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How Successful Companies Manage Diverse Businesses

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Submitted By joslan01
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How Successful Companies Manage Diverse Businesses

How victorious business run different industry.

Abstract
Diversity is the result of past diversification or merger. In the global competition and slow growth context of the 1980s, highly diversified companies have to manage diversity in order to benefit from it and to avoid its drawbacks. The benefits are compensation effects and cross-fertilization and the draw-backs are dispersion of resources and internal inconsistencies. To balance integration and differentiation is the key success factor in managing highly diversified companies.
Multiplicity is the result of history expansion or merger. In the global rivalry and slow growth background of the 1980s, extremely branch out corporation boast to direct variety in order to profit from it and to keep away from its weakness. The payback is costs sound effects and cross-fertilization and the draw-backs are spreading of wealth and inside discrepancy. To poise combination and separation is the key triumph feature in running extremely diversified companies.
Diversification
A portfolio strategy designed to reduce exposure to risk by combining a variety of investments, such as stocks, bonds, and real estate, which are unlikely to all move in the same direction. The goal of diversification is to reduce the risk in a portfolio. Volatility is limited by the fact that not all asset classes or industries or individual companies move up and down in value at the same time or at the same rate. Diversification reduces both the upside and downside potential and allows for more consistent performance under a wide range of economic conditions.
Example
Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies they thoroughly know and far too much in others about which they know nothing

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