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| Diversification Strategy and Organizational Performance of Manufacturing Companies in South-East, Nigeria
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Ayozie Emmanuel Achiole, Ijeoma Baby, Kenneth-Ugochukwu, Ujah Chidinma, Ononogbo Martins Chibuzor & Uzoma, Chukwuemeka Henry
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Abstract:
This study examined the diversification strategy and organizational performance of manufacturing companies in South-East, Nigeria. The study adopted the descriptive research design. The population of this study is 594 line managers, supervisors, and staff managers of the 5 manufacturing companies operating within the South-East region of Nigeria. A sample size of 239 was determined using the Slovin's formula. The Cronbach Alpha statistic was used to obtain index coefficient values of 0.817 and 0.715 for dependent variable and independent variables respectively as the instrument reliability ratio. The data set was first subjected to normality test for the residual term using the Jarque-Bera Statistic, but the result revealed that the normality assumption was fulfilled for the two independent variables; hence the introduction of parametric regression analysis technique was appropriately employed. The research questions were answered with Pearson correlation statistic so as to establish the relationship between the dependent and independent variables in the study. The hypotheses were tested with regression analysis technique so as to measure the "significance" of the degree of relationships existing between the dependent and independent variables. The analysis was enabled by the use of E-views software package. The study concluded that horizontal diversification and concentric diversification have significant and high positive impact on organizational performance of manufacturing companies in South-East Nigeria. Hence, horizontal and concentric diversification enhanced organizational performance of manufacturing companies in South-East Nigeria. The study recommended among others that it is advised that manufacturing companies diversify their product lines to better meet customer demands, as well as to achieve profitability and expansion as well as increase performance, since diversified organizations have been found to perform better than the undiversified entities.
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