The Relationship Between Diversification and the Managerial Performance: An Empiric Analysis.

Abstract

Purpose: To analyze the influence regarding the supposed superiority of the diversification strategy over the specialization strategy regarding business performance, as well as of the strategy of related diversification over the strategy of unrelated diversification on the managerial results. Methodology: The first is to analyze the existing theoretical evidence on these relationships through a broad review of the principle research that has dealt with the subject. The second is to contrast the previous ideas in order to contribute to the empirical evidence of such suppositions. The contrast is made on Spanish firm industry by using the SBS (Survey on Business Strategies) database for the period 1991 - 2002. Discoveries: Utilizing data panels, lineal regression and considering the commitment with the strategy, the results of the study show that there are no significant differences in the performances of the firms that follow strategies of diversification, and those which employ strategies of specialization, result contrary to the discovered among the firms that follow related and unrelated diversification. In a similar way, when using techniques for data panels it is observed that the diversification strategy and of related diversification they influence significantly on the managerial results. Originality: Exist few articles that analyze the relationship among corporate strategies and managerial performance applied to countries of smaller development, as the Spanish case.