Diversity, diversification and profitability among British manufacturing companies, 1972-1984

Diversity, diversification and profitability among British manufacturing companies, 1972-1984

This study investigated the causal relationships between diversity, diversification, and profitability among 304 large British manufacturing companies that differed in both product and multinational diversity. Diversity and profitability were positively related up to a point; after that point, incre...

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Bibliographic Details
Main Authors: GRANT, Robert M., JAMMINE, Azar P., THOMAS, Howard
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 1988
Subjects:
Diversity in the workplace
diversification in industry
performance management
causal models
international business enterprises
corporate profits
profit maximization
strategic planning
Business
Strategic Management Policy
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/1861
https://ink.library.smu.edu.sg/context/lkcsb_research/article/2860/viewcontent/256338.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:This study investigated the causal relationships between diversity, diversification, and profitability among 304 large British manufacturing companies that differed in both product and multinational diversity. Diversity and profitability were positively related up to a point; after that point, increases in product diversity were associated with declining profitability. The results were unclear with respect to the underlying causal relationships. Product diversification did not increase profitability, and there was limited evidence that profitability promoted diversification. For multinational diversification, however, we found that profitability in the home market encouraged overseas expansion that in turn increased profitability.

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