 Turning Digital: Diversification in UK Design Consultancy ServicesKarl Wennberg (karl.wennberg@hhs.se), Bruce Tether (bruce.tether@mbs.ac.uk), C. Li and Andrea Mina Working Papers from Centre for Business Research, University of Cambridge Abstract: Why do small firms in emerging industries choose to diversify? Theories of strategic management suggest that diversification is driven by search for exogenous market opportunities, deployment of slack resources, or the exploitation of current knowledge. Institutional organization theory suggests that firms may diversify for reasons unrelated to performance, such as by mimicking similar firms. We analyse the diversification of small UK design consultancies into the field of digital design between 1996 and 2009, a period characterized by the dot-com 'boom', 'bust' and recovery. Panel data analyses reveal that financial performance had little causal impact upon diversification. Instead, most firms diversified into digital design triggered by internal growth aspirations or by the following of similar firms. We contribute to the literature on small firm growth and diversification by highlighting the interactive nature of strategic and institutional drivers to diversification, and their relationship with firms' internal growth aspirations. Keywords: Diversification; Business Services; SMEs; Market Entry (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp413 Access Statistics for this paper More papers in Working Papers from Centre for Business Research, University of Cambridge |
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