The link between resources and type of diversification: theory and evidence

Article Abstract:

There has been much study of the association between corporate diversification and performance in the strategic management literature. A study was made to study hypotheses that postulate that corporations diversify in part in order to effectively utilize resources that are surplus in relation to current operations. Research results indicate a correlation between diversification and the resource profile of a corporation. Intangible and financial resources are the key variables in the course of diversification undertaken by a corporation. There is a correlation between unrelated diversification and long-term liquidity. High performance firms are more likely to use diversify in order to maximize resource utilization.

Diversification in industry, Industrial diversification

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Strategy and the research process: a reply

Article Abstract:

A reply to the criticism of Montgomery, Wernerfelt, and Balakrishnan's paper on strategy research (1989) by Anju Seth and George Zinkhan is presented. The authors failed to provide their own perspective on the field of strategy research and therefore it is difficult to interpret their criticism since the context is lacking. The authors couched their criticism in adversarial terms and assigned Montgomery, Wernerfelt, and Balakrishnan an extreme position. Such a methodology for argument is dangerous since it can discredit principles all may value. Students of strategy should specialize in another discipline in order to facilitate cross-disciplinary studies, a position different than that of the authors.

Military strategy, Seth, Anju, Zinkhan, George

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Technical change, competition and vertical integration

Article Abstract:

Existing theories of vertical integration are surveyed. These theories are then extended to argue that the possibility of technological obsolescence tends to make integration less effective. A model is developed which illustrates how the optimal level of integration is influenced by the interaction between technological change and intensity of competition. Data drawn from 93 industries support the predictions of the model.

Management, Organizational change, Strategic planning (Business), Vertical integration

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