The relationship between level of diversifications and the performance of selected companies in Bursa Malaysia / Nurul Hazwani Mustafar

Mustafar, Nurul Hazwani (2017) The relationship between level of diversifications and the performance of selected companies in Bursa Malaysia / Nurul Hazwani Mustafar. [Student Project]

Abstract

Diversification is a common strategic planning that most managers will do in order to expand their business and enhance their firms performance but how related it is to the firms' performance is still questionable to this day (T. Ravichandran, Yu Liu, Shu Han & Iftekhar Hasan (2009)). Studies done before stated that there is a positive relationship between diversification and firm performance (Bettis, A. R. & Hall, W K, (1982), Olu Ojo (2009), Mansi, S A & Reeb D M (2002)) but there are studies that resulted in opposite view which is there is negative relationship between these two variables (Lang, L HP. & Stulz, R M1994), Serveas (1996), Lins and Serveas (1999). However, the studies were mostly done in the developed country but only a few were done in developing countries or to be specific in the view of Malaysia. Thus, in this paper, researcher tries to examine the level of diversification based on selected companies chose from various sectors in Bursa Malaysia and to study its impact towards the firms performance. The level of diversification is determined by using the famous Specialization Ratios (SR) which later will classify them into three different classes whereas Return on Asset (ROA), Return on Equity (ROE) and Return on Investment (RO will be used as a proxy to measure the firms performance. The paper concludes that there is a positive relationship between levels of diversification and a firms' performance. In terms of return undiversified firms may perform better than others but in terms of riskiness highly diversified firms may have better chance in reducing it.

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Item Type: Student Project
Creators:
Creators
Email / ID Num.
Mustafar, Nurul Hazwani
2015144609
Contributors:
Contribution
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Email / ID Num.
Thesis advisor
Hj Mohd Shafi, Dr. Roslina
UNSPECIFIED
Subjects: H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Planning. Business planning. Strategic planning > Malaysia
H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Industrial productivity
H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Organizational effectiveness. Performance measurement
H Social Sciences > HG Finance > Investment, capital formation, speculation > Stock exchanges. Insider trading in securities > Malaysia > Kuala Lumpur. KLSE
Divisions: Universiti Teknologi MARA, Johor > Segamat Campus > Faculty of Business and Management
Programme: Bachelor of Business Administration (Hons) Investment Management
Keywords: Diversification, Strategic planning, Bursa Malaysia, UiTM Cawangan Johor Segamat
Date: 2017
URI: https://ir.uitm.edu.my/id/eprint/53107
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