Faculty Scholarship 1994 - Present

Diversification Strategies: Creating Value or Generating Profits?

The majority of studies within the strategy literature have sought to identify the strategy/performace linkage. However, there is very little consensus on the subject after all of this effort (Dess, Gupta, Hennart, & Hill, 1995). Part of the reason for such confusion may rest in the operationalization of the concept of firm performance. Given a number of different types of measures it can be concluded that some of the inconsistencies may be attributable to differences in perspectives. It is suggested that previous research in the field of strategy may have been influenced by the type of performance measures used. Results suggest that potential biases may indeed exist.