Abstract/Details

International diversification measurement: The consideration of international involvement and diversity in global strategic planning


1993 1993

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Abstract (summary)

Three broad questions were addressed in this study. First, should management consider the diversity in a firm's international operating environment when planning further international diversification? Second, why does the diversity factor deserve consideration? Third, how does one measure the amount of diversity in a firm's international operating environment? The objectives of this study were: (1) the introduction of the diversity construct into the measurement of international diversification, and (2) to obtain a better understanding of the relationships between international involvement, international diversity, and profit performance.

To reach these objectives, four relationships were investigated: (1) the relationship between the level of international involvement and the level of international diversity, (2) the relationship between international involvement and profit performance, (3) the relationship between international diversity and profit performance, and (4) the relationship between international diversity and profit performance while controlling for the level of international involvement.

International diversification was measured by gauging two factors: (1) the firm's degree of international involvement and (2) the firm's degree of international diversity. A firm's degree of diversity was measured as the sum of the home/host differences and the host/host differences using Hofstede's country specific index of differences in work-related values. The relationships between levels of international diversification and levels of profit performance were examined for 310 US manufacturing firms for a five-year period (1986-90).

A significant and positive correlation between involvement and diversity was found. There was no significant difference between the influence of involvement or diversity on profit performance. Diversity had a negative relationship to profit performance in low involvement firms and a positive relationship to profit performance in highly involved firms. It appears that larger, more internationally involved firms are better prepared to handle higher levels of diversity in their international operating environments. When operations in diverse international environments are attempted by firms with low international involvement, profit performance appears to suffer. When operations in more diverse international environments are attempted by firms with higher levels of international involvement, profit performance is likely to improve. Strategists should measure and evaluate both involvement and diversity to gain a fuller picture of a firm's level of international diversification.

Indexing (details)


Subject
Management;
Marketing
Classification
0454: Management
0338: Marketing
Identifier / keyword
Social sciences
Title
International diversification measurement: The consideration of international involvement and diversity in global strategic planning
Author
Quinton, Alfred Peter
Number of pages
137
Publication year
1993
Degree date
1993
School code
0483
Source
DAI-A 54/06, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Advisor
Keegan, Warren J.
University/institution
Pace University
University location
United States -- New York
Degree
D.P.S.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
9327556
ProQuest document ID
304099523
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/304099523
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