 0.000) and the least impact (0.093; p=0.000) respectively. Organization politics, on the other hand had a significant negative impact (-0.254; p=0.001) on the NPS performance. The study concludes that the main belief or attitude influencing leadership style is the perceived manager versus subordinates’ role. Effective decision making is improved by decentralization, narrow control span and efficiency relate positively, task routine positively and negatively affect productivity. A respectful culture is fostered by professionalism, which ensure proper handling of conflicts. Boundaries are clearly understood and minor issues solve efficiently and respectfully by professional employees. Workers are motivated with the hope that there won’t be hampering of their interest due to existence of organizational politics. Employee’s indiscipline may be resisted by the organizational politics’ help. The study recommends that transactional and transformative leadership be embraced by national police service to assist in tapping the workers’ potential, they should be involved in making decisions and new idea be welcomed into the system for positive contribution to the entities’ exponential performance. National police service should adopt an efficient, simple and universally accepted organizational structure. Employees at national police service should exercise workplace expectations and rules by following all workplace rules, completing all projects and tasks and understanding what is expected of them. Delegation of duties depending on employees’ academic achievements, specialization and interests. Transparency must be maintained at all levels to reduce politics.