Faculty Scholarship 1994 - Present

Broadening the View of Corporate Diversification: An International Perspective

The relationship between diversification and organizational performance has been the subject of numerous studies over the years. However, strategy scholars have universally defined diversification using a narrow definition, namely that corporate diversification is a function or reflection of the number of products/businesses in a firm's portfolio. The present study argues that such a definition has become outdate given the impact of international market diversification. Integrating these two views of corporate diversification, we investigate diversification-performance differences using market- and product- based measures of diversification and an international sample. Results suggest that the traditional model of diversification may not be applicable to all countries and that international differences exist.