Corporate Governance and Corporate Diversification Strategies
In this paper we wish to analyze the causality relationship between corporate governance and the corporate diversification strategies in the context of the global economic crisis. For the beginning, we have studied several opinions of famous specialists of the area. The analysis that we have elabora...
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| Format: | Article |
| Language: | English |
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Editura ASE
2012-10-01
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| Series: | Revista de Management Comparat International |
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| Online Access: | https://www.rmci.ase.ro/no13vol4/11.pdf |
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| _version_ | 1850168378470170624 |
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| author | Raluca Florentina CREŢU |
| author_facet | Raluca Florentina CREŢU |
| author_sort | Raluca Florentina CREŢU |
| collection | DOAJ |
| description | In this paper we wish to analyze the causality relationship between corporate governance and the corporate diversification strategies in the context of the global economic crisis. For the beginning, we have studied several opinions of famous specialists of the area. The analysis that we have elaborated continued with the pointing out of some theories laying at the foundation of the corporate governance. Corporate governance is based on the theory of the organization and the expenses it implies, but also on the attempts to clarify the relationship between the several actors to the determination of management and corporations’ operation. The main component of the study concentrated on the causality relationship corporate governance – corporate diversification. We have first analyzed the most well known reasons to approach diversification: economies of scale and range (synergies); the power on the market; stability of the profit; improvement of the financial performance; growth of the company’s size. Starting from these analyses, we have identified the relationship between the company’s value and the structures of the corporate governance in the context of diversification. In consequence, a number of advantages obtained by the manager as a result of the diversification prevent him from adopting a concentrated position for the company. The one suffering from these actions is the company itself, which is submitted to a value reduction because of the inefficient policies based on agency conflicts on the level of the division or following the lack of managerial experience in multiple domains. |
| format | Article |
| id | doaj-art-6c8e165057a04cdfa8f60cb1df70a48c |
| institution | OA Journals |
| issn | 1582-3458 2601-0968 |
| language | English |
| publishDate | 2012-10-01 |
| publisher | Editura ASE |
| record_format | Article |
| series | Revista de Management Comparat International |
| spelling | doaj-art-6c8e165057a04cdfa8f60cb1df70a48c2025-08-20T02:20:58ZengEditura ASERevista de Management Comparat International1582-34582601-09682012-10-01134621633Corporate Governance and Corporate Diversification Strategies Raluca Florentina CREŢU0The Bucharest University of Economic Studies, Romania,In this paper we wish to analyze the causality relationship between corporate governance and the corporate diversification strategies in the context of the global economic crisis. For the beginning, we have studied several opinions of famous specialists of the area. The analysis that we have elaborated continued with the pointing out of some theories laying at the foundation of the corporate governance. Corporate governance is based on the theory of the organization and the expenses it implies, but also on the attempts to clarify the relationship between the several actors to the determination of management and corporations’ operation. The main component of the study concentrated on the causality relationship corporate governance – corporate diversification. We have first analyzed the most well known reasons to approach diversification: economies of scale and range (synergies); the power on the market; stability of the profit; improvement of the financial performance; growth of the company’s size. Starting from these analyses, we have identified the relationship between the company’s value and the structures of the corporate governance in the context of diversification. In consequence, a number of advantages obtained by the manager as a result of the diversification prevent him from adopting a concentrated position for the company. The one suffering from these actions is the company itself, which is submitted to a value reduction because of the inefficient policies based on agency conflicts on the level of the division or following the lack of managerial experience in multiple domains. https://www.rmci.ase.ro/no13vol4/11.pdfanalysiscorporate governancediversificationcompany valuestrategy |
| spellingShingle | Raluca Florentina CREŢU Corporate Governance and Corporate Diversification Strategies Revista de Management Comparat International analysis corporate governance diversification company value strategy |
| title | Corporate Governance and Corporate Diversification Strategies |
| title_full | Corporate Governance and Corporate Diversification Strategies |
| title_fullStr | Corporate Governance and Corporate Diversification Strategies |
| title_full_unstemmed | Corporate Governance and Corporate Diversification Strategies |
| title_short | Corporate Governance and Corporate Diversification Strategies |
| title_sort | corporate governance and corporate diversification strategies |
| topic | analysis corporate governance diversification company value strategy |
| url | https://www.rmci.ase.ro/no13vol4/11.pdf |
| work_keys_str_mv | AT ralucaflorentinacretu corporategovernanceandcorporatediversificationstrategies |