Publication Type
Journal Article
Version
publishedVersion
Publication Date
12-1988
Abstract
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.
Keywords
Diversity in the workplace, diversification in industry, performance management, causal models, international business enterprises, corporate profits, profit maximization, strategic planning
Discipline
Business | Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Academy of Management Journal
Volume
31
Issue
4
First Page
771
Last Page
802
ISSN
0001-4273
Identifier
10.2307/256338
Publisher
Academy of Management
Citation
GRANT, Robert M.; JAMMINE, Azar P.; and THOMAS, Howard.
Diversity, diversification and profitability among British manufacturing companies, 1972-1984. (1988). Academy of Management Journal. 31, (4), 771-802.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/1861
Copyright Owner and License
Publisher
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.5465/256338