The Existence or Lack of a Relationship between Diversification and the Performance of a Firm - Essay Example

Negative correlation will mean that the assets have no relationship in terms of performance and this will mean that the performance of individual assets will be independent of the other assets in the same portfolio.... diversification and why is it important to portfolio risk Diversification in terms of portfolio means minimizing the risk factor by investing in various assets (see Hagin, 2004).... Looking at the above definitions of covariance and correlation we can clearly see the relationship between the two in the context that correlation will determine the extent to which two variables are connected to each other while covariance will look at the same two variables and asses how they move together....

The ultimate goal of any innovative action is to increase the performance of the firm as well as bring sustainable advantage to the firm.... iterature on innovation has claimed that innovation can be considered as one of the crucial successes for the survival and growth of any firm.... At an organizational level, innovation represents the propensity and receptivity of the firm to establish and create new ideas leading to development as well as the launch of new services and products....

He argues that the existence of the firm is fundamentally to achieve coordination in an effective manner than the market in order to enjoy productivity gains.... handler's concept of the visible hand premises the origin of the firm and its growth prospects.... First, a managerially controlled firm is a non-maximizer, and thus high-profit rates are not as objective and thus cannot be used to measure competitive advantage.... Second, the firm though being an efficient cost minimizer, the benefits are not observable since they are being absorbed by high executive salaries and managerial perquisites....

During this process, a firm has to acquire new competencies, skills, and techniques both for the new market and the also for the new product.... Therefore, diversification can also be defined as the process by which a firm enters into a new market, without essentially leaving its obtainable products, such that it produces a new product or products.... Diversification entails three dimensions: the product, the market, and the technology of the firm....

According to the article, the improved performance of the business entities emanates from the shift in regulations and economic reforms that date back to early 1990s.... The change from traditional diversification of operations within the borders of a country substituted with the vertical growth that extends to other parts of the world.... The primary weakness of the article lies in its indication that vertical growth is effective and efficient compared to internal diversification....

This research will begin with the statement that survival of companies remains largely reliant on its ability to react to market forces immediately or have the resources, reach and net to capture markets that were not primarily considered at the onset of its existence.... The study would aim at answering these research questions: What can an organization change to stay competitive when faced with stiff competition and unpredictable market demand?...

A biracial relationship will be any kind of association existing between some two people or even more, and in which the association is based on things like love, liking or even luminance (Hinde 16).... At times, biracial relationships might spring about from regular business practices and interactions, and sometimes from some social commitments between individuals.... In order for man to have a healthy relationship, there should be a number of things that have to be always right, otherwise, the relationship will come to an end or become unhealthy....

17) employee turnover affects the management of organizations and determines the output of a firm.... Hence, proper relationships between the top level and lower levels of management have been known to increase the gross product of a firm and provide networking even with the external environment.... These conflicts lead to poor performance and low output per employee and an eventual collapse of a firm (Behn, 1998, p.... Additionally, the competitive advantage of the firm is reduced and the chances of success of such a firm are few due to lack of motivation to work (Northose, 2012, p....