The degree of collaboration between business units in diversified corporation: A strategic perspective

Abstract

AbstractThe Company's CEOs are always obsessed with diversification since the early 1960s and this belief is continuing to date. Diversified corporations run multiple businesses to generate various opportunities to gain competitive advantages and differentiate themselves in the market. This study considered the business strategy of business units (BUs) for diversified corporations. Based on the dominating strategy pursued by BUs, this study tried to investigate the level of collaboration between the BUs when these BUs have a similar strategy or different strategy. Thus, this article aims to examine the level of collaboration or coordination between BUs in Indian diversified companies. A survey was carried out with 107 companies for examination and these companies were chosen to be of different sizes and sectors. The findings represent that the level of collaboration is high when the BUs have a similar kind of business strategy while the level of collaboration is low when they have different kinds of business strategies. These findings are useful for the current organizations to seek collaboration between BUs in the diversified corporation.