EFFECT OF CORPORATE DIVERSIFICATION STRATEGY ON CORPORATE PERFORMANCE OF HASHI ENERGY (K) LTD
Abstract
The purpose of this study was to examine the effect of corporate diversification strategy on strategic performance of Hashi Energy Ltd. The study adopted a descriptive research design. The target population comprised 98 senior employees in the firm with knowledge on corporate diversification strategies. A sample of 87 respondents was obtained using formula proposed by Yamane. Data collection was done through the use of closed-ended questionnaires. Factor analysis was used to identify the underlying factors. Descriptive statistics was used to summarize the results for each of the main variables. Pilot study was carried out to determine the validity and reliability of data collection instruments. Data analysis was done using SPSS version 23 to generate quantitative reports which were presented in the form of tabulations, percentages, mean and standard deviation. The study showed a significant positive relationship between the predictor variables and corporate performance. The study concluded that diversifying into related business generated higher profit than diversifying into unrelated business. The study also concluded that horizontal mergers led to the consequence of a sudden increase in the quantity of output. The researcher concluded that firm had achieved conglomerate diversity through buying existing businesses rather than starting new operations from scratch. The study concluded that diversifying into unrelated business provided less incremental value. The study recommended that managers in the firm should invest in feasibility studies aimed at analyzing the factors that influence related diversification. The study also recommended that the company should conduct regular monitoring and evaluation intended to measure the effectiveness of the adopted diversification strategies.
Key terms: Diversification, Geographic diversification, Related diversification, Strategic performance, Unrelated diversification, Vertical diversification
CITATION: Ahmed, A. M., & Simba, F. (2019). Effect of corporate diversification strategy on corporate performance of Hashi Energy (K) Ltd. The Strategic Journal of Business & Change Management, 6 (2), 404 – 323.
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DOI: http://dx.doi.org/10.61426/sjbcm.v6i2.1125
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