IMPACT OF DIVERSIFICATION STRATEGIES ON ORGANISATIONAL PERFORMANCE IN THE MANUFACTURING INDUSTRY: A COMPARATIVE ANALYSIS OF RELATED AND UNRELATED DIVERSIFICATION
Abstract
This study investigates the effects of related and unrelated diversification strategies on organisational performance within the Nigerian manufacturing sector. A quantitative analysis of data from 750 respondents across eight manufacturing companies reveals that related diversification significantly enhances organisational performance, explaining approximately 42% of the variance. This strategy leverages core competencies and resources to improve market share and profitability. Conversely, unrelated diversification shows a negative impact on performance, accounting for about 22% of the variance, primarily due to challenges such as lack of synergy and increased management complexity. The comparative analysis underscores the strategic advantage of related diversification and highlights the risks of unrelated diversification. The unique contribution of this study lies in its detailed examination of how different diversification strategies affect organisational performance, offering practical insights for managers in the manufacturing sector to optimize their strategic approaches. The findings provide a clear distinction between the benefits of related diversification and the pitfalls of unrelated diversification, guiding future strategic decision-making in the industry.
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