Corporate diversification and organizational structure: a resource-based view
We argue that the strategy of related diversification will enhance performance only when it allows a business to obtain preferential access to "strategic assets" - those that are valuable, rare, imperfectly tradable and costly to imitate. Even then, the advantage afforded by this access will eventually decay as a result of asset erosion and imitation by single-business rivals. In the long-run, therefore, only accumulated competences that enable the firm to build new strategic assets more quickly and efficiently than competitors will allow the firm to sustain supernormal profits. Both these short- and long-run advantages are conditional, however, on the diversified firm putting organizational structures in place that allow it to share its existing strategic assets and transfer the competence to build new ones between divisions in an efficient manner
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