1. bookVolume 11 (2019): Issue 1 (March 2019)
Journal Details
License
Format
Journal
eISSN
2543-831X
First Published
25 Apr 2014
Publication timeframe
4 times per year
Languages
English
access type Open Access

The Diversification Strategy and Business Groups’ Performance in Poland

Published Online: 02 Jul 2019
Volume & Issue: Volume 11 (2019) - Issue 1 (March 2019)
Page range: 23 - 45
Journal Details
License
Format
Journal
eISSN
2543-831X
First Published
25 Apr 2014
Publication timeframe
4 times per year
Languages
English
Abstract

Objective: The aim of the study is to identify the scope in which business groups in Poland apply the diversification strategy and examine it influence on the performance of a business group.

Methodology: The research method is a critical analysis of academic literature as well as documents analysis (desk research). Authors applied also statistical inference.

Findings: Conducted research on business groups in Poland showed that business groups in Poland are moderately diversified. The study showed also that the diversification strategy does not differentiate the performance of business groups.

Value Added: The paper is a unique summary of the researches about diversification strategy and business group performance. The theory review and empirical studies deepen research on business groups and their strategies.

Recommendations: It is recommended for business groups to explore the diversification strategies in the context of performance as implementing it may be crucial for further business group development.

Keywords

JEL Classification

Advasheva, S. (2008).Impact of mergers and business groups on the structure of Russian transition markets and competition. 10th EACES Conference. Moscow, 28–30 August.Search in Google Scholar

Aluchna, M. (2010).Kierunki rozwoju polskich grup kapitałowych. Perspektywa mię-dzynarodowa. Warszawa: Oficyna Wydawnicza SGH w Warszawie.Search in Google Scholar

Ansoff, H. I. (1957). Strategies for diversification. Harvard Business Review, 35(2), 113–124.Search in Google Scholar

Aswicahyono, H. (2000). How not to industrialise? Indonesia’s automotive industry. Bulletin of Indonesian Economic Studies, 36(1), 209–241.10.1080/00074910012331337843Search in Google Scholar

Bidgoli, H. (ed.) (2010).The handbook of technology management. Volume 2. Bakersfield: John Wiley & Sons.Search in Google Scholar

Cainelli, G., & Iacobucci, D. (2011). Business groups and the boundaries of the firm. Management Decision, 49(9), 1549–1573.10.1108/00251741111173989Search in Google Scholar

Chandler, A. D. (1997). Strategy and structure, In N.J. Foss (Ed.), Resources firms and strategies. A reader in the resource-based perspective. New York: Oxford University Press.Search in Google Scholar

Ching-Pu, Ch., & Chen, H. (2009). A proposed perspective inspired by entropy on diversification, corporate performance and risk. International Journal of Organizational Innovation, 2(1), 53–68.Search in Google Scholar

Delios, A., & Beamish, P. W. (1999). Geographic scope, product diversification and the corporate performance of Japanese firms. Strategic Management Journal, 20(8), 711–727.10.1002/(SICI)1097-0266(199908)20:8<711::AID-SMJ41>3.0.CO;2-8Search in Google Scholar

Dworzecki, Z., & Mierzejewska, W. (Eds.) (2015).Zachowania grup kapitałowych w czasie kryzysu. Warszawa: Oficyna Wydawnicza SGH w Warszawie.Search in Google Scholar

Financial Times (2018).Poland wins upgrade from EM status by FTSE Russell. Retrieved from: https://www.ft.com/content/b581df88-bfde-11e8-8d55-54197280d3f7.Search in Google Scholar

Franko, L. G. (2004). The death of diversification? The focusing of the world’s industrial firms, 1980–2000. Business Horizons, 47(4), 41–50.10.1016/S0007-6813(04)00047-3Search in Google Scholar

Gierszewska, G. (1998). Wpływ prywatyzacji polskich przedsiębiorstw na wzrost ich zdolności konkurencyjnych. In B. Wawrzyniak (Ed.), Raport o zarządzaniu. Polskie przedsiębiorstwa i menedżerowie wobec wyzwań XXI wieku. Warszawa: WSZiP.Search in Google Scholar

Geringer, J. M., Beamish, P. W., & DaCosta, R. C. (1989). Diversification Strategy and Internationalization: Implications for MNE Performance. Strategic Management Journal, 10(2), 109–119.10.1002/smj.4250100202Search in Google Scholar

Grant, R. M. (2011)Współczesna analiza strategiczna. Warszawa: Wolters Kluwer.Search in Google Scholar

Harper, N. W. C., & Viguerie, S. P. (2002). Are you too focused?. The McKinsey Quarterly, 2, 29–37.Search in Google Scholar

Harris, M., Kriebel, C. H., & Raviv, A. (1982). Asymmetric information, incentives and intrafirm resource allocation. Management science, 28(6), 604–620.10.1287/mnsc.28.6.604Search in Google Scholar

Heugens, P. P., & Zyglidopoulos, S. C. (2008). From social ties to embedded competencies: the case of business groups. Journal of Management & Governance, 12(4), 325–341.10.1007/s10997-008-9064-7Search in Google Scholar

Hoskisson, R. E., Johnson, R.A., Tihanyi, L., & White, R. E. (2005). Diversified business groups and corporate refocusing in emerging economies. Journal of Management, 31(6), 941–965.10.1177/0149206305279895Search in Google Scholar

Jahera Jr, J. S., Lloyd, W. P., & Page, D. E. (1987). The Relationship between Financial Performance and Stock Market Based Measures of Corporate Diversification’. Financial Review, 22(4), 379–389.10.1111/j.1540-6288.1987.tb01261.xSearch in Google Scholar

Jarosiński, M. (2004). Dywersyfikacja produktowa i branżowa. In M. Romanowska (Ed.), Strategiczna transformacja polskich przedsiębiorstw. Warszawa: Oficyna Wydawnicza SGH w Warszawie.Search in Google Scholar

Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and take-overs. The American economic review, 76(2), 323–329.Search in Google Scholar

Khanna, T., & Palepu, K. (1997). Why focused strategies may be wrong for emerging markets. Harvard Business Review, 75(4), 41–51.Search in Google Scholar

Khanna, T., & Yafeh, Y. (2005). Business groups and risk sharing around the world. The Journal of Business, 78(1), 301–340.10.1086/426527Search in Google Scholar

Khanna, T., & Yafeh, Y. (2007). Business groups in emerging markets: Paragons or parasites? Journal of Economic Literature, 45(2), 331–372.10.1257/jel.45.2.331Search in Google Scholar

Lang, L. H., & Stulz, R. M. (1994). Tobin’s q, corporate diversification, and firm performance. Journal of political economy, 102(6), 1248–1280.10.1086/261970Search in Google Scholar

Lewellen, W. G. (1971). A pure financial rationale for the conglomerate merger. The journal of Finance, 26(2), 521–537.10.1111/j.1540-6261.1971.tb00912.xSearch in Google Scholar

Li, M., & Wong, Y. Y. (2003). Diversification and economic performance: An empirical assessment of Chinese firms. Asia Pacific Journal of Management, 20(2), 243–265.10.1023/A:1023804904383Search in Google Scholar

Lubatkin, M., Merchant, H., & Srinivasan, N. (1993). Construct validity of some unweighted product-count diversification measures. Strategic Management Journal, 14(6), 433–449.10.1002/smj.4250140604Search in Google Scholar

Markides, C. (1993). Corporate refocusing. Business Strategy Review, 4(1), 1–15.10.1111/j.1467-8616.1993.tb00038.xSearch in Google Scholar

Michel, A., & Shaker, I. (1984). Does business diversification affect performance? Financial Management, 13(6), 18–24.10.2307/3665297Search in Google Scholar

Mohindru, A., & Chander, S. (2007). Nature and extent of diversification: A comparative study of MNCs and domestic companies in India. South Asian Journal of Management, 14(2).Search in Google Scholar

Montgomery, C. A., & Wernerfelt, B. (1988). Diversification, Ricardian rents, and Tobin’s q. The Rand journal of economics, 19(4), 623–632.10.2307/2555461Search in Google Scholar

Nair, A., & Kotha, S. (2001). Does group membership matter? Evidence from the Japanese steel industry. Strategic Management Journal, 22(3), 221–235.10.1002/smj.154Search in Google Scholar

Palepu, K. (1985). Diversification strategy, profit performance and the entropy measure. Strategic Management Journal, 6(3), 239–255.10.1002/smj.4250060305Search in Google Scholar

Palich, L. E., Cardinal, L. B., & Miller, C. Ch. (2000). Curvilinearity in the diversification– performance linkage: an examination of over three decades of research. Strategic Management Journal, 21(2), 155–174.10.1002/(SICI)1097-0266(200002)21:2<155::AID-SMJ82>3.0.CO;2-2Search in Google Scholar

Pandya, A. M., & Rao, N. V. (1998). Diversification and firm performance: An empirical evaluation. Journal of financial and strategic decisions, 11(2), 67–81.Search in Google Scholar

Pitts, R. A., & Hopkins, H. D. (1982). Firm Diversity: Conceptualization and Measurement. The Academy of Management Review, 7(4), 620–629.10.2307/257229Search in Google Scholar

Porter, M. E. (1987). From competitive advantage to corporate strategy. Harvard Business Review, May-June, 43–59.Search in Google Scholar

Porter, M. E. (2001).Porter o konkurencji, Warszawa: PWE.Search in Google Scholar

Radygin, A. (2006). Corporate governance, integration and reorganisation: the contemporary trends of Russian corporate groups. Economic Change and Restructuring, 39(3–4), 261–323.10.1007/s10644-007-9012-6Search in Google Scholar

Rajan, R., Servaes, H., & Zingales, L. (2000). The cost of diversity: The diversification discount and inefficient investment. The journal of Finance, 55(1), 35–80.10.1111/0022-1082.00200Search in Google Scholar

Ramanujam, V., & Varadarajan, P. (1987). Diversification and performance: a reexamination using a new two-dimensional conceptualization of diversity in firms. Academy of Management Journal, 30(20), 380–393.Search in Google Scholar

Romanowska, M. (1998). Strategie grup kapitałowych w Polsce. In B. Wawrzyniak, M. Romanowska, M. Trocki (Eds.), Grupy kapitałowe w Polsce. Warszawa: Difin.Search in Google Scholar

Romanowska, M. (Ed.) (2011).Polskie grupy kapitałowe. Strategie i struktury. Warszawa: PWE.Search in Google Scholar

Romanowska, M. (2017).Planowanie strategiczne w przedsiębiorstwie. Warszawa: PWE.Search in Google Scholar

Rumelt, R. P. (1974).Strategy, structure, and economic performance. Boston and Cambridge: Harvard Business School Press.Search in Google Scholar

Rumelt R. P. (1982). Diversification strategy and profitability. Strategic Management Journal, 3(4), 359–369.10.1002/smj.4250030407Search in Google Scholar

Sasi, A. (2017). Top 5 firms’ output 16% of GDP. Retrieved from: http://www.business-standard.com/.Search in Google Scholar

Scott, B. R. (1973). Industrial state-old myths and new realities. Harvard Business Review, 51(2), 133–148.Search in Google Scholar

Suzuki, Y. (1980). The strategy and structure of top 100 Japanese industrial enterprises 1950-1970. Strategic Management Journal, 1(3), 265–291.10.1002/smj.4250010306Search in Google Scholar

Trocki, M. (2004).Grupy kapitałowe. Tworzenie i funkcjonowanie. Warszawa: PWN.Search in Google Scholar

Villalonga, B. (2004a). Diversification discount or premium? New evidence from the business information tracking series. The Journal of Finance, 59(2), 479–506.10.1111/j.1540-6261.2004.00640.xSearch in Google Scholar

Villalonga, B. (2004b). Does diversification cause the “diversification discount”?. Financial Management, 33(2), 5–27.Search in Google Scholar

Williamson, O. E. (1975).Markets and hierarchies. New York: Free Press.Search in Google Scholar

Wrigley, L. (1970). Divisional autonomy and diversification. Boston: Harvard University, by: Z. Pierścionek (2007), Strategie konkurencji i rozwoju przedsiębiorstwa. Warszawa: PWN.Search in Google Scholar

Yigit, I., & Behram, N. K. (2013). The relationship between diversification strategy and organizational performance in developed and emerging economy contexts: Evidence from Turkey and Netherlands. Eurasian Business Review, 3(2), 121–136.10.14208/ebr.2013.03.02.001Search in Google Scholar

Yiu, D. W., Lu, Y., Bruton, G. D., & Hoskisson, R. E. (2007). Business groups: An integrated model to focus future research. Journal of Management Studies, 44(8), 1551–1579.10.1111/j.1467-6486.2007.00735.xSearch in Google Scholar

Zelek, A. (2008).Strategie biznesu: od klasyki do postmodernizmu w zarządzaniu. Szczecin: Wydawnictwo Zachodniopomorskiej Szkoły Biznesu.Search in Google Scholar

Zhao, Z., Anand, J., & Mitchell, W. (2005). A dual networks perspective on inter-organizational transfer of R&D capabilities: international joint ventures in the Chinese automotive industry. Journal of Management Studies, 42(1), 127–160.10.1111/j.1467-6486.2005.00491.xSearch in Google Scholar

Zuckerman, E. W. (2000). Focusing the corporate product: Securities analysts and de-diversification. Administrative Science Quarterly, 45(3), 591–619.10.2307/2667110Search in Google Scholar

Recommended articles from Trend MD

Plan your remote conference with Sciendo