Effect Of Diversification on Organizational Performance of Selected Manufacturing Industries in South West Nigeria

Abstract

The need for the adoption of diversification strategy became germane because of challenges which impede organizational performance. This study thus examined the effect of diversification on organizational performance of selected manufacturing industries so in south west Nigeria. Some studies of strategic study have investigated on the effect of diversification on organizational performance in manufacturing industries in Nigeria but have come up with inconclusive findings which create a gap that this study wants to fill. The specific objectives of the study are to examine the effect of related diversification on organizational performance and investigate the effect of unrelated diversification on organizational performance in manufacturing industry. Ex-post facto research design was used for the study. The population consists of employees of 22 manufacturing industries listed in Nigerian Exchange Group between 2011-2020 dealing in Food and Beverages, Breweries, Health care/Pharmaceutical and Conglomerates. The sample size comprises eight manufacturing industries with 750 employee’s selected using stratified sampling technique and selected according to 50% proportion of original sample size. Data were drawn from primary and secondary sources. Descriptive statistics was used to explain the respondent’s characteristics and inferential statistics was used to analyze data collected. Findings revealed that related diversification have significant effect on organizational performance F (4, 745) = 11.988, p < 0.01, R= 0.651, R2 = 0.424, and adjusted R2 = 0.419). Unrelated diversification however have significant but negative effect on organizational performance F (4, 745) = 11.982, p < 0.05, R = -0.466, R2 = 0.217, and adjusted R2 = 0.208). The study concluded that related diversification increase organizational performance while unrelated diversif