The role of corporate synergy accomplishment in determining performance of diversification strategies
by Alok Srivastava, Suresh S. Prabhu
International Journal of Technology Management (IJTM), Vol. 12, No. 1, 1996

Abstract: This study investigated the diversification-performance relationship for two five-year time periods. Although, there was no difference in the long-term performance of firms pursuing different strategies, improvements in long-term performance on both profitability and risk dimensions were possible for those firms that exploited unique advantages associated with their strategy. Portfolio synergy (risk education) was found to be a key determinant of total synergy (increase in profitability) for all diversification strategies. Direct synergies representing production and technical economies were associated with related constrained and related linked categories. Accomplishment of synergy is suggested as the moderating factor that influences the direction of the strategy-performance relationship. Implications for the practising manager are that diversification, irrespective of the type of diversification, can result in creating value for the diversifying firm. However, such value creation is determined by the level of exploitation of the unique advantages associated with each strategy, like various synergies.

Online publication date: Fri, 22-May-2009

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Technology Management (IJTM):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?


Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com