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Chapter 6
6
Corporate-Level Strategy
Michael
Michael A.
A. Hitt
Hitt
R.
R. Duane
Duane Ireland
Ireland
Robert
Robert E.
E. Hoskisson
Hoskisson
Managerial
Motives
Ch6
Motives, Incentives, and Resources
for Diversification
Ch6
Motives, Incentives, and Resources
for Diversification
Resources
Incentives
Managerial Motives
Causing Value Reduction
Managerial Diversifying Managerial
Motives Employment Risk
Increasing Managerial
Compensation
Ch6
Alternative Diversification Strategies
Sharing Activities
Transferring Core Competencies
Ch6-
Alternative Diversification Strategies
Sharing Activities
Transferring Core Competencies
Ch6-
Alternative Diversification Strategies
Transferring Core Competencies
Assumptions:
Transferring Core Competencies leads to competitive
advantage only if the similarities among business units
meet the following conditions:
Sharing Activities
Transferring Core Competencies
Ch6-
Alternative Diversification Strategies
Sharing Activities
Transferring Core Competencies
Ch6-
Value-creating Strategies of Diversification
Operational and Corporate Relatedness
Related Constrained Both Operational and
High Diversification Corporate Relatedness
(Rare Capability and
Sharing: Vertical Integration Can Create Diseconomies
Operational (Market Power) of Scope)
Relatedness
Between
Business
Unrelated Related Linked
Diversification Diversification
Low (Financial Economies) (Economies of Scope)
Low High
Corporate Relatedness: Transferring Skills Into
Business Through Corporate Headquarters Ch6-
Performance Diversification and Firm Performance
Managerial
Motives
Internal Strategy
Governance Implementation
Ch6-