DIVERSIFICATION STRATEGY AND RISK REDUCTION

Sulastri, Sulastri and Adam, Mohamad and Isnurhadi, Isnurhadi and Muthia, Fida (2016) DIVERSIFICATION STRATEGY AND RISK REDUCTION. IJABER, 14 (13). pp. 8931-8952.

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    Abstract

    The choice of diversification strategy is an important issue in strategic management to reduce risks of business portfolio. Many research have distinct the construct of dominant business, related and unrelated business diversification strategy with its relation to the exploitation of asset synergy that gives impact to diversification performance. However, research that investigates the strategy effect on risks as the essence of diversification is still scarce. This study focuses on the diversification strategy impact on risks that are classified into: market risks, business risks and financial risks, as they are believed to have different characteristics. It is found that (a) in market risk, there is not significant difference between all diversification categories; (b) in term of business risk, significant difference only found between dominant business and unrelated business; (c) in the case of financial risk, there is a significant difference in the risk for each diversification category. This study gives implication on the importance of differentiating risk type (market, business and financial risks) on each diversification strategy (dominant, related and unrelated business) as it has different impact on the creation of value. Key words: Market Risk, Financial Risk, Business Risk, Dominant, Related dan Unrelated Diversification

    Item Type: Article
    Subjects: H Social Sciences > HG Finance
    Divisions: Faculty of Economics > Department of Management
    Depositing User: Mohamad Adam
    Date Deposited: 07 Apr 2017 11:49
    Last Modified: 07 Apr 2017 11:49
    URI: http://eprints.unsri.ac.id/id/eprint/7176

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