Advance and Retreat

Julia Hautz, Michael Mayer and Christian Stadler

International Studies of Management & Organization, 2015, vol. 45, issue 4, 319-341

Abstract: Theory predicts that economic and institutional changes increase competitive pressure and lead to the retreat of unrelated diversified firms, while, at the same time, allow more economically efficient related forms of diversification to persist. This study investigates the long-term waves of diversification in France, Germany, and the United Kingdom between the 1950s and 2003. It documents a rise in diversification until the mid-1990s and a retreating wave since the inception of the single European Market. These waves reflect both an early shift to related diversification and nationally variable trends of unrelated diversification. We examine the fate of the unrelated diversified firms in more detail to establish what caused some to refocus and others to resist the wider trend. In particular, we explore if and how different kinds of ownership facilitated the strategic choices to maintain existing unrelated strategies. We examine these choices in detail by considering representative and illustrative company case examples.

Date: 2015
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DOI: 10.1080/00208825.2015.1006037

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