Study On Relationship Between Diversification Strategy And Corporate Performance Under Corporate Governance Perspective

With the reform deepening, corporations, as the cells of micro market economic,determine the depth and breadth of reform by the rapid growth and high-leveledbusiness performance. The modern enterprise system shows an important impact onChineses enterprises. This study adopts the framework of corporate governance—diversification strategy to the mechanism of corporate governance on corporateperformance, and pursued further diversification strategy’s middle influence oncorporate governance and corporate management performance.The research analyzed company governance, diversified strategy and enterpriseoperating performance briefly at first, and discussed the other theories about theirrelationships; then, the research introduced the development stage, governancefeatures, diversified strategy and enterprise operating performance; moreover,research defined the concept of company governance, diversified strategy andenterprise operating performance. Next the article made related hypothesis throughtheory analysis. In the end, research made in-depth analysis on the hypothesis, usingmulti-vector analysis method to discuss validation of corporate governance oncorporate performance, diversification strategies to impact business performance, andthe diversification strategy in the mediating role of corporate governance-corporatebusiness performance.The outcome of the research shows:(1) Chances are that the enterprise’sbusiness performance shows no significant impact on business performance of numberof independent directors, the size of the Board, the Board structure, top executivecompensation and shareholding, and stakeholder corporate governance variablessignificantly affect an enterprise’s business performance.(2) In addition to thepositive correlation between interest-related people’s governance and thediversification strategy, ownership concentration, the proportion of tradable shares,the proportion of independent directors, the Board functions of the body, theproportion of managerial ownership and executive compensation have shown anegative correlation with diversification strategy relationships.(3) Using data fromtheboard market, research discussed the relationship between diversified strategiesand operating performance of enterprise, and the results indicates that, diversifiedstrategy and operating performance ofenterprise are significantly related.(4) Research on the intermediation of diversified strategy in different companies shows that theintermediation of diversified strategy on circulation unit proportion and enterpriseoperating performance, executive’s holdings proportion and enterprise operatingperformance do exist.