DIVERSIFICATION AND PERFORMANCE: A REEXAMINATION USING A NEW TWO-DIMENSIONAL CONCEPTUALIZATION OF DIVERSITY IN FIRMS.

1 June 1987

journal article
Published by Academy of Management in The Academy of Management Journal

Vol. 30 (2) , 380-393
https://doi.org/10.2307/256281

Abstract

The article discusses a study which examines the linkage between diversity and performance using a two-dimensional conceptualization of diversity in business enterprises. Methods for measuring diversity are considered. The 1974 work of Richard P. Rumelt is cited for pioneering research into the subject. Two patterns of diversification - narrow spectrum diversification (NSD) and broad spectrum diversification (BSD) are defined according to industry classifications. A sample of U.S. firms are analyzed, revealing systematic differences in risk across several categories of diversification.

Keywords

BUSINESS ENTERPRISES
PERFORMANCE
INDUSTRIES -- CLASSIFICATION
DIVERSIFIED COMPANIES
DIVERSIFICATION IN INDUSTRY
BUSINESS ENTERPRISES -- UNITED STATES
SEPARATE LINES OF BUSINESS
MANAGEMENT
FINANCIAL PERFORMANCE
CATEGORIZATION (LINGUISTICS)

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