Corporate Diversification And Corporate Performance Relationship

Technological competence is the cornerstone of firms to gain sustainable competitive advantage, which drives the firms to implement effective product innovation and increase market competitiveness. Today, with the rapid development of technology and intense global market competition, the existing environments have been great changed for Chinese firms. It is an austere challenge for Chinese firms with the increasingly intense market competition. Therefore how to improve the technological competence has strategic significance for firms especially for Chinese firms. This dissertation is carried through around this important problem.With the value of technological innovation is increasingly apparent in today's economic development process, the strategy based on technology development and acquisition is gaining more and more attention in firms. From the mid-1980s on, a new firm phenomenon—Corporate Technological Diversification (CTD)—has been paid attention by more and more European, American and Japanese scholars. These researchers point out, because products are increasingly complex and systematic firms should possess technological resources with reasonable volume and distribution, technological diversification is the strategic response for firms to cope with the increasing uncertainty of the competitive environment and complex product system, and could effectively promote firms to gain the sustainable competitive advantage. However, the existing literatures mainly focus on firms in developed countries, whether these findings are suitable for firms in the developing countries especially in Chinese need further investigation. Moreover, almost all of scholars have not studied the mechanism of corporate technological diversification impacts corporate performance, and there lacks related research on how to promote corporate's technological diversification strategy. From the perspective of innovation management, it is essential to establish theoretic system and management mode about corporate technological diversification in order to improve innovation theory and provide good directions to practice.Based on these backgrounds and research objectives, the dissertation tries to settle the following problems:(1)The impact of corporate technological diversification on corporate performance, as well as the moderating effects of other factors on the relationship between corporate technological diversification and its performance; (2) The key mechanism of corporate technological diversification to facilitate its performance including innovation performance and operational performance; (3) How firms to promote technological diversification strategies, which is the research on possible ways the technological diversification strategy's promotion.In order to solve these above problems, based on the review of theories such as corporate technological diversification, product innovation strategy, complementary assets, corporate competence and other related theories, in the first the dissertation makes a spot field investigation about some firms which located in Zhejiang, Jiangsu and Guangdong, therefore makes an exploratory case study about four Chinese firms. After case selection, data collection and analysis, the dissertation proposes the initial idea of theoretical expansion. Then, the dissertation studies in theory the above three problems, puts forward conceptual models and related assumptions. Furthermore, the dissertation makes a big-sample questionnaire investigation for data collection. After that, the dissertation uses mathematic statistic methods and SEM model to do empirical research. The main contents and results of the dissertation are list as follows:(1) Based on related research on corporate technological diversification, the dissertation analyses the relationship between corporate technological diversification and its performance. Then, by introducing the complementary assets and the volatility of the environmental dynamism as internal and external moderating variables respectively, the dissertation adopts the contingency ideas and studies these two factors whether and how impact the relationship between corporate technological diversification and corporate performance. The empirical results suggest that technological diversification of firm is very important both for its technological innovation activities as well as its production and business activities; technological diversification could effectively promote the improvement of corporate performance. The empirical results suggest that on different internal and external condition the impact of technological diversification on corporate performance have different forms. The research develops the related theoretic system and makes it clear of the relationship between corporate technological diversification and its performance.(2) Based on explorative case studies and literature review, the dissertation analyses the impact of corporate technological diversification on its product innovation strategy. The empirical results suggest that technological diversification has significant positive impact both on platform-based series products strategy and technology-related product diversification strategy. The expansion of firm's technology base scope could help firm continuously enhance competitive advantage in existing product area on the one hand, and help firm develop in new product area on the other hand. Both the success of firm's product specialization strategy and product diversification strategy should be based on the diversified accumulation of its technological capabilities.(3) Based on the above research results, the dissertation, conducts the further study on the mediating effects of product innovation strategy on the impact of corporate technological diversification on its performance, in order to analyze the mechanism of the relationship between corporate technological diversification and its performance. The empirical results suggest that platform-based series products strategy and technology-related product diversification strategy have completely mediating effects on the impact of corporate technological diversification on its business performance, but the two product innovation strategies only have partly mediating effects on the impact of corporate technological diversification to its business performance. Comprehensive speaking, the positive impact of technological diversification on its performance is realized through product innovation strategy. Product innovation strategy is the internal mechanism of technological diversification promoting corporate performance. The research expands the scope of existing studies.(4) Based on the theory of technology strategy and open innovation mode, the dissertation conducts a preliminary research on how firm to implement the technological diversification strategy. The empirical results suggest that the formation and evolution of technological diversification is a long and complex process, which would be influenced by many factors including organizational learning, innovative culture, internal resources supporting, external technological sources of enterprise and external technological sources of profession, etc.. In order to expand effectively the scope of knowledge and capabilities firms should rely on open innovation mode. The research adds a further theoretical explain to the above conclusion.In a word, the dissertation enriches and improves the theory of corporate technological diversification put forward by foreign scholars. The analysis perspective based product innovation strategy makes it more systematic and practical for the theoretical research of corporate technological diversification than ever. The dissertation wishes provide new and practical perspective and idea about how Chinese firms to expand their technological capabilities scope, thereby enhance the product advantage and gain sustainable competitiveness.