IMPACTS OF DIVERSIFICATION ON THE PERFORMANCE OF SMES IN BENIN CITY, EDO STATE (A CASE STUDY OF NADIA BAKERY)
Abstract
This study examined impact of diversification on firm performance. There has been upsurge in business failure in Nigeria. Many have attributed management and financial inept as a major contributions. Many of these businesses focus on their core competences without desire to leverage on improved performance of their core competence and probably diversified into related or unrelated business for efficient performance. The objective of the study is to ascertain the impact of diversification on performance of Small and Medium Enterprises (SMEs) in Nigeria. The research design is both exploratory and descriptive. Primary data were elicited through the use of questionnaire. The result revealed that on a scale of 1-5, the profitability and performance level of the firm (Nadia Bakery) before diversification increase from fairly good to very good after diversification. It was recommended that SMEs must ensure it pursue diversification for continuous growth and consider divestiture when the organization resources are over stretched.
Keywords
Full Text:
PDFReferences
Ali, S., Hashmi, S.H. & Mehmood (2016). Corporate diversification and firm performance: An inverted u- shaped hypothesis. International Journal of organizational Leadership 5, 381-398
Amit, R & Livnat, J. (1988). Diversification strategies, Business cycles and Economic performance. Strategic Management Journal,8,99-110
Chandler, A. (1977). The visible hand. The Belknap press, Cambridge MA
Hitt, M., Ireland, R.& Hoskisson, R (2011). Strategic management competitiveness and globalization (4ed). Cincinnati OH: South- Western College Publishing
Jones, G.R &Hill, C.W (1988). Transaction cost analysis of strategy- structure choice. Strategic management Journal 9 (2), 159-172
Kemper, A & Khuen, F. (2004). Corporate restructuring dynamics: A case study analysis
http://www systemdynamics.org/conference/2004/SAS-2004/PAPERS/305KEMPE.pdf.
Kim, H., Hoskisson, R.E & Lee, S.H. (2014). Why strategic factor markets matter: New multinationals geographic diversification and firm profitability. Strategic Management Journal, 36(4), 518-536
Kim, Y.S & Mathur, I. (2008). The impact of geographical diversification on firm performance. International Review of Financial analysis 17 (4), 747-766
Lindgren, J. & Persson, F. (2005). Diversification and performance: The Nordic media market. Master thesis within strategy & finance
Lioyd, P.W & Jahera, S.J (1994). Firm diversification effects on performance as measured by Tobin’s q. Journal of Managerial and Decision Economics, 15, 259-266
Lu, J.W & Beamish, P.W. (2004). International diversification and firm performance: The S- curve hypothesis. Academy of Management Journal 47 (4), 598-609
Mc Cutcheon, B.J. (1991). What caused conglomerate formation? An examination of managerial behavior and internal capital markets in the 1960s conglomerates (unpublished doctorial dissertation). University of Chicago,US
Mehmood, R., Hunjra, A.I. & Chani, M.I. (2019). The impact of corporate diversification and financial structure on firm performance: Evidence from South Asian countries. Risk and Financial Management, 12 (49), 1-17
Oladimeji, M.S & Udosen, I. (2019). The effect of diversification strategy on organizational performance. Journal of Competitiveness, 11(4), 120-131
Pandya, M.A. & Rao, V.R. (1998). Diversification and firm performance: An empirical evaluation. Journal of Financial and Strategic Decisions, 11, 67-81
Park, K. & Jang, S. (2012). Effect of diversification on firm performance: Application of the entropy measure. International Journal of Hospitality Management 31(1), 218-228
Park, K. & Jang, S. (2013). Effects of within –industry diversification and related diversification strategies on firm performance. International Journal of Hospitality Management, 34, 51-60
Stagliano, R. & Rocca, M. (2011). Theoretical foundation of diversification decisions: opportunism or financial benefits. Corporate ownership and control, 1 (2), 37-45
Teece, D.J. (1980). Economic of scope and the scope of the enterprise. Journal of Economic Behavior and Organization 1 (3), 223-247
Wan, W.P. & Hoskisson, R.E. (2003). Home country environments, corporate diversification strategies and firm performance. Academy of Management Journal 46(1), 27-45
Refbacks
- There are currently no refbacks.
Copyright (c) 2021 Victor Amadin Idehen, Precious Yanetu Oyarebu-Shaibu
ISSN (PRINT): 2682 - 6135
ISSN (ONLINE): 2682 - 6127
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.