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Journal of Management and Governance
Published in: Journal of Management and Governance 3/2016

29-01-2015 | Reviews and overviews

Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry

Authors: Pasquale Massimo Picone, Giovanni Battista Dagnino

Published in: Journal of Management and Governance | Issue 3/2016

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Abstract

With the aim of achieving an advanced understanding of current research on unrelated diversification and providing fruitful groundwork to foster active interchange between disciplinary traditions, this paper detects articles from two relevant research streams; i.e., strategic management and financial economics. We first provide a brief overview of management thinking on unrelated diversification strategy. Then, we present a conceptual map that offers a comprehensive appreciation of unrelated diversification strategy antecedents (i.e., environmental and institutional, organizational value-enhancing, and managerial drivers), implementation process (i.e., managerial complexity, misallocation of resources, and structural inertia), and consequences (i.e., diversification premiums and discounts). Finally, we unpack the major gaps in our current knowledge that may help refocus the research agenda on unrelated diversification strategy and revamp the apparent waning proclivity of this issue.
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Footnotes
1
We observe that financial economics and strategic management have dissimilar preferences in using terminology. In strategic management, the expression “conglomerate diversification” came into disrepute in the 1990s, since when strategy researchers prefer to talk of “unrelated diversification.” Conversely, finance researchers are more comfortable with “conglomerate diversification” and frequently use the term synonymously with “unrelated diversification.” In fact, the management literature generally assumes that single-business, related, and unrelated diversification are equivalent to low, moderate, and high diversification, respectively. In this vein, Palich et al. (2000) observe that “it is very common for researchers to convert measures of type of diversification into continuous data representing levels of diversification” (p. 158).
 
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Metadata
Title
Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry
Authors
Pasquale Massimo Picone
Giovanni Battista Dagnino
Publication date
29-01-2015
Publisher
Springer US
Published in
Journal of Management and Governance / Issue 3/2016
Print ISSN: 1385-3457
Electronic ISSN: 1572-963X
DOI
https://doi.org/10.1007/s10997-014-9305-x

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